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SkiStar AB (publ)
3/19/2025
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,
And obviously, as we've had a solid performance in the operating profit, we have had a strong cash flow from operating activities during the second quarter that amounted to 1.4 billion SEKs. And that was an improvement in comparison with last year. And if we take a look at the first half year, the cash flow from operating activities amounted to just a little more than 1.7 which was also an improvement in comparison with last year and during the quarter capex was very low it amounted to 72 million and accumulated the capex amounted to 209. We made a decision early January to invest in a gondola in Trisil and that is a quite important investment, but also quite expensive. And the investment is expected to be around 200 million NOC, Norwegian crowns. And we estimate the capex for the total year to amount to approximately 550. And that capex also include approximately 50 million that is related to acquisition. So in total, it will be 500 to 550 for the year. And then the debt structure, we had now the ratio, the net debt situation in comparison with EBITDA is fairly low. It's 0.6. And that is, of course, impacted by operating cash flow that has been strong and we have also been able to reduce our net debt and interest being debt amounts to 704 which is uh significantly lower in comparison with last year but we need to understand that due to seasonality etc and that we will add more investments or more capital capex moving forward uh the the net debt or the capital structure will increase and it will not continue to be 0.6 but it's a fairly stable or solid number now and if we continue to the summary slide and as I mentioned we have had a positive calendar effect during Christmas a new year that has contributed to a high customer demand. All-time high, nine out of 15 days during Christmas holiday and solid and very high occupancy rates. The warmer weather has had an impact on higher costs for preparation of snow and staffing. The organic growth was strong, underlying 9% for the first half year and if we exclude capital gains. But we have improved the operating margin quite high even with and without capital gains. And strong operating cash flow driven by increased net sales. And the equity to asset ratio was also high 60% when we exclude the effects from IFRS 16. and low financial net debt due to lower investments but also and most importantly strong cash flow.
Thank you Sara and I think it's important for all of us to just highlight the importance of sustainability and We are continuing our strong focus within the field of sustainability and we have now improved our suppliers and securing that now 25% of our supplies has a climate target and we will continue that journey. I think it's also important to continue our development within SkiStars operation of how to become CO2 and negative, and the area of improvement is continuing. And I'm really proud of our investment we have made in electrical vehicles, electrical groomers, and also battery charging, et cetera, all the way to fulfill our idea of this, say, map of illustrating our impact on the total society within our Ski Star destination. Something also very promising is that we are not alone in this. We are now joining forces within the Global Sustainability Ski Alliance. Together with other ski operators like Compagnie des Alpes in France or Kitzbühel in Austria, etc. We are joining forces to put in a strong sustainability agenda among other ski resorts. to really support the development of how to become even more sustainable together and also put more larger projects in place to also challenge our suppliers within the supply chain. And just as a reminder, we're really happy to continue to work as a neighbor together for the white winters. And this conference in oil was a great start for that two weeks ago. So now, my friends, I will give you a little bit of flavor of our outlook and just a reminder of our strategic initiatives. And those are the ones we are following. So if we then look at the outlook or take a look at the outlook, I'm really proud to continue our 50 years anniversary. It is actually 50 years ago, Erik and Mats, took the car to Sälen, and instead of buying one cabin, they went back with one slope and 37 cabins. And that was the starting point of Skillstar. And the official date for celebrating that is in October. That means that we have used this part of the year, 2025, to celebrate, and we will continue to celebrate even more during the start of next season, so to say, winter season. And just to give you a little bit flavor of how does the rest of the winter season look like? How will our calendar look like? We are struggling a little bit with take up the fight with the warm weather like I have outside today here in Stockholm where we have plus 12 degrees and people start to look like the opening for summer houses. They would like to go play golf. And they would like to do gardening and all that compete, of course, with the skiing. And if I just look into our ski resorts, they are in a very good, they're very well prepared for the Easter, actually. We came home late night yesterday from Trysil, which there was super nice condition. A lot of snow in the slopes. Sun was shining. And that's why we really would like to see how we could continue to push the Easter. But week 16 is the Easter period this year. It's the latest period we have Easter. And we are struggling to fill up week 14 and 15, for example. 16 is quite full and good, but 14 and 15 is a challenge for us. And that's why we are a little bit behind the bookings versus last year. What's really positive then if we take a look beyond this winter is that we have went out with the investment in a new gondola in Trysil and that will be ready for next winter season. Exactly like Sara mentioned, the price for that is high, but it will also give a very fairly and good customer experience. Åre, it's an area where we have struggled sometimes with the weather and also demanding situations with our share lifts to open them up because they are very weather sensitive. With this new ski lift in Jätvalsliften in Åre Björnen slash Sarden will be a tremendous lift for that whole area actually because that means that We all days can operate this area to take you into the large ski system into Åre. And we will also spice that up even with more investment in lighting facilities, which will increase the opening times. Today, during the darker period of the year, we open up the ski lifts 9.30, we close them 4 o'clock. Now, we can open them up 8 o'clock in the morning and have them open the full day to 5.30, 6 o'clock. And that's, of course, a big improvement for all the guests living in that area. And that could also support... rent out for cabins in that area which normally is not the easiest during that time of year. Lastly but not least a completely new area in Vemdalen and Hovdesid which will be launched next year and we are so glad because this has taken four years for us to work with the authorities and to get this approval. We got everything in place a couple of months ago and now we are so glad to be able to open this area up for the next winter season. So that means that we are really open up for some good news and of course we continue also to invest in snow making systems to secure the white winters. But then if I look into the construction project, we also have decided to do the 500 new warm beds, we are calling them. That means that is 500 new beds in Säland, which has been an area where we have had lacking of beds. Now we open up that, so that will be very good for us. However, we see... We have guided you with the capital gains to be in the range of 75 to 100 million SEK per year. But now we see that we have some delay in this plan from the municipalities and also that there is a little bit slower in the market. So we will, for this year, we have, what to say, a timing effect. will mean that we will not reach those 75 this year we will be below that just so we are guiding you correctly in that in that sense retail and we continue with the retail development and we have had some competitions in in Trusill and since there was a generation shift in Jules sport show We have decided to make an acquisition of that so that means that we are really strengthening our presence in Trysil within the retail segment as well. Really glad to also again highlight our taking over the operations from Högfjällshotellet in Sälen. We will do that from May. Tony Buckner has been running this hotel for 35 years. And it's big shoes to fill after Tommy's great performance over this period of time. But we will do our best to continue. And also by having all those international guests coming in to us, we also see that this is an excellent place to also do some extra booking and opportunities for the international guests providing Högfjellshotellet actually. And that will lead us up to next winter bookings. We are up 5% for next winter season. And that's, of course, something super exciting to present to you. And that means that 15% of the next winter season is already locked in, more or less, already at this time of the year. Just to give you a flavor of what we are doing within the development of our destination. So the treasel gondola in the up left. In the middle, we open up this. This is a picture from Sälen and a fantastic part of Timmerbyn where we now see some trees in the lower part of this picture where we will open up for a new BRF project. The right corner with a map with a red dotted line showing the new area Hovdesyd which will be the new ski area in Vemdalen opening up in December next winter. Down to the left, we have Trisyl Suites where we open up for sale of apartment and 60% of the BRFs are already sold actually. And it's just 100 meters above the new gondola entrance. So of course it's a great location, ski in, ski out. And then the last two pictures down to the right is showing Söderås and where we have got now permission to start construction if you would like to but still we have not decided how we would like to develop those areas but of course we have great plans as you see on the pictures for that area as well so the development of our destinations continues just as I think it's important to show you about this with the how does it looks like week by week in the bookings in our system so to say So here you can see the challenges. We have week 13, 14 and 15, especially week 15, the week before Easter. And that's why we are down 5%. But if you look into the week 16 compared to last year's spring season, Easter week, we are in the same range, you can say. But it is the week before really take us down. And that is, of course, challenging since we are... sitting with the cost for running our ski lifts, etc. And we really are in the need of filling the beds. But we will do our best to continue to fill our beds as well. Actually, we have a lot of private beds, of course, like we had during Christmas, who will be filled during the Easter. That's normally how it will look like. And just as a picture, we are extremely proud, of course, to have this unmatchable position within Scandinavia running the five largest ski destinations and this by focusing on a year-round operation