Good morning, everyone, and welcome to SATS Q1 Q&A session. Sondre and Cecilie have just.
Quick.
Q1 Q&A session. Sondre and Cecilie have just presented the SATS Q1 financial.
Seems like everyone is connected now. As Jonas introduced, this is a Q&A session, so we are ready to answer any questions if you have. Not a very vocal group here today.
Can someone confirm that you hear us? Yes.
You are good.
Yes, hello. Congrats on the solid quarter. I was wondering a bit about Denmark. We saw quite a strong margin development there in Q1. Could you elaborate a bit on sort of what kind of measures you've taken in Denmark over the last quarters to sort of ensure this strong performance?
So of course, the strong performance in Denmark is partly affected by the extraordinary COVID compensation that we got. It was delayed from 2020 and amounts to around NOK 18 million. So if you deduct that from the results, we still see a positive development over time in Denmark. We worked with operations getting a number of members up. We also closed unprofitable clubs during the year and in this quarter. So that, of course, has a positive impact on development, and we expect to see a positive development going forward as well.
All right. Thank you. That was all from me.
Thank you, Joachim. Any further questions this morning?
Doesn't seem to be so. We will have several.
Hi.
Yeah, sorry. That's it.
Yeah, actually, I was a little bit late to the call, so sorry for that. It might be that my question has already been answered. Can you share some light on the development in Sweden and how you see that? Looking at the different segment, you could argue that Sweden is slightly on the soft side versus what Norway is seeing. Some comments regarding that would be helpful. Again, sorry if that has already been answered. Thank you.
Yep. I can answer that. Thank you, Petter. When it comes to the development in Sweden, we are happy to see revenue growth of 8%. Of course, revenue development in our business, throughout the consumer industries, is a mix of or is a result of volume and price. And we are optimizing for revenue. So we have done measures on the membership pricing side, which will affect volume somewhat. And that's what we have seen. At the same time, we see that more members in Sweden are buying memberships that give access to classes. So that means higher-priced memberships. That's also driving price upwards and hence resulting in a good revenue development. And then when it comes to the operating result, Sweden is the country where we have opened the most new clubs.
As Cecilie showed in the financial part of the presentation earlier today, you can see that the mature clubs have somewhat better profitability than the newly opened clubs. We are still working to bring the newly opened clubs in Sweden up to a level of the mature portfolio. Then we will also see profitability improving in the Swedish market. We are happy with the revenue development, and we will see improvements going forward. We will continue to invest quite heavily in the product offering to our Swedish members.
Great. Thank you, Sondre.
Great. Any further questions?
I missed out on the start of this call, so maybe this question has been answered, but I'll try anyways. The cost of the Swedish party, was that booked in Sweden, or was that been booked across all geographies?
It was actually a Nordic party. The cost for that is booked according to the participants per country. The size of the country is representative. They all get their fair share of that cost.
Yeah. But would you characterize that as an annual event going forward, or is this something special that you had in Q1 this year?
No, it will not be an annual event to this extent. It will probably happen again, but this is not something that will be scheduled as recurring, even though we will gather all our staff from time to time, for sure.
Another question. If you look at the membership base where you see it from now, how should we think about seasonality going into Q2 and Q3? Are we going to see you being more aggressive members, or should we expect a normal seasonality here?
I think you should expect normal seasonality. But as Sondre said just before you came in, [the point] is that we are now looking more to optimize for revenue, which means that we want to take out higher price for the broader and more extensive product offering that we have. And that means that we have to maybe forgo some volume but still see healthier revenue growth. But seasonality will be the same as we've seen historically.
Okay. Perfect. Thank you.
If I could just follow up on that question from Ole Martin. You talked about higher prices. The price increases, they have been done now for 2024, or are there more to come? Thank you.
No, we have performed the annual price adjustments that we normally do. They come in gradually throughout the quarter. From next quarter, you will see sort of the full effect of the price adjustments that we have done.
Is it possible to quantify how much of the price increases were affecting this quarter in percentage terms? Thank you.
I would say that 75-ish of the full effect is in the Q1. So what we're lacking is a third of the sort of the adjustment, the last one where we increased those members with the lowest price.
Understood. Thank you.
Any further questions? If not, I suggest we leave it there. Thank you all for joining the call this morning. We wish you all a healthy and happy Tuesday. Thank you.
Thank you.
Thank you.
Thank you.