SATS is back on track

The Scandinavian fitness club operator SATS achieved a record net member growth in the last quarter driven by strong sales and low churn. At the end of October, the member base was fully recovered, ahead of expectations. The quarter also showed underlying growth in visits, yield and other revenues. The number of members has increased by 41,000 (+7%) during Q3 2021 leading to a total member base of 653,000, reducing the gap versus last year to -1%. Total revenues in the quarter increased 2% to NOK 971m (97,8 EURm) and operating expenses increased due to 11 additional clubs and temporarily higher sales campaign costs in the quarter. Adjusted EBITDA is recovering but was down 16% to NOK 83m (8,4 EURm) in the quarter.

The recovery has been faster than expected. Member base is fully recovered and underlying growth in member visits, yield and other revenues are all very positive. The SATS organization is full of energy and ready to make even more people healthier and happier”, says Sondre Gravir, CEO of SATS.

During the pandemic there was uncertainty regarding potential structural changes for the health and fitness industry and member habits. Now, a few months after most restrictions were lifted, the company notes that its member habits and demographics are largely unchanged. We also see that the pandemic highlighted the importance of living a healthy lifestyle. Its members are more active than before the pandemic, with higher visits per week per member.

Nevertheless, the positive momentum is not yet fully reflected in financial results as the ramp-up in members and reduction in freeze levels still impacted the quarter. However, revenue run-rate at the end of the quarter approached pre-pandemic levels. SATS’s liquidity position is sufficient to handle existing operations and its accelerated expansion plan, provided no material change in the current regulatory environment.

SATS has throughout the pandemic strengthened the foundation for future growth through multiple levers. It has capacity in its clusters for continued membership growth and expanded its club footprint significantly. In 2020 and YTD 2021 SATS has opened 22 new clubs. The company has an ambitious greenfield roll-out plan with 17 new clubs to be opened throughout 2023. It also sees the potential of improving the average revenue per member by offering adjacent products and services, continued development of its personal training and retail offering and pricing optimization. The company hast launched “Mentra” by SATS which will further increase its digital presence both in new and existing target groups.

Source: SATS
Picture: SATS

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