Hi everyone, and welcome to this Q&A following our Q2 presentation this morning. I am Stine Klund, Investor Relations, and I'm joined by CEO Sondre Gravir and CFO Cecilie Elde. Sondre will go through a short recap of the main messages from the Q2 report before we will head over to the Q&A. Please raise your hand if you want to ask a question.
Thank you, Stine, and good morning everyone. Great to see so many of you on the call today. We have reported our Q2 figures for 2025, and we are following the same path as we have been following for the last couple of quarters. We deliver a good financial result driven by high activity levels in our clubs. We see that the momentum in club activity that we've seen from the first half of the first quarter of 2025 has continued into the second quarter, with recent growth overall, but also very good and positive development on group training workouts in all markets, not only in Norway, but really in all markets. Total group visits increased by 9% in the quarter. As we said before, the reason why we're focusing on this, on visits and group visits, is that we see that these members are really active and loyal members.
They are extremely happy with the product offering we have, which is much better than any other competitor in the market. We really see that they are driving them up the yield and also up the revenue. Revenues grew by 10% in the quarter, landed at NOK 1,393 million. EBIT before hybrid 16 grew by 35% in the quarter to NOK 215 million. We have also communicated earlier that we would distribute a dividend based on the first half earnings. We are confirming today, we will distribute a dividend of 50% of first half earnings on top of the ongoing share buyback programs that will bring 2025 capital returns well above 50%, as we have laid out as the minimum target. Total dividend payment will be NOK 6.3 per share, total amounting to NOK 127 million.
This is also an important quarter because it marks, it also marks the quarter where we, if you look at the last 12 months, have reached the target that we communicated back in the capital markets in 2022, where we said we're going to reach EBITDA of NOK 800 million midterm. We reached that target just below three years down the road. We are also then well on track to deliver on the target we communicated earlier this spring on the capital markets day and the midterm target of NOK 1.1 billion in EBITDA. We will keep a steady course going forward. We will invest in our products. We will make sure that we have the best group training offering in the market and will continue on the path we've laid out over the last couple of quarters. With that, I open the floor for questions.
Håkon Fugle, please go ahead.
Thank you. Håkon Fugle from SEB here. I just want to know a bit about the impact from campaigning activity driving member growth in the quarter, and how should we think about that for the remaining of 2025?
Yeah, we had, I would say, it's a normal quarter in Q2 in terms of campaigning activity. We have a very clear campaign strategy where we don't do long-term discounts on the membership price, meaning that you cannot buy a membership with a 40% discount, for example, over a long time. We do different types of campaigns where there is an incentive to become a new member. It might, for example, be the first month for free, but then the second month you pay the full gift price based on the membership type. I would say that Q2 has been a very normal quarter in terms of campaign activities in the different markets, both in terms of campaign mechanism and marketing investments.
Thank you. I have a follow-up on that. Just around the sort of difference between Norway and Sweden, you're seeing rather high membership growth in Norway in the quarter, yet sort of a lower yield, but it seems like it's sort of the opposite in Sweden. Why is that?
Norway has performed very well when it comes to volume, and all of that has also increased their yield during the last quarters. What we see in Sweden is that with the expansion of our product offering, especially within group training, we've been able to upsell to more premium memberships, which we now see in the yield as well. I would say that the development, the volume development in Sweden has been very good, even though it's somewhat below Norway, but they are on a good trajectory and are showing the same path to improving results that we have seen in Norway over the last 18 months.
Thank you. That's it for me. Thank you for taking my questions.
Thank you.
Over to Peter Hellander.
Thank you. Just on the mix of the costs, it seems like you have a good development in club OpEx when you adjust for FX change, but when the overhead is up something like 12.3% adjusted for FX, which has been increasing quite fast, this is faster. Could you explain what's happening? It's not that many million kroner, but I was just wondering what's happening. 12% is much.
Yeah, so you're right. We have a step up in overhead costs this quarter if you compare it to last year. It's really the comparison to last year, which is affected by a one-off in Q2 2024. It's technical. It's related to the implementation of a new ERP system where we did a reclassification from OpEx to CapEx. If you adjust for that sort of one-off, the underlying increase, currency adjusted, is 6% year-over-year. It reflects the wage increases that we have had and just in general improvement in sort of business activities to cater for further growth. Underlying, I would say it's not that much higher than the core operating cost where we really keep our focus on being disciplined.
Thank you.
I will move to the next one.
Just to follow up on that question, I noticed on one of your slides, you write that your forward cost outlook is affected by price changes on key input factors and wage adjustments. I believe previously we were sort of highlighting inflation as a cost driver. Is there any change in your cost guidance as such, or is this just wording?
It's not really a change in the guiding at all. It's mainly wording, but it's just to sort of allude that some of our input factors might increase more than the pure inflation. It's always a weighted average. I think the key message is that we aim for being very disciplined in our cost base, but we will do strategic investments where we think that's necessary. Group training is something that we have listed for several quarters, which is important for us to drive growth and drive yield going forward. That will be above inflation going forward.
That is a good observation, Ole Martin. As Cecilie said, it's not changing in the guiding, but we just want to be specific on giving examples of the input factors. I think, to your question, Ole, I'm good on overhead cost. Seeing that overhead cost is increasing with 6%, knowing the type of educational level, etc., we have on our office people, it is just a reflection that salary increase in the market for, for example, developers have been higher than inflation. The salary has been increased with 5%-6%, hence overhead cost is increasing with 6%. There is not a major step up in either license cost or FTEs or anything. It's just reflecting that some of the input factors have a somewhat higher increase than inflation. One third of the cost is salary. One third of the cost is rental cost.
One third of the cost is other costs linked to marketing, licenses, etc. Typically, over the last couple of quarters or years, we have seen that salaries increasing a little bit more than inflation, as you know. Going forward, we think that will be more simple.
Just to follow up on that, Sondre, can you remind me what is your hedging positions on energy now or electricity?
For now, until the end of 2026, we have hedged around 50% of the consumption and then 25% for the coming periods in 2027, which will be a rolling hedge going forward. Keeping predictability and keeping flexibility is over in them.
Is that equal across all countries and throughout all quarters, or is it just the winter, or how is this?
It's throughout all quarters, but not across all countries. The hedge is for the full group's 50% of the whole transaction, which is only in Norway and Sweden.
Okay, perfect. Thank you.
Thank you. Barbara Smith.
Yes, good morning. I have three questions. Initially, mostly about the presentation and the emphasis on the virtuous circle created by investments in group exercise. I was wondering what the upside of this is for countries outside of Norway as you're ramping up this same model in those countries. Could you give me an idea of what is the percentage of your members in Norway that participate in group exercise and how that compares with the other markets?
Yeah, it's a good question. If you just take a short step back, when we so to say reopened operation after COVID, we took a very deliberate decision to invest some of it in our group training offering. Even though we saw that the visits didn't return that early to our classes, we really wanted to invest in this. That's what we've been doing constantly since COVID. Given the financial situation we had back then, we basically didn't have enough liquidity to invest in parallel in all markets. We really doubled down in Norway. We saw that the product offering in Norway was really strengthened, and we saw that was followed by a strong visit increase. Based on that, and as our liquidity position improved, we've established the same type of investments and done the same and basically copied the formula for Norway in the other markets.
We're really starting to see the effects now across all markets. As I showed in the presentation this morning, now we see a cost development in all markets, not only driven by Norway. Actually, we see a higher percentage increase in visits in some of the other markets than we do in Norway. We are really seeing that the formula is working. We see that for the quarter, as we reported this morning, we see that the number of visits on group training increased more than we increased classes. The number of visits increased with 9%, but we increased class volume with 7%. Meaning that when we add the class, we actually get more demand and we really bring in new people into group training.
Because this would not, you know, it would be nice and it's great for member loyalty if it was only those members who already trained in classes that just train more when we add capacity. What we really follow is the development in unique visitors, really seeing that we bring new categories and new target groups into our classes. We see that across all markets. That's the reason why we continue on this path. We will launch new products, but really make sure that we roll out more of the concepts that we see a big demand for. That's a background for the 16% increase in classes for the fall that we also communicated in the presentation. When it comes to the second point, Barbara, it's not a big difference across markets in terms of the share of members using group training.
What is it in Norway?
We don't communicate the exact share.
Okay. The other questions are on the same topic. You mentioned that, you know, attendance, higher attendance, and, you know, higher number of workouts per member are good for length of stay. What is the current length of stay?
That's also something we don't report on a quarterly basis.
Can you give us an idea of the growth of that?
It's improving. As we said on the capital markets day, and we showed some numbers on the capital markets day in the spring, we see that churn is going down. Of course, as a result of that, bringing member duration up. What we have also communicated on capital markets day is that the member duration of a group training member is nearly two times the member duration of a member who is not training group training. As we see when group training visits are increasing, this is of course also leading to a positive development in member duration. We don't report on that number on a quarterly basis.
Okay. The last thing is about the constraints to this model, which is space, I guess. One of them is space and utilization. You mentioned 1.49 members per square meter. With the current model that you have with a lot of group exercise, you know, requiring studios and such, what do you estimate is the realistic full potential in terms of member per square meter?
Let me put it this way. In the foreseeable future, space will not be a limiting factor for growth. We have clubs that are at the top level of the average, what we see now, and they still have a high membership satisfaction. What we also see is that we get a better square meter utilization when we do a lot of group training versus normal fitness floor visits. The 1.49 members per square meter that we're reporting for this quarter will continue to grow. There's still a big upside before we reach any, so to say, roof on that number.
You're saying that three per square meter is realistic?
I'm not saying that that's the target. I'm saying that we have clubs in the portfolio at that level, and they still deliver strong member satisfaction. Just to give an example, there's no limitation in terms of space at the moment. That's not a limiting factor for growth for us.
Okay, great. Thank you, Sondre.
Thank you.
[audio distortion] please go ahead.
Yeah, thank you. Just coming back to Sweden, as we pointed out, you have invested in clubs and classes for some time. As we pointed out, Sondre, you are copying what you did in Norway. For sure, Norway has shown impressive earnings development. I understand that the KPIs in Sweden are definitely improving, but is it also possible to say something about when you expect to see a more, call it, accelerated earnings momentum in Sweden? Is this something that you more or less will be gradually, or is this an effect that you expect will be more visible in 2026? Thanks.
We do not guide on sort of the results for Sweden going forward, but I think what we've seen in the last quarter and this quarter is that we sort of turned the curve from going from a negative development to a positive development. If you look at the development that we've had in Norway as a guide, you will not see an acceleration in earnings, but I think the gradual improvement that we expect to see in all countries, you will see in Sweden as well. It is really all about when we are able to build volume and improve yield at the same time, that sort of had an extreme cross-route to EBITDA, and that you can expect to see. It will be a gradual positive development.
Perfect. Just a short question. Is there any quality, regional difference between how you're able to yield up in Norway versus the Swedish markets on the back of these improvements?
Not really. We see the same positive development in terms of upsell to higher price membership based on product launches, etc. In, for example, Stockholm, as we see in Oslo. Even though there is a different competitive situation, of course, in the different markets, the competition is, I would say, still strong in all markets. There's not a big difference. We see that the new product launches that we have done and also the rollout of the different products that we have developed is at least as well received in the Swedish market as in the Norwegian market.
Thank you.
Any other questions before we round off?
Yes, thank you. It's been an exceptionally warm summer. Has that had any impact on the activity in your clubs?
We are, as we had communicated earlier, you know, if you define the summer as June, I guess we can comment quite in detail. If you define the summer as July, I could not comment too detailed, Ole Martin. I think, you know, as we have communicated in the outlook and indicated in the outlook in the presentation this morning, that we are on a steady course. That also means that the start of this quarter has been as expected.
Is it fair to assume that when it's very warm, you have more activity in your clubs? Do you see that normally?
Weather is, of course, impacting the activity levels from day to day. Typically, of course, nice weather usually means somewhat lower visits. With extreme warmth, you could assume that you might get some more visits. Yes, weather is a factor for us if you look at the daily development. We don't like to use weather as an excuse either for bad results or as an explanation of good results.
Okay, perfect. Thanks.
Thank you for your questions, for listening in.
Thank you.
Thank you.
Have a nice day.