SkiStar AB

Good day and thank you for standing by. Welcome to the SkiStar Interim Report Q3 1st September 2025 to 31st May 2026 conference call. At this time, all participants are in a listen-only mode. After the speaker's presentation, there will be a question and answer session. To ask a question during the session, you will need to press star 1, 1 on your telephone, You will then hear an automated message advising your hand is raised. To withdraw your question, please press star 1, 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 Joostrand, CEO, and Sara Ugazbab, CFO. Please go ahead.

Thank you for that introduction and a warm welcome everyone to this quarter presentation for Q3 2025-2026. So the agenda for today is that we will go through a bit of the third quarter performance. We will go through a financial update and then we will guide you through a bit of an outlook and a summary. So let's start with the Q3 performance. And before I just jump into the numbers, I just really would like to highlight again that we are the market leader for the Scandinavian Mountain Holidays. We are running six destinations in Sweden and Norway. We have a market share of 42%, and we are really proud of our integrated business model, where we have the digitalization as a driver and a neighbor. And we are also really proud of our significant land bank for property development, and we will take you through that as well later on. So if we jump into the third quarter, we present net sales with a 5% increase. We have a lower operating profit with 8% decrease. And if we exclude the exploitation gains, we can say we have a par result compared to last year. And our operating margin stays at 24% compared to 25% last year. And as we mentioned in the second quarter report, we had a very challenging booking situation in the end of the season. And that's why we also decided to go for a lot of activities, price campaigns, marketing activities. And unfortunately, that didn't pay off as we expected. So... That's why we also, that costed a bit on the margin since we lowered the prices. And it costed also a bit on the cost side with the marketing efforts. And we could also see that we had a decrease of skier days sold in the period as well. So if I summarize, you can say that we had a good growth in line with our financial goals, but we are not satisfied with the result. But we also have taken some actions going forward to secure that we can have a more stable result development also Q3 going forward. I would also like, since we are summarizing the winter season, I would like also to talk a little bit about the accumulated results. And here we can say that we have a 7% increase on top line. We have a 5% increase on the profit, operating profit. And if we then compare without exploitation gains, we actually increase the result with 8%. we deliver a very stable result here, we must admit. And we increased the ski days with 0.5%. However, we have this hesitant real estate market. And we have said that since we have this hesitant real estate market, we also can see that we have had zero income and profit from real estate market the first nine months. And also, the outlook for the real estate market isn't on top as it was in the good old days. So we are saying that we will most probably land on the same level as we did last year with the real estate gains. However, if I look into the first nine months, we have an increase in all revenue streams. And it is actually still strong demand for mountain vacation. And we can see that we continue to increase the number of international guests. We have put a lot of effort in investments for this year. And we can see that we have an increased level of guest satisfaction. And that helps us to have growth in all revenue streams, actually. And we will continue to invest in this, especially to secure a good customer experience development. So again, the international guests, they are a drive for us to increase the revenues. And they now stand for 40% of the total bed occupancy rate. And the most important with the international guests, I must say, is that they buy these long ski passes, six to eight days, and they do it long time in advance. and they also book more they book the full package so to say and they do it in in long time in advance everything actually and it's also very good that the peak weeks differs also from you can say the the Swedish guests which is of course good that we can filling out more weeks and work with the capacity in another way. And also, they are increasing over time as well. We're really proud that we have improved our guest experience this year. We have invested in better ski experiences. We have done that in wider slopes. We have done that in actually more snow gowns. We have done it in more lifts. We have invested in better accommodation experience and we have taken a large help from AI as well. So when the customer had contacted us, we have really had good help from AI and that has speeded up the answers to our guests, which has been very helpful. And we're also very proud that we have invested in the ski pass price differentiation. that has helped a lot of customers to also choose other destinations and maybe also destinations with more value for money ski passes. And we are really proud to have the lowest ski pass in the mountains actually for our guests. And then also more precise governance around the KPI around the MPS values. We work very hard with that across the whole organization to secure that we continue to improve our guest experiences. I think sometimes we don't talk enough about our integrated business model because skillstore.com is a fantastic engine because we own this distribution channel and we are not dependent on any other distribution channel and i think many others are jealous that we can own this distribution channel because this helps us with the diversity for diversified revenue streams It helped us to have this dynamic pricing model. It helped us to have a lot of different guest interaction and also helped us to collect a lot of customer data, which has enabled us to be much more specific in our tailored sales. And this... Integrated business model also helps us to improve and also expanding our customer offer to define and find new revenue streams. And this is one example and this is taking from our development of our retail business. And we have had a very solid development of the retail business. We have a CAGR of 11% since 1819. And the last couple of years, the development has been really significant strong. And it's specifically with our own brand Equip. With the last quarter grown 30% actually. So really, really strong development of Equip brand. We also have this significant land bank, and the land bank enables us to have an organic growth within our company, because we can both continue to develop ski areas, and we can also continue to strengthen the destination's ecosystem. And by doing that, that would also help us to develop the whole destination in a way where we control the development, more or less. And we can also develop the destinations in areas where we really want to spare the guest flow, so to say, since we have this control of the also key areas. And to have the integrated real estate development model, we can also create value through the property development, and it also drives growth. This year, we opened up new beds in the next fiscal year, sorry, 26-27. We opened up 600 new beds in Sälen, where we have seen a potential to grow with more beds, as an example. And that is helping us to grow with our own beds, and we do it with warm beds, and we do it in the integrated ecosystem, which is, of course, very strong within our business model. And we continue to enhance capacity and guest experience. This year, we had this investment in the gondola and tree field. We had the new ski area in Vemdalen, obviously. We have lighting projects, and we continue to invest to really secure that we're enhancing the guest experience among our ski destinations. So I think we are proud of this, and we continue to be forward leaning in all these actions. And Sarah, I hand over to you to talk a little bit about the financials now.

Thank you, Stefan. If we start with the next stage development, it has been fairly good. And the data show the net sales development last 12 months that amount to 7.3. The Q3, net sales due Q3 was 5% and accommodated Q3 was 7%. And of course, as Eva mentioned, the net sales development during the third quarter has been not slow, but a bit less than expected. And if we continue with explanation on next-stage development, in total, if we exclude effects from currency, the revenue growth was 8% in comparison with last year. And we have had increase in all our revenue streams. So if we start with CPAP, The CPAS effect was 6% in total, where the price and mix effect amounts to 5.5 and the volume was 0.5%. Accommodation was up 6.2%, where price and mix amounts to 4.2 and the volume growth was 0.2%. As you remember, we acquired Toteja, which is Töksjö Hotellet in Spelen, in May last year. And we've had, of course, an increase in revenue that relates to the acquisition. And that is included in accommodation, but also in restaurants. We've had a fairly high increase in restaurants, 36%, but the majority of the growth relates to the acquisition of Töksjö Hotellet. We've had growth in e-rentals, in e-schools, and not the least, sports shops. That was up 13.7%, and it was driven by a strong growth related to Equip, our own brand. If we continue with operating profit, and the operating profit development last 12 months, the margin was 17%, and the amount was 836 million. And during the period September to May, the operating profit was 1.1 billion SDK. That was an increase in comparison with last year that amounts to 5%. If we exclude expectation gain, the increase was 9%. And just to remember, we've had no property transaction during the period. We expect to have a transaction during the fourth quarter that amounts to more or less the same level as last year. And the underlying operation has been solid during the quarter, but we have also had positive impact that relates to one of items. I will explain those later on. So if we take a look on the development per category, and in comparison with last year, no, we haven't had any property transactions during the quarter. The mountain operation has been impacted, positively impacted by e-pass revenue growth, but we've also had increased costs due to higher energy and fuel prices and higher consumption. And we've also had higher costs that relate to maintenance and repair. We try to improve or increase the volume related to both steep path and accommodation. We have spent more marketing during the quarter to improve the bookings. The operating profit has had a positive impact impact that relates to an insurance compensation of 11 million SEK, and that relates to the breach in Vendalen that was demolished. And if we take a look at the ski car shop and rentals, the growth has been strong, both on online space and physical stores. But we've also had a positive impact that relates to an adjusted inventory value of 21 million. The acquisition of TLC Tellus has had a positive impact on the operating profit that relates to hotels. And property management has had an increase in operating profits, but that is related to income to other segments in terms of income, and we have also adjusted or transferred some costs to mountain operations that relate to cleaning and air quality, etc. So in terms of the operating profit development, excluding exploitation gains and currency, was up by 9%. If we move on to cash flow and CapEx, the cash flow from operating activities last 12 months was 1.2 billion, and it has been positively impacted by improved profit. CapEx has been fairly high, and that is related to several significant investments that were made ahead of the winter season. where the gondola in Swinburne stands for the majority of the amount. And the capex during the quarter, the third quarter amounted to 77, which is a decrease in comparison with the third quarter last year. And here today, capex amounts to 427. And net debt to EBITDA structures is very low, 0.9, and it is a fairly high or huge headroom in comparison with our financial target of 2.5. The financial preparedness as of 31st of May amounted to 1.7 billion, which is a high increase in comparison with last year, and that is due to the refinancing that was made in June. And interest-bearing liabilities, both included and excluded IFRS 16, have decreased during the quarter. And the financial KPI, if we start with return on capital employed, has improved and amounts to 11.3%. Equity to asset ratio has also improved. and was 52. If we exclude IFRS 16, the equity to asset ratio was 67, and last year, the number was 64. So in summary, the financial target, so if we start with revenue growth, it has been a fairly high or satisfactory revenue growth, and that amounts to 7.3. last 12 months. The operating margin stands at more or less the same level as the last financial year. This amounts to 17. But we expect the margin to improve going forward. And it will be driven by revenue growth and operational efficiency. And I will come back to that. The next step to Ebitda was 0.9 and, as I said, a quite high schedule in comparison with our financial target. If we talk about the operating margin, we do expect the margin to improve going forward. And it's a combination of additional efforts to further improve our guest experience, but not the least initiatives that have already started that will improve our ability to use or our resources better going on. And it's related to staff scheduling, combined duties, initiatives that relate to investment and purchasing processes, economies of scale, et cetera, et cetera. And that and those together will improve our margins in the future.

Thank you, Sarah. And I will now try to guide you through a little bit of the outlook. And I will start with the summer period where we have the next or upcoming months in front of us. So here we are. We have been working now for a couple of years to develop the year-round offer, and now we are trying to... I mean, we have been working with winter for more than 50 years, and this is the fifth summer season where we work with this. year round offer. And we try to take small steps all the time. And this year we have been very successful to launch these family passes and also bundle different type of activities where we include different type of packages. And we also have a soccer tournament in Sälen for the first time. So we will see that the bookings are up 3%, which is, of course, very good. But we can also see that the pre-sale of different type of packages has been very successful. So we are gladly looking forward to the summer. And what's happening at our destinations during the summer is that all investments for the next or upcoming winter season happens right now. So here we have earlier sent out the message that we will invest heavily in snow production. And that means that we will offer the most... snow guarantee and we will do that by investing in the snow production and that will be by increased water capacity we will have close to 500 new snow guns we will have a new ski lift in Åre and also we will continue to invest this with artificial light to prolong opening hours as well that we will prolong and make a much better guest experience I'm really glad that we have decided to take a larger grip also on our largest destination, Sälen, where we will continuously talk about even more new events happening and concepts in Sälen going forward. If I then look into the winter season... as we have mentioned in our quarter report, there is a strong demand for the winter holidays and it's also prioritized among families. We can clearly see that and we're also very glad to see that the bookings are up 3%. We were a little bit surprised by this strong number actually. We had in our second quarter plus minus zero and now the last couple of weeks the booking has had a very steady growth every week by week. And we believe that one of the reasons for this is that the launch of the Scandinavia's most extensive snow guarantee will be one of the real reasons for that, because we will offer something completely unique in Scandinavia by offering this snow guarantee and also possibility for our guests to cancel a rebook even up to close to the stage. And we feel very confident in this guarantee since we are investing so heavily in the snow production. We also have a very strong Christmas and New Year calendar this year with an extra week, 53. where we will gain extra ski days for sure. And then the early Easter week, 12-13, means that we will also work very adjustable with the end of the season connected to how we will have opening hours, etc. And that will also help us according to what Sarah just spoke about with the scheduling and also how we will combine different type of roles within our staff. uh price increases we will increase the launching prices uh fairly one to zero to one percent as we want to become even more attractive in the launching prices and we will have a ski pass increase for the upcoming thesis four to four point five percent and we will also continue to launch and have the lowest price uh within the in the Scandinavian mountains on ski passes. So we will add an extra low price ski pass this year with Duved, and that will, of course, be complemented by the last year's success of Trösjö Storhogna and Sälen Högsjö Hotell. So some really good... price ladder with really good low price alternatives for those consumers who wants to go for that alternative, as well as the ones who wants to go for the full scope. So if I summarize where we are right now, we can see that we have a very stable development. that also enable us for further revenue growth as well as improved margins. And I think we have some really good learnings this quarter that we have to work much more with flexible costs and also look into our cost side, which we are doing and have been doing the last two months in a good manner, actually. We also continue to invest, like Sarah also said, to strengthening our guest experience and satisfaction. We can see that it really pays off. And one really important part of that is, of course, to launch this best and most extensive snow guarantee within Scandinavia. We still see a hesitant real estate market, meaning that we see a much slower development as we have thought compared to how it was in the past, meaning that we say that we will most probably coming in in the numbers like we did last year in that size. Lastly, but not least, we see a strong demand for mountain vacation, plus three in booking both for the upcoming summer as well for the winter season, respectively. So by that, we open up for Q&As.

Thank you. We will now begin the question and answer session. If you wish to ask a question, you will need to press star 1, 1 on your telephone, and wait for your name to be announced. To withdraw your question, please press star 1, 1 again. We will take our first question. Your first question comes from the line of Alice Beer from ABG Sundell Collier. Please go ahead. Your line is open.

Hi, good morning. Just a first question. Your op-ed space has grown quite a lot this fiscal year so far. Could you give us some colour on this, just How much is temporary and how should we think about the run rate? Just what you can do to improve scalability short-term.

I missed, actually, the first part of your question, Ali. Sorry. Please repeat the question.

No worries. I'll repeat. So your OPEX base, so your costs have grown quite a bit this year. Could you just give us some color on the OPEX costs and how much of this is temporary and how much you think about the run rate? Just what can you do to improve scalability and reduce costs?

Yes. I can try to answer that, Alice. During the quarter, we've had temporary increases that relate to fuel and electricity, and I guess some of the reasons may be the geopolitical situation, where we've seen increases in both especially related to electricity, that the cost have also been impacted by volume. It was very cold in January and February, so the consumption that relates to electricity was also high. Some of the increase that relates to electricity is related to price and temporary price and temporary volume, I would say. And when it comes to fuel, we have had very high prices that relate to HVO 100 that is used for more or less all vehicles.

And the price increase was more or less... 29 krona per litre the last month of April, which of course is impacting us heavily. Even if it was just one month April, in March we paid 25 SEK per litre. So of course that impacts us heavily in the quarter. So I think that's one of the reasons, and like Sara said, we are hedging electricity on our expected level, but since we had an increase of electricity use during this cold period, we had to buy electricity on the free market, and of course that costed us extra much this quarter, more than we expected.

If I continue, we also had a fairly high – we had high costs related to marketing activities, both related to the possibility to improve or increase the sales for CPAP and accommodation. And that wasn't really – the efforts didn't pay off, actually. So that would – I would see that cost or that spend as a temporary one. And we also had high marketing spend that relates to our online activities. in retail, and those are expected to slow down or decrease going forward.

Yeah, so that is what happened during the quarter, and if you then look forward, we are now, since two months back, working on our cost situation, and both from a staff perspective, but as well on purchasing activities. So I think this staircase we showed on the slide, which we call initiative to reach our financial target, if you look into the middle part of that, when we say efficient resource allocation, that is something we are working with right now. And we also expect that we are coming into our next fiscal year, 26, 27, on a new level from a cost perspective, which feels very comfortable going forward.

And the effort that relates to the combined duties, the scheduling of staff, that means that we actually reduce number of entries for FTEs. And it's a combination of temporary reports and another report before entries. So in Churchill, we have a fairly high number of that will be reduced. So we have a number of initiatives that will improve the cost base going forward.

Okay, perfect. Thank you for that answer. Moving on then, hotel sales are growing quite a bit while immediate accommodations did not this quarter. Is this a deliberate shift? Are you seeing more organic change in demand from normal accommodation to hotels? Yes.

So, again, Alice, sorry, can you please repeat the question? And I think we need to increase the volume here as well.

Talk about increase in next phase. Please repeat that.

Hotel phase. Okay. Quite a bit. Yeah. Is this, but normal mediated accommodation did not? Is this a deliberate shift or is this an organic change in the balance sheet?

So that relates to hotels. Then, of course, we've had an impact from the acquisition of Helsinki Hotellet. That has impacted, of course, the volume and the revenues that relate to hotels.

And then if we look into the accommodation, we lowered the price quite heavily during the third quarter. also tried to trigger consumers to book and so on. But I must say, all the efforts we did by increased marketing, lowered the price on accommodation, lowered the price on ski passes, didn't pay off at all. So, unfortunately, that was wasted money, more or less. I must be honest and say.

Okay. Okay, thank you. And moving on. Could you talk a bit about the rationale behind closing Vemdalen for the summer? I mean, despite this 3% higher bookings for the summer?

Yeah, absolutely. And if we look into what's happening in the market, you can say when we decided to go for a full scale of summer activities, we decided to continue the development of Åre, where it started already actually in around 2007 in small scales. Åre has been very popular. successful in driving summer activities. So when we decided to go all in for summer, we decided to continue Åre, let's go for Trysvill, let's go for Sävlen. And we did that the first three years, two years, three years. And then we said, let's add Hemsedalen, Vemdalen. But unfortunately we don't have the number of guests enough to run five resorts in the summer. So that's why we have decided to not run this climbing park as well as the lift in Vemdalen for the summer. So we still have openings for possibility to book overnight there and also buy clothing in our store etc. So that has been important to keep open. As well, we do the same in Hemsedal. We also have limited opening times, etc. But we go full and all in in Sälen, Åre and Prissel, because there we see that there is possibilities to drive these summer activities in full scale, more or less.

Okay, perfect. And then you said that 30% of the upcoming winter accommodation is already booked. Could you provide some context here? What is an average booking rate for this point in time?

We are actually a little bit, we say around 30%. So we are 30% plus. So we're a little bit above last year since we had this 3% increase. So we are on quite the same level. But what I think is important is that we have added number of beds. both these 600 new beds in Säla and we have also added Tot Hotel in Åre of course so if we then say that we are plus three percent of course it's on a very good level I must say a very stable level and if you look into the number of booked overnight it's on actually fairly high level probably the most highest level we have had since the pandemic

Okay, great. I think that was all from me.

Thank you. Thanks. We will take our next question. Your next question. Please stand by. Your next question comes from the line of Karl-Johan Bonneville from DNB College. Please go ahead. Your line is open.

Yes, good morning, Stefan and Sara. A couple of questions from you as well, please. You mentioned the insurance claim that you got the payback on and the reversal of the rental equipment accrual that you have done. How would you – I guess these are more timing effects, or how should we see them? I guess you have the insurance cost at some stage, and you also have done the accrual at some stage. But could you elaborate a little on how the timing of these things works?

We wasn't sure when we were supposed to receive this insurance contribution, but that's in place now in the third quarter. And it has been recognized in other income. When we actually rebuild the bridge, it will be recognized as an investment and included in CAPEX. So we need to treat those transactions as two separate ones. It will impact CAPEX going forward. I guess in, say, the first or second quarter of next year. And I'm not sure about the number, but it's roughly the same or a bit higher amount. It's 20.

Yeah, roughly the same number. And then also these... So it's exactly like you asked. We weren't sure when that insurance money would come. Actually, now they came a couple of weeks ago, so they gave us some positive numbers, of course.

It should be seen as a one-off item as it has impacted the property a lot. And it will not impact or, of course, it will be impacted as a depreciation, but it will the transaction will be treated as an investment.

And then the other question was around the ski rental.

Yeah, yeah. We have reduced or we have adjusted the inventory value that relates to equipment, rental equipment, and that is also one of the items. But this level effect will be seen going forward as well, but not in one quarter. It will be for a whole year, next year.

So the level effect will stay.

So if you carve out those two items, I think we are on the expected level from the expected result this quarter, more or less, you can say. So those are two one-time positive effects on the court result, of course.

Yeah, but I guess at least with the rental equipment, you must have over-accured then in previous quarters, so maybe if you're looking at the full year, then that doesn't really matter, does it?

No, correct.

That's correct.

Totally correct. Sorry.

And then on the other side, you mentioned earlier the extra marketing cost and the higher HBO 100 cost and these kind of things. Are these numbers basically matching against what you now have as the positive one-offs in the quarter, as you see? So if you take the negative one-offs you add in the quarter, we are basically on a lower level on the total.

That's a fairly good assumption, absolutely, yeah.

And I remember in QC last year, with the late Easter, you had the problem ramping down the operation in an efficient way. It looks like I've been able to ramp down much more efficiently already this year. You mentioned that's an opportunity for next year, or am I over-reading things?

No, you are right. But we are still not satisfied with that ramp down, to be honest. And that's why we have decided to be even lighter, so to say, for next year, because we have too much fixed cost. Where we are sitting in, yeah, so our business model and full opening makes us very vulnerable when the volume decrease like it did in the third quarter now. So that's why we have decided to try to keep it a little bit lighter and work much harder with these combined duties, read the scheduling, et cetera, to have a smoother operation, so to say. going forward. And that's something we also now have the organization backing up, even though it's, of course, tough when you need to do it. But it is helpful going forward.

Excellent. And when you look at the already good booking situation for the next high season, the 3% increase, How do you see the mix there developing when you're looking at international demand compared to local demand?

We continue actually to be on a quite stable development of the international guests, so they are on quite the same level. But it is actually the Swedish guests who is coming back now, so they are standing for the increase of the booking. which is very gladly to see that the Swedish guest is returning back now since a couple of years of maybe reduction since we have had high cost of interest rates, high cost of energy and high cost in general in the society. But we can also see that the consumer confidence is coming back in Sweden. And I think this is a result of that when we see the strong booking numbers.

Excellent. And one final, looking at the capex target going into 26, 27, do you see that being in absolute, say, kroners on an unchanged level compared to what you see in this year, including all those investments you have detailed?

Yes, I would say that the level will be more or less the same, and that is, of course, related to the investments in snow production that really sort of keep the levels a bit higher than usual. Yeah.

Excellent. Thank you very much and all the best out there. Thank you.

Thank you. As a reminder, if you wish to ask a question, please press star 1, 1 on your telephone. We will take our next question. Your next question comes from the line of Stefan Sternholm from Handels Bank. And please go ahead. Your line is open.

Stefan here, can you hear me? Yes. Yeah. A question on the next winter. Given that Q3 did not really meet your expectations, you talked about doing adjustments for the ramp down of the destinations, but what else can you do differently for next season?

No, but I think what I tried to explain is that we are So we are working on our fixed cost situation. We have built up too heavy organization. That's why we want to become lighter more or less. So it will be on staff. And then we are also identified a lot of different type of purchasing projects, how we want to do different type of purchasing. And so like many other companies, we are also reducing costs and looking into our total cost situation, which has been important to do for us because we really want to secure that we will not ask. be as vulnerable as we became in the third quarter this year. So we have to be able to adjust. We will also work much more with the opening hours and opening time in the end of the season, which meaning that we will have a different plan how we are running our ski resorts. So we will open first and we will close latest as we have done, but it will differentiate between the destinations. So we are working quite hard on that scheduling and such, meaning that we will be much more efficient as a totality, I can say.

Okay, thanks. My other questions have already been answered. Thank you.

Thank you. Thank you. This concludes today's question and answer session. I will now hand back for closing remarks.

Thank you so much for listening to us today. Also, thank you so much for very good. questions making us try to explain even more about our report result and by that we are wishing everyone a nice midsummer if you are in Sweden and of course everywhere else as well and enjoy now the time outdoors because we would like to do that and going to the mountains and enjoy hiking and biking

This concludes today's conference call. Thank you for participating. You may now disconnect.