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.