Hi everyone, and welcome to SATS Q1 Q&A. I'm Stine Klund, Investor Relations in SATS, and I'm joined by Sondre Gravir and Cecilie Elde. I'm sure many of you are curious about the CMD message, but we will await this until the dedicated Q&A in the CMD presentation. For now, we will focus only on questions related to the first quarter. Let's go ahead. If you want to give a brief introduction about the quarter, Sondre, and jump into questions with raised hands after that.
I'll do that. Good morning, everyone, and thank you for joining this Q&A session. As Stine said, this will be a focus on Q1. We're leaving behind us a strong Q1. We have delivered a member growth of 24,000 in the quarter, which is the highest member growth we have had in the first quarter ever in SATS. This is compared to a growth first quarter last year of 5,000, bringing the member base to 757,000, and also with the underlying then RPM increase of 6% in the quarter. We also see continuous strong activity levels in our clubs. Visits grew by 7% to 14.1 million visits in the quarter. This is also driven by a continued good development in our group training offering and also visits. Total visits on group training grew by 16% in the quarter.
The sum of all of this is a solid financial delivery where we increased EBIT by 38% in the quarter. We also communicated during the Q1 presentation this morning that we will, according to our dividend policy, which is to distribute minimum 50% of net profit in a combination of dividends and share buybacks, distribute 50% dividend based on the first half 2025 result on top of the already executed and upcoming share buybacks, which will in total mean that we are distributing well above our stated minimum level of 50%. That was the key messages we had during the Q1 presentation this morning. By that, we leave it up for questions.
Filip Bjerke.
Thank you for taking my question. I'm just wondering about the development in other OpEx. You are stating in the pre-call transcript that the celebration cost related to the event this year is mostly in line with last year's SATS festival. Should we think of the development year-over-year here as a higher marketing or all the delta is related to marketing, and how should we think about the marketing spend year-over-year going forward? Thank you.
Yes, we have additional marketing push in the quarter supporting the strong growth that we see in the memberships. Yes, you're right, the activity related to the celebration and the festival we had last year, the cost is more or less the same. On top of that, we have the additional celebration cost, if you can call it that. The underlying cost base is not elevated any more than the additional cost that we have added on top related to the group training and enhancing the product offering. The underlying cost base is as expected.
Thanks.
Any other Q1 questions from the audience?
Quite good this morning. That's fine. If there are no more questions, it doesn't seem to be so. I guess the numbers are clear and understood, which is great. There we have Ole Petter.
Hello all. Firstly, so on the cost base again, the underlying is as expected, but some additional cost due to marketing in this quarter and also due to higher costs related to group training. Since there's a big deviation in this quarter on the cost base versus consensus expectations, you have a big positive deviation when it comes to customer growth that will give a good kind of earnings contribution for the coming quarters. In this quarter, it's kind of hampered by this cost increase. You have commented on, could a little bit help us again what this kind of the elevated level going forward and what should be assumed as some extra marketing push. I think it's quite some questions in the market related to the cost base.
I think when you look at the total cost base, you have to exclude the direct cost because direct cost is tightly linked to the other revenues that we have. If you look at the pure club cost without direct cost, the increase is lower. The increase is driven partially by the additional marketing push that supports the sale. We have added classes to the schedule, and that kind of cost will continue as we go forward. It is an investment that we do today in order to fuel future growth. That part of the cost base you should expect. What we have said over several quarters is that we expect other costs to develop in line with inflation. Of course, there will always be some seasonal variance, but if you look on a rolling 12 perspective, that still holds.
The celebration that we have, the 30-year celebration, has driven some costs. Of course, the product offering drives costs, but that's positive costs that will drive future growth.
Thank you. Is it possible to quantify the kind of extra marketing, extra celebration, and so on, so that we get kind of the cost base right from here?
Yeah. The additional cost is around NOK 10 million, excluding the cost related to the celebration internally, which we also had last year. That is sort of neutral. We say that we have increased 17,000 classes, and that drives around NOK 10 million in additional cost in the quarter.
There's a 6% increase year-over-year in club OpEx, which is as followed from the reporting with the underlying inflation and then the additional investment in the group training, as we indicate here. I think it's pretty much according to guidance.
Thank you.
Peter Hellemander.
Yes. Good morning. You show an increase in overhead of about 9%. Could you explain a little bit what lies in that? Is there marketing in that?
No, there's no marketing in that cost. Partially, that increase is linked to the share investment program that we had in the first quarter, so some additional cost related to that. Other than that, there are no other than seasonal variance with some additional internal coursing. The cost for overhead is at the level that we expect going forward. The increase compared to last year seems high, but it's mostly related to some additional costs from the share purchase program.
Ole Petter.
Maybe you could clarify a bit regarding the customer growth that was very strong in Q1, but you had a comment that we should not expect the same kind of growth going forward. This can be interpreted in different ways. It could also be that for the remainder of the year, you will have some quarters down, you will have some quarter up. If you should expect kind of the same growth from quarter to quarter as last year, it would be one interpretation. There could also be other interpretations creating some confusion there. What do you really mean by this comment that, yes, strong growth in terms of customers in Q1, but do not expect it to continue at that level?
Yeah. The first quarter showed a very strong net growth compared to last year. We grew with 24,000 members compared to 5,000 last year. It is partially due to the additional marketing push and higher than normal sales. Also, we see that churn was lower after the price adjustments that we did in the quarter. What we are trying to say is that the increase going from 5,000 growth in the first quarter to 24,000 in this quarter, that increase compared to last year, we do not expect to see in the coming quarters. We expect the coming quarters to develop as normal with normal seasonality. Of course, we expect growth, but not to the extent that we saw in the first quarter, which is unusually high.
Thanks. A good clarification.
Just to clarify that again, what you're saying is that the quarter-on-quarter growth here will be about normal, right? The quarter-on-quarter growth of members, you expect to be quite normal going forward, right?
Yes, correct.
Okay. Thanks.
Good. Any further questions? We will round off. We hope to see you again in the CMD presentation, which is starting at 10:30, either physically at Hotel Continental or through the webcast.
Thank you.
Thank you. Bye.
Cheers.