That was us in one minute. Good morning, everyone, both here at the SATS Colosseum and to our digital audience. Welcome to our first Capital Markets Day. My name is Sondre Gravir, and I'm the CEO of SATS. This is the full management team in SATS, and most of them are present here today. Cecilie, CFO, Silje, heading product and retail, Marianne, heading marketing, communication and member care, Wenche, country manager Norway, and Gaute, heading consumer insight and technology, will all present here today. In addition, in the management team of SATS, we have Linda Li, country manager in Sweden, Jussi, country manager in Finland, and Kim, country manager in Denmark. Lastly, we also have Torodd, who are present here today, who will join November first, heading people and operations.
This is a management team with extensive experience from the fitness industry, both SATS and other operators, and from other relevant industries like retail, consumer goods, telecom, travel and digital services. I just have to say, of course, I'm not objective, but these are fantastic personalities and a great team that I'm very proud and humble to be working together with. We have an exciting agenda ahead of us today. Just about two hours presentation, including a club tour by Wenche and Rune, the club manager here at SATS Colosseum, and then we will have time for Q&A. To our digital audience, please feel free to ask questions along the way through the streaming interface or directly to investor relations, stine.klund@sats.no, and we will save them for the Q&A session.
To those present here in the room, we are after all at a fantastic fitness club, so I really hope that you will join us for a HIIT class together after the Q&A. This is a great class also for those of you who have never been to a class before or have avoided visiting a gym over the last couple of years. After the class, we will serve lunch and have some time for mingling. I will start by giving you a short update on where we stand, the Nordic fitness market in general, and our priorities as a company going forward. SATS vision is to make people healthier and happier, and this vision is truly lived out every day by our 10,000 inspiring colleagues across Norway, Sweden, Denmark and Finland.
Going out of the third quarter this year, we are making 708,000 members healthier and happier in our 275 clubs. Since its inception and opening in 1995, SATS has been pioneering the Nordic fitness market by continuously expanding its offering and footprint. The journey started when SATS opened its first eight clubs. Six years later, ELIXIA was started, and in 2014, the two companies merged, forming what today is SATS. The member base has been growing year after year, as you can see here, continuing to make more people in the Nordics physically active. During the third quarter this year, we made an important leap forward in terms of member growth.
The net growth of 36,000 members is a proof point of our ability to recover the member base, first back to 2019 levels with members per club, and then further on from there, as we will elaborate on today, also in Cecilie's presentation. The run rate of the member base is important to us and we have therefore done a strong marketing push after the summer, both strategically long-term campaigning, focusing on the SATS brand and the unique offering as a one-stop shop for training, and then selected tactical campaigns in the different markets to boost sales. We are very pleased to report this strong member growth in the quarter, despite a more challenging macroeconomic environment. So far, as we lay out here on this slide, we see no signs of weaker consumer sentiment.
The Nordic population is prioritizing to stay active even with a somewhat smaller wallet. We follow several parameters on this topic, and as you can see here, in the third quarter, we have had a record high sales. We see lower churn than in Q3 2019. We have not seen any signs of members trading down to cheaper memberships, either with low cost operators like Fresh Fitness or to a lower price SATS membership. We have seen the average retail basket size increasing compared to Q3 2019. These trends with strong sales, we have also seen continued now in October.
We are also very happy to see that our members are more happy and more healthy than ever, proven by our NPS score and visit member data. Member satisfaction measured by NPS is at record high levels, and visit per member is 5% higher than in 2019. We know that active members, they are, in general, very happy members, and they stay with us much longer than our passive members. We believe that our vision of making people healthier and happier is more important than ever. As the market leader in the industry, we have a unique position to contribute to making the world more sustainable, and we also want to make sure that we, as a company, is well-prepared to excel in a world that reaches UN sustainability goals. Hand-in-hand with public health goes inclusion, jobs and empowerment, and energy management.
I will spend some time now to go through how we work within these three areas. First, on inactivity. Inactivity is a huge public health problem, probably bigger than people realize, also in the Nordics. As an example, Folkehelseinstituttet in Norway reported recently that the majority of the Norwegian population are classified as overweight or obese. This has major health implications for the individuals in that group and also a huge cost for the society. This is the situation in the country with one of the most active populations in Europe, despite all the well-known benefits of activity. Luckily, the good intentions are in place. Today, just about 20% of the Nordic populations are member in a fitness club, but 44% of the population actually say that they will be a member one year down the road, laying the foundation of a growing market.
By getting more people into our clubs, by helping them to succeed with their training and to get good training habits, which Gaute will talk more about in his presentation, we make a substantial contribution to the economy and to the UN Sustainable Development Goal 3, good health and well-being. The World Health Organization published a report just a few days ago with quite a forceful key message that I want to read.
Almost 500 million people will develop heart disease, obesity, diabetes, or other non-communicable diseases attributable to physical inactivity between 2020 and 2030, costing $27 billion annually if governments don't take urgent actions to encourage more physical activity among their population." This is a quite forceful message from the World Health Organization, and it gives us a strong indication of the importance of what we are doing in SATS every day, hence our vision of making people healthier and happier. Oslo Economics has also calculated that the SATS socioeconomic welfare contribution amounts to around NOK 11 billion per year. The second area I want to focus on is inclusion, jobs, and empowerment. This is also key for us in SATS. Our work to make people healthier and happier, of course, also applies to our employees.
Employing around 10,000 people across the Nordic, of which many are young people having their first job ever, we have a significant responsibility as an employer. We are working hard to contribute to a society where ambition and attitude let you shape your future regardless and fully independent of your background in any dimension. In SATS, you can make a lifelong career and become a role model and a leader without any formal education, and we believe this is very important in our society today. Our staff is well-educated and member-oriented and are trained to live according to our values of putting members first, being professional and accountable, and extraordinary. We have the necessary courses and education in SATS Academy, supporting our employees in their development, both professionally and personally.
We want to be professional along the full employee journey and contribute to the UN Sustainable Development Goal 5, gender equality, and 8, decent work and economic growth. This makes sense for the society and for SATS as a company, enabling us to attracting the best people who put our members first every day. For those leaving SATS, give them a strong starting point, helping them to succeed in their later professional life. Lastly, it's also important for us, even though it's big words, to contribute to a healthy planet. We are reporting full climate accounts, including scope 1 to 3, as we believe quantification is a first step towards change. We have, over the past year, implemented measures to reduce our energy consumption and have stepped up these initiatives now as we stand in the middle of an energy crisis.
A few examples are the implementation of systems to automatically control ventilation, optimizing air amounts based on the different demand, and visits in our clubs, of course, during the day. Our Healthy Planet initiative contributes to UN Sustainable Development Goal 12, responsible consumption and production, and Goal 13, climate action. Moving on. Looking into the overall Nordic fitness market, there are unfortunately no available market data for the total market size of the fitness market in the Nordics in 2020 and 2021. Looking at the years until 2019 gives us a good indication of the growth we expect to continue to see going forward. There are several key drivers supporting this growth. A bounce back after the pandemic, as the focus on health and wellness is really put on the agenda in people's mind.
Growing demand for fitness among younger age groups, I will come back to this point. Affordability of fitness memberships, with fitness membership prices in the Nordics being relatively low compared to the average in Europe. Market maturity of balance between low cost operators and full-service operators, both growing the market, which I will also comment on. This slide has a quite powerful message. Coming back to the importance of younger generations driving the market growth, as you can see on the left-hand side of the slide, we see a significantly higher fitness penetration among the younger generation than the rest of the population. This goes across the Nordics. The younger generation are keeping their good training habits as they get older, fueling the growth in the market. This is what we call the generation effect.
These segments are very important for SATS, and we are currently seeing strong growth in this group. As an example, in Norway, visits from members between 16 and 25 years old was 47% higher in September 2022 compared to September 2019, and this, we believe, is quite impressive. Taking into account that younger people now more often are dropping out of organized sport as football, handball, et cetera, it is great for us to see that we can be an important contributor to help them stay active. On the market maturity, where we see that the European fitness markets are currently, at least in some markets, experiencing high growth by low cost players.
The low cost player growth has flattened out in the Nordics after a very strong club growth in these segments some years ago, making the Nordic fitness market more balanced, and with growth driven both by low cost operators and full service operators like SATS. In this Nordic fitness market, SATS is the clear market leader, and we have a number of unique differentiators creating powerful competitive advantages to our members. We have the best, widest, and most compelling product offering in the Nordic fitness market. We have the best location and facilities. We have leading support tools for our members, like the SATS App. We have skilled, engaged, and inspiring people. We have incomparable strong club clusters in the bigger cities, and we have a leading digital product offering with SATS Mentra. This is the foundation we build upon when looking ahead.
To succeed with our vision, we focus on four strategic pillars, people, product, presence, and promise. We believe that by developing these four pillars, we will further strengthen our competitive advantage and position, and then support this development by applying a one-company approach with one operating model across clubs and markets, which Wenche will talk about soon. We have a clear long-term strategy, and the fitness industry does not look fundamentally different now than before the pandemic. There is still strong demand, and increased focus on health and well-being is further driving the growth of the market. We believe that the SATS position is stronger than ever, among others proven by our strong member growth in the third quarter. We are on a clear path to deliver a very strong financial potential in our current portfolio.
However, we are now in a more challenging macroeconomic situation, which is affecting us in several areas. Inflation, and especially the high energy prices, is weakening our financial delivery short-term. When it comes to the softer consumer purchasing power, we have, as I mentioned, not seen any negative effects so far. We believe that people will prioritize investing in their health and wellbeing, but of course, we cannot be certain. Given this as a stable situation, we have two clear priorities going forward in the short term. We will keep full focus on increasing the number of members per club and demonstrate strong cost discipline and capitalize on the scalability of the business, and these two areas will support and improve our financial delivery going forward.
Cecilie will come back to this in depth in her part of the presentation, and also focus on what we see as the financial capacity in the current portfolio midterm and on our longer term financial ambition. As a team, also being represented here today, we are committed on delivering on our vision, which goes hand-in-hand on delivering on our financial ambition. Now we will hear from Silje, our product and retail director, who will update you on the work within these areas. Thank you.
Thank you, Sondre. As Sondre said, my name is Silje Ree. I'm leading product and retail within SATS Nordics. Now, I assume that all of you are SATS members. Still, before we dive into the content, I want to give you some more flavor about what SATS really is and how the clubs look like. When you enter a SATS club, the first thing that meets you is the reception and the retail area. The reception is manned with skilled people welcoming you and helping you out if you need any help. We also have a quite big retail shop with the nutrition products, clothes, accessories, basically everything you need for your training.
If you have forgotten something, or if you need some extra energy before your training or after your training, or just some extra inspiration and motivation for your workout, you can find it in the shop. We move into the fitness floor. We have the broadest equipment mix in the Nordics from top equipment suppliers. Here on the fitness floor, you also find our personal trainers. If you lack motivation or if you have some specific goals that you want help to reach, for example, get a better runner or get stronger, the PTs are here to help you out. As you all know, life happens.
I guess you all had a hurting back or a hurting neck from sitting still all day, or a knee that doesn't work the way it should, which hinders you from getting the most out of your workout. Our physiotherapists are here to help you out. We have physiotherapy at the biggest clubs in Norway and Sweden. More than 30 therapists that are here to help you if you have any pain. And they also work closely with the PTs to get you back on track again as soon and fast as possible. More than 50% of our members are group training members. And we have a broad selection of group training classes, more than 100 classes within several categories, both strength, cardio, yoga, et cetera.
I would say it's nearly impossible to not find something that fits you and your goals, whether it is to get stronger, faster, or more flexible, or just to calm down after a stressful day in the office. Within group training, we also offer more specialized concepts. I guess that all of you that are sitting in this room hear the pumping music from below. That is our new HIIT concept that you will get to try later today. I will talk more about this later. We also have other specialized concepts. We have hot rooms where you can do hot yoga or Pilates, among other concepts. We also do group training on the fitness floor.
Indoor running is one of our biggest products, which we do out in the cardio park on the fitness floor. Our performance concept also will come back to where you do heavy strength training out on the fitness floor together with a personal trainer is another example. I have small kids, and I think the biggest hurdle for me to go to work out is my kids. It's great to know that I can bring them to training. They can have fun with other kids and be taken good care of by skilled people at SATS with our childcare concept, MiniSATS. This is great for families that also want to work out, and the kids can have fun at the same time.
Maybe the most important part is not only the physical products and facilities that do the magic at SATS. I think most of all it's our passionate and professional employees and our members that together create a strong community. Because working out in a completely empty club would not make the same feeling. I think it's the feeling of working out together with other people and with the SATS employees guiding you that makes the whole difference. You get the energy and the feel of belonging to a group. I want to deep dive a bit into group training, our core product. Why is group training important for us? I think a lot of people find it quite difficult to motivate themselves to work out on their own.
They want a skilled and inspiring instructor to guide them through and push them through their workout, and they want to feel the energy and the support from other people working out together with them. We know that group training members, they are the most loyal members. They stay for 1.8 times longer than other members. Also they are very happy with the offering. Our NPS now is at 72, which is extremely high. I think it's the highest ever in SATS on group training, which is really good. To give all these members great training experiences, we offer more than 10,000 group training classes every single week in the Nordics.
We continuously work to optimize both our class portfolio and the class time schedules to match our members' preferences and make sure that we offer what our members want and need. For example, at Colosseum, where we are today, we have more than 150 classes every week. Our most popular class, which you heard the music from, is our newly launched HIIT concept. Last week, we had 37 HIIT classes with more than 1,200 participants. We launched this concept this spring. Colosseum was the first club out. Take a look at this. Why did we launch this?
As Sondre said, a great share of our members is actually below 30 years old, and this share is increasing, and we need to stay relevant and adjust our offering to this group, both in terms of type of classes, the atmosphere, the instructor profiles, the music, which is extremely important, and the way we communicate. We also wanted to meet the competition from the smaller and more specialized, boutique gyms that we saw were gaining foothold in our largest cities. I think we have succeeded with this concept because what we see is that the participants are younger than the regular group training members, and we also see a strong cluster effect. We see that people joining these classes, they travel longer distances, and we get more people from clubs outside, Colosseum.
Also the number of participants and the load factor is among the highest in our product portfolio. Now we have this concept at three clubs, two in Norway, one in Sweden. We also made a light version, a more cost efficient version at CC Vest here in Norway. The next club out is in Bergen at the Lars Hilles gate, which will open later this year. One thing is the classes, but we also know that the atmosphere you work out in is extremely important for the total experience. We have talked to the members, and they say that they prefer to work out in a darker environment, especially when doing group training classes, because they don't want to feel that they are on display when they are doing their Zumba classes or whatever it is.
They want to focus on their training and do their thing. We also want everyone to feel at home in our group training studios. What we did was to change the design from bright and light pink colors, a quite feminine look, I would say, and we also had big windows out to the fitness floor. We made the room darker, and dark blue, black, more LED lights, and limited the insight from the fitness floor. Here you see an example of a new room, and those of you that are here in Colosseum will also get to see this new design on the club tour afterwards. Another trend that we are seeing is that more and more people want to work out on the fitness floor and do strength training.
To meet this trend, we have created classes where we actually merge group training and strength training on fitness floor. This is also a way to better utilize the space that we have on the fitness floor for different purposes. Our performance concept is exactly this. We have five different classes that we conduct on fitness floor. Personal trainers are instructors, and these are tough classes. This is heavy strength training or CrossFit inspired workouts with tight follow-up and guiding from the PT. I also recommend you all to try this class. It's very cool. That brings me over to another big project that we have, our fitness floor. The biggest part of our clubs are used for fitness floor, and we have a big equipment park.
Therefore, optimizing the spacing and the range of our equipment is extremely important to us, both to secure an efficient utilization of the square meters that we have and to secure a best possible member experience. We are continuously monitoring our equipment usage with sensors in our biggest clubs, and we gather feedback from members regarding the range and availability of equipment. Based on this, we work on an updated standardized equipment list and a standard spacing of the fitness floor. We also do a lot of work on continuously optimizing our clubs, improving the layout and the equipment mix. Just to give you an example of this, quite a lot of our clubs in Oslo were perceived as full with a quite high pressure on fitness floor and a lot of members during peak time.
To make sure that we got more members in and also improve their experience of working out in these clubs, we looked into the layout and the equipment mix at these clubs. What we did was to take some equipment that we saw were not utilized as much out from the clubs. We added equipment that we knew based on data were highly utilized, and we also changed the overall spacing to get more equipment into the club. For example, at SATS Storo, we increased the number of workstations with 15% without adding any more space, and the result was a higher number of visits and happier members. As Sondre mentioned, the cluster effects and the cluster strategy is also really important to us.
We know that most of our members have access to more than one club in their membership, and most members work out at two or three different clubs. This enables us to give our members a broader and better product offering across the clubs in our clusters, with a slightly different offering in each, club. An example of this is, SATS Bislett and SATS Fagerborg, two clubs that are located only a few hundred meters from, each other. Bislett is a strong group training club, with a lot of GX members, but also a lot of pressure on the fitness floor, while Fagerborg is a important fitness floor and strength training club.
What we did was to add more fitness floor capacity on Fagerborg, taking away some of the GX group training, and then we took away a lot of the pressure on Bislett and improved the total offering in the cluster. Again, more visits and happier members. Over to personal training. I think a lot of members, including myself, find it hard to motivate themselves to do their training and need someone to coach them, to push them, to give them the best workouts to reach their goals and to follow up their progress. With a PT product, you can either work out alone with a PT, which is our biggest PT product, but you can also work together with another person, a PT duo, or in a small group.
We also offer PT boot camps, where you train in a group, over a 10-week period, for example, if you want to reach a specific goal as losing weight. To make everyone that signs up at SATS familiar with the PT product, we also have a PT start. We give away one free PT session to all new members. PT is a big part of our business. It's driving quite a lot of added revenue and, contributing with 15% of our total revenues and with, very strong margins. Now we have more than 1,200 PTs in our system, all fully employed by SATS. The main challenge right now is to get as many PTs that we want, to serve all our members. That is limiting our growth, some on PT right now.
We see a small shift now, it is improving, and we are doing heavy efforts to both keep our PTs and to get new PTs into our system. Two other important areas for driving additional revenue and two areas where we have seen strong growth over the last years is retail and treatments. We have a comprehensive retail offering. As I guess you have all seen that are here today also, we have a big shop outside in the reception. We continuously work to optimize and develop this offering further. By expanding our SATS branded product portfolio within both accessories, nutrition, we have our own SATS nutrition range and also the SATS clothes collection. We have improved sales and also margins.
In addition on retail, we work with top quality brands within both nutrition and apparel to give our members a great and inspiring retail offering. During the pandemic, we also increased and expanded our treatments offering physiotherapy and sports massage to our members. Now we have more than 30 therapists in Norway and Sweden to make sure that our members stay active and don't fall out of their training when they get injured. This is an offering we're also going to build and expand going forward. Now we have talked a lot about our physical product offering, but we also believe in the hybrid training model. That people want the flexibility to work out whenever they want and wherever they want.
Whether it is physical at the SATS club or at home if you don't have the time or opportunity to go to a club. Last year, we stepped up our digital training offering by launching SATS Mentra to take home training to a completely new level. SATS Mentra is both a great, digital offering to all our SATS members, but also a standalone product, reaching a broader target group, than only our SATS members and our current footprint. Now we have more than 800 different classes in the SATS Mentra app within 10 categories. We have teamed up with big profiles such as Funkygine and Martin Johnsrud Sundby. We have some of the best instructors also from outside the Nordics.
We went to London and hand-picked instructors from the biggest boutique gyms to create content for us. You see it's easy functionality, easy to find the classes that you want to do. You can have challenges, training programs, follow your progress, et cetera. It's a great app that I really encourage you all to take a look at and test. We also do live classes actually in the app, which is very cool. This product is not only appealing to the private market, but we also have a great share of corporate members. Now we have more than 10,000 active members at SATS Mentra.
The focus going forward on SATS Mentra will be on increasing the usage of the digital product and tightening it even closer to the SATS brand and our overall SATS product. That was everything from me. Now I give the word to Gaute.
Thank you. My name is Gaute Sandal, and I'm leading what you could call an extended technology department called Consumer Insight and Technology. You could argue that SATS has developed from being a brick-and-mortar company with physical clubs only. Don't get me wrong, the physical clubs are the core of the offering. That's where we have all the products and services that Silje talked through, and that's where our members primarily work out. The technology we put on top changes us from being only the physical clubs to something more. That's what I'm going to talk about today, mostly about the technology side and the data side. It's really twofold. The development we do on technology is, of course, for our operations.
We are a large operator gaining scale, and the synergies we get from that scale is both on the cost side, the classical cost side on IT costs, OpEx and CapEx, software, hardware, licenses, et cetera, but also for our operations. We have the ability and the ambition also to develop and deliver good self-service tools for our staff at the clubs so that they can focus on the members that are there and not spend time on administration and.
Sorry, can you repeat that?
Sorry. Doing internal administration work. More importantly, where we spend the majority of our time, is the technology development we do for our members. As Sondre Gravir talked about earlier, it's not something we do for fun. It is fun as well, but technology and the way we use a significant amount of data that we have, the only focus we have is on increasing activity for our members. Active members don't quit. Passive members do, and the ratio is 1 to 7. There's a seven times higher probability for a passive member to churn than an active member. That's really the key focus. I'll talk a bit through that now and what we do. We think about it in four steps. One, how can we use technology to inspire to work out?
How can you use technology to plan your workout, to actually carry out the workout? Lastly, and that's important, to make that into a habit that continues over time. Now I'll go through each of the four steps, what we currently are working on and our ambitions going forward. We have the best fitness app in the Nordics. It's on the top of every app store lists, high rated, and the starting point for our members. We have on our web, closely developed together with our product team and our marketing team, a significant library of resources to get inspiration, find inspiration for any kind of activity that you want to do. That's for sure. Then on the right-hand side, there's a small example. In the member app, you connect with your friends that are also SATS members.
You can see what they do. In the start screen, you can see what your friends have planned to work out in the near future and find inspiration from that and also join that class. It has two effects. Of course, you can find new inspiration, but it also creates that commitment. Commitment is important when you're working out. To work out, your friends get notified that you joined and also get notified if you cancel said class. So far this year, more than 70,000 members have used that functionality alone. It's just displaying the data that we have with the consent from the members. It's fairly easy. Going on to planning the workouts, our app is also important here.
The classical book group training, which is fairly standard functionality. You can see all 10,000 group training classes going on this week in the app independently of whether we have access to them or not. We can get inspired from that. You see the available spots, which instructor that are there, and it adds to your calendar. Again, to get that commitment into your daily schedule. The same with PT booking. As Silje told, our PTs are fully employed, so their schedule is open and accessible in the app. Both if you have purchased PT clips or not yet, you can see the availability and try that out. When you book the class, you can invite your friends and work out together very easily.
We also use our app to display how the club capacity is at the moment. Which clubs are close to me, where I am right now, with the traffic lights saying if it's full or not. You can also, going into each club, see what is the prediction of the capacity at the club right now and going forward. Again, this is just using the check-in data that we have in the system, and it's fairly easy to do. But it has a great value to our members that they can see and plan their workouts. Some prefer to work out in a gym where there's much capacity. Others prefer to work out where there's crowded gyms to get the atmosphere and meet their friends. We have more than 320,000 weekly users of our app. That's a significant number.
As an example as well, on group training alone, over 225,000 bookings so far on weekly, which is big. Planning the workouts, our app is the companion to do that. Then getting into the gym, our app is still important. Our member card is in the app. That's the QR code that you have to access the club. Which again, makes this into an app that you just don't have in the phone, rarely used, but it's something that is active part of the membership and your relation to SATS. You can find at your fingertips easily training programs in the app. The area where we spend most time is on the last part. How can we use technology to improve or keep your good habits?
Some examples there. We mentioned group training earlier. We typically have a lot of waiting lists on our group training classes. It's popular, but at the same time, we don't have that many classes that are full. There's often free capacity. Using algorithms from the visit data that we have, we can predict whether a class is going to be full or not. We show that to the member saying, "Well, it's a pretty good chance you can get a spot even though there's 30 people before you on the waiting list." That small functionality, which is only a digital feature, actually gives 3,000 extra group training visits every month compared to before we launched it. Habits are important.
This is going to be live in a few days, so when you have conducted a group training class, you get reminded to book the same class again next week, with a push from the app. Again, increasing those habits, getting it into the calendar, maybe the family calendar as well, so that the time is booked for you, so to work out. We launched our loyalty program in August last year, SATS Rewards, where you increase in levels, silver, gold, platinum, based on either the duration of the membership and/or how often you work out. So you can extend the levels if you work out often. A few perks on every level that you can redeem.
What we see now, a year after launching it, is that the churn rate of those that are impacted by the program versus before we launched the program is significant. We see real significant lower churn among members now than before. In the back end and how we use the data that we have towards our members, some examples on the initiatives we have. We are building machine learning models, AI for example, churn prediction, measuring more than 400 different features of visit behavior among our members to predict churn. All you and every member in the company, we have a probability from 0 to 100 whether or not you are going to terminate a membership in four weeks, because we probably know that better than you.
Because of the data that we have from all existing members and all previous members, anonymized, we understand patterns of how people work out and what typically are the trigger points that could lead you into a quitting us. That's one kind of model that we developed, and more importantly, maybe the step before, how can we predict members turning into passive members, as several of us have talked about? On that note, we segment all our members every day on activity level, from more active to less active. When we use that to segment and trigger communication differently by segment, we see real results. We typically see 10%-15% higher activity when we use those segments to tailor messages and tailor communication and push versus a control group.
I would also like to mention a bit on our privacy policies, GDPR compliance, when exiting as a member. We, of course, are fully GDPR compliant. When you quit in SATS and resign your membership, we keep your data for six months, and then we keep the data but anonymize it, so there's no person attached to it anymore. We also have an opportunity for the member when resigning to keep his or her data and access to the app, which is great for the person. Many people use the app as a training diary as well, so they can access their previous training. They can still see their friends and what they do, and hopefully get inspired to come back.
It's good for them, but it's also of course good for us because we can continue to reach out to these people to try to get them back to SATS, and they often do. Then they can continue their membership as before with all the data that they had. On the same note of resigning, I think we have the best hold-back strategy implemented in our industry. When you wish to resign, it's easy to do that online. Coming out of the pandemic, we took a big leap forward on how that process works. You get notified of your rewards level. Are you sure you want to quit? We have all these perks, and you will lose the gold label on the SATS app if you quit now and rejoin later.
You are getting some incentives to stay. We can easily change those campaigns from week to week. As I mentioned, lastly, do you want to keep your training history or not? You can choose that. If you still choose to quit, you are typically called by one of our telemarketing people in a few hours. What we see from this after launching it is that we are able to keep 20% of those that initially pushed the button, I want to quit. Most of them just want a break for a month or so and then come back. What we see is that they are active when they're coming back. Not just passive members, but they are active when they're coming back. Lastly, a bit on our organizational competence.
We have a full in-house tech team, full stack from front end, back end. We have designers, product managers, and of course, our analytics team as well. It was outsourced before, but now it's inside our offices in Nydalen. Good diversity, very good employer interest ratings, and very high retention. There's a very competent team, a very enthusiastic team. And then circling back to where I started, to build that technology on top of the clubs that we have. To be able to keep our members more active. That's the most important thing that we do. It, of course, has financial and commercial value. That's for sure. But most importantly, maybe fulfilling our vision to make people healthier and happier. Thank you. That's me, and then Wenche will talk a bit.
Thank you, Gaute. My name is Wenche Evertsen, and I'm the Country Manager for SATS in Norway. There it is. We are not like any other fitness chain. When you enter one of our clubs, you will be greeted by a smile by one of our fantastic employees that we handpick, train, and coach every day to inspire and serve our members. Every day, we strive to create a joyful and welcoming atmosphere where you feel motivated and inspired to work out, where you feel that you are part of a SATS community that you want to come back to again and again.
Our hard labor is paying off, as you saw earlier, with an NPS score of 58, which is probably the best in the industry. Anyhow is considered excellent in any industry. To achieve this, we work systematically through within the framework of our common Nordic operating model to deliver on a constantly high level, as you can see in this picture, because operations is where strategy comes alive. One company has been one of the fundamentals of our strategy for years. How we operate our clubs is part of this platform. We have one common Nordic operating model with one culture built on our values.
It has been continuously developed based on best practice over the last 27 years, and is based on proven set of staffing principles for creating great members, member experiences and great results. At the core of our model is the principle that club management happens on the floor, not in an office, interacting with members and staff in securing sales and ensuring that the club is clean, maintained, and tidy. To give you an example or a few examples, to secure sales and give service in the reception, all club managers schedule themselves in the reception every week in prime time to work alongside their employees, leading by example. Our model is comprehensive, covering all areas of operations and where the devil is in the details, as with any other operating business.
For instance, to ensure a clean and tidy club, for all the clubs across the countries, we have the exact same routines and checklists down to the smallest detail. It's complete. All the routines are completed at a set interval and is calibrated, based on visits and also hour by hour every day. Furthermore, health and safety is crucial at the club, and therefore, every SATS club is equipped with a defibrillator, and all of our employees, they complete mandatory CPR training on a regular basis, to secure this vital competence, on every shift, during the opening hours.
Last but not least, as Gaute talked about, we are also dependent on great tool systems and processes from central functions that can help us so that we can free up time to work with sales and service. For instance, by digitizing task management, handbooks, and club audits, to name a few, so that we can focus on what we are set to do and what we are best at doing, serving our members. To sum up, the SATS operating model enables scalability of our business through optimized staffing, tight cost control, and efficient implementations. Even more important, it enables a professional and accountable way of working in an inspiring and joyful environment that attracts both members and employees. That's why we're not like any other fitness chain in the Nordics.
Now, so that you can see for yourselves, I'd like to invite everyone here in the room for a club tour with the club manager, Rune, here in the back at SATS Colosseum. Thank you.
Okay, we start again. I hope you enjoyed your club tour. My name is Marianne Orderud and I'm leading the member care, communication, and marketing at SATS. Four and a half years ago, we initiated a huge turnaround of our brand across the four markets in the Nordics. We conducted research from over 4,500 respondents to find the true drivers in this industry for why people choose a gym. What we found from that survey was the most actually emotional. It's connected to feeling welcomed, a part of a community, an atmosphere, and about being inspired and experience joy. Secondly, and importantly, we also found out that these drivers are similar across all four Nordic countries that we are present. Meaning that SATS should have one brand strategy and one way of positioning our brand across all our markets.
As you can see, we have gone from a pretty messy tone of voice to a very distinguished and strong one. Internally, we also started to work with our new position, the inspirator, from the bottom up in the organization, something that we also continuously work with. We wanted to challenge the industry and position SATS in a new and inspiring way based on insights. In this industry, the marketing we see from different players were more or less similar, focusing on well-trained people who just finished that workout, wiping their sweat off and being happy. We also saw a typical tactical and rational-driven marketing approach, with discounting the memberships, as the main communication. To do tactical campaigning is important also for SATS, but that alone will not build a price premium brand.
We wanted to raise the bar and bring a refreshing, new and more emotional way of promoting fitness to the table, focusing more on how training affects your life also when you're not training. Some part of this industry is also influenced by trends that is not really that healthy, because it's not really about the physical appearance, right? To work out at the gym is for everyone at any age and with any background, and that we are offering. What we are offering basically helps you with any challenge you may have. We have the tools to make it work for our members, because to work out on a regular basis, let's be honest, it's hard for most of us. The truth is, with regular activity, your body will work better and your brain will function better.
When talking like this, fitness becomes a little less scary, more likable, and SATS become more attractive to more people in the market. I also wanna use some time talking about social media. Four years ago, on Instagram Norway, we had 3,000 followers on that channel, and it didn't really give us much. Today, on that same channel, we have 40,000 followers, and in total, we have 450,000 followers across all platforms, and we are present at Facebook, Instagram, TikTok, LinkedIn and YouTube. As one example, we reached almost 7 million people in organic, non-paid, that means, reach in September now. Social media is very powerful, and it's a very important channel because here we can create awareness, engage with our audience, be more personal, sharing both member stories and the expertise of our staff, and showing our clubs.
The channel is also a very efficient sales machine. Actually, today we have 45% more digital sales than we had four years ago. As you can see on this chart, we do well, not only compared to other brands in the industry, but we are also way above benchmark levels across any global brand categories. Brand tracking tools allow companies to measure important metrics and helps us understand the efficiency, both on individual campaigns and the overall brand presence. Every month, we ask the Nordic population several questions about SATS and our main competitors. We have very high brand awareness, and that is important, but we also need people that know about us to choose us, when we ask what gym they consider to join.
These numbers show increased consideration levels in all capital cities first six months of 2022 compared to same period last year. Why is all of this important? Why use the resources of common tone of voice, a strong brand foundation, and fancy posters? Why can't we just do tactical campaigns? Well, because as you have heard several times today, SATS is not a regular gym, and we wanna do better. Having a strong brand is all about having a consistent and recognizable company expression to offer not only product and services, but also meaning. When doing that, we will create awareness, interest, consideration, and we will get more members. It's all about working smart and efficient across all parts of the sales funnel. The job is not done when we convert a new member, then the actual work starts.
As Gaute was showing you on our digital services and app, Silje showed you on the product part, and Wenche also talked of the operational part. An active member that uses our product will be a happy and loyal member that stays with us. We work continuously across all parts of the member life cycle to communicate, nudge and activate the members. This, of course, happens physically at our gyms with our staff, products and services, but also to a bigger and bigger extent digitally and one-to-one communication. Because if you're a member of SATS, we know a lot about you and your habits, and we want to use those insights to personalize your experience and be relevant to you and motivate you. It's actually all about getting the right message in the right channel to the right member at the right time.
With 700,000 members and a unique and broad product offering, the SATS experience can be very different from one member to another. We have systems and the capabilities, and we are working with several automated digital journeys towards our member base. Meaning that how the member acts and what they do when triggers what kind of information they get from us. We simply become more relevant. Before I end my part of this presentation, I would like to show you two examples of our communication concepts. At SATS, we call it Included, where we, in a more emotional way, are showing the range of our product offering. We have 10 of these movies. We will look at them all today. No, I'm just kidding. We will look at two of them today, and it's two of my favorites.
SATS report finding number 4. It's statistically proven that runners perform better when they think others are watching. That's why we've made it fun to run together. SATS report finding number 2. 20% of those who try cycling hate cycling. That's why we also have hundreds of other classes to choose from.
Thank you very much. I'm looking forward to seeing the afterglow of this group after we will work out together. Now we're, like, hyping up and, you know, music and pumping and young people. I just wanna say that don't be afraid to join the class because it's for everyone. If you haven't done group training before, this will be the perfect chance to do it because we will take care of you and have fun. I don't wanna scare you with, like, pumping music and young people and, yeah, because, yeah. With that, I leave the word over to our CFO, Cecilie.
Thank you, Marianne. Yes, my name is Cecilie Elde. I am CFO of SATS, leading the finance and business development team. We came out of 2019 with a solid financial platform, showing steady improvement in profitability, continuing in the positive trend from recent years with a robust top-line growth and a solid 15% annual improvement in profitability. The growth in profitability was done through multiple levers on a scalable business model. The member base grew with 4% annually from 2016 to 2019, and that was on a relatively stable club portfolio, improving number of members per club. We had a 6% annual growth in revenues, where yield improvements further strengthened volume revenue growth, both in terms of raised membership prices, but also a significant increase in other revenues like personal training and retail.
Improved cost efficiency by standardizing and improving the operating model further enhanced the results and margins. Focus has been to improve profitability by fully utilizing the operating leverage in our business model, increasing number of members per club without adding cost to drive margin expansion. With a well-invested portfolio of clubs and the low rollout pace on new clubs in the period, we have historically shown a strong cash generation capability and stable cash conversion resulted in a solid deleveraging profile, which also has given room for investing in further growth. Our long-term strategy has remained relatively unchanged during the past years, but meeting different phases and challenges, we have recognized the need to adapt to our environment and respond quickly.
In the years before the pandemic, as said, we had a solid track record of improving top line and profit, and we went through a complete brand turnaround and became a listed company in October 2019. Then came COVID, and we needed to change focus, handle the crisis, and ensure that we were well-positioned for accelerated growth once we were able to operate as usual again. Not only by limiting the adverse effect of by reducing cash burn and doing fast cost reductions, but executing a complete turnaround. Equally important, we wanted to make sure that we took advantage of the rising opportunities to get ahead. Post-COVID, the focus has been on member recovery and growth, and we, as everyone else, are facing new challenges, forcing yet another adjustment in our short-term plans.
Because as everyone else, financially, we are hit hard by the macroeconomic conditions that we've seen throughout this year, with soaring inflation and energy prices. Unfortunately, our starting point is still weakened by the severe setback COVID-19 had on our business. The member base is recovered, but with lower members per club due to 36 new clubs adding costs. We've seen a positive yield development and growth in other revenues, but fewer PTs limit further expansion at the moment. We are now more efficient in staffing our clubs, but wages are expected to increase. Inflation hits all of our input factors, especially rent costs, which is a third of our cost base, and not to mention energy prices, which potentially have a significant impact on our bottom line. Still, the fundamentals of our business model and financial characteristics remain.
Training habits are relatively unchanged, and we have historically shown an excellent performance track record with well-proven pillars for further financial performance. We have a strong market position and a subscription-based model giving high visibility on revenues, continued volume growth across the portfolio and significant yield improvement, efficient club operations with high drop through of growing in existing clubs and other revenue. Under normal conditions, a strong cash generating capabilities which give us flexibility to reinvest in future growth. With several defensive features enabled by our scale, we have a strong competitive position. We have a strong network of clubs unmatched by any competitor in our key city clusters, which is a position that will be hard to copy.
Given that we've been around for more than 27 years, we have secured top locations, and with a strong position, we are the most credible and preferred partner for real estate owners. Our clubs are well invested in top quality equipment, leveraging our size to negotiate favorable prices compared to standalone clubs, and we can distribute our product offering in a cost-efficient way through complementary club scheduling on clubs within a cluster. We develop branding content and marketing materials for all countries centrally, and we have centralized supporting functions like IT, finance, and HR, which gives further scale advantages. We are a very well-known brand in our markets and an attractive employer, so we also get talent fairly easy. Our cash generation profile has enabled us to invest in CRM, digital market capabilities, and other drivers of growth.
As mentioned in the beginning, the last couple of years have been challenging, and while our long-term strategy has remained fairly unchanged, we have recognized the need to adapt to our environment. During the COVID crisis, we consciously decided to invest heavily in growth, opening many new clubs and starting a new business venture in SATS Mentra. We were betting on the underlying premise that our external environment and people habits would quickly revert to normal, leaving us well-positioned for accelerated growth. Market recovery has been somewhat slower than expected after COVID. A bigger part of the Nordic population is passive now than before COVID. In this environment, we have been aggressive in sales and marketing, and we have recovered well.
Knowing what we know today about the slower market recovery, capacity development in our industry, and the macroeconomic development, we would probably have been somewhat less aggressive on growth and not adding too much new capacity to the market. Long term, we believe our growth agenda has been right, but it challenges our financial delivery in the short and medium term. As a consequence, we have divided our value creation agenda into two phases, short-term actions to regain profitability, focusing on growing members and revenue per club, and taking forceful steps to take down costs. Long term, we will continue to expand, both in terms of club footprint in existing and new markets and taking and tapping into new revenue streams close to the core.
In the following, I will take you to a trading update, more concretely on levers we are working on to improve profitability and what we believe is the EBITDA capacity in the existing portfolio. We have accelerated club rollout over the last couple of years and have, since the beginning of 2020, opened 36 new clubs. We have further signed 13 new clubs opening over the next year, which gives us a sufficiently strong pipeline for growth in the medium term, limiting the need for adding capacity. Over the last year, growth in the member base of 8% comes from both acquired and maturing clubs, but more importantly, a strong recovery in like-for-like clubs. Compared to the last quarter, the deviation in members per club has reduced from lacking 200 members to 80.
Actually, as we've talked about before, the member base of 708,000 members is an all-time high in our SATS history and is a result of positive development in both sales and churn, especially over the recent months. Strong sales come at a cost, and we have invested more than usual both in promotions and campaigns which temporarily improve as it affects our yield negatively. Knowing that the market is not entirely back, as the Nordic people is not yet fully back to an as active lifestyle as they had before COVID, our priority has been to sacrifice short-term profitability to ensure that we gain market share in terms of members to secure a solid run rate out of 2022. Looking at the by country development, the picture is pretty much the same.
Norway, Finland, and Denmark are recovering well, now showing equal or more members per like-for-like club than in 2019. In Stockholm, being the main part of the Swedish operations, the market capacity in terms of number of clubs has increased by 69% since 2015, and that is causing some delay in recovery compared to the other countries. Fresh Fitness, our low-cost brand operating in Norway, is lagging somewhat compared to SATS, but has shown steady improvement over the last quarters. The growth has not come at the cost of lower prices, despite heavy campaigning throughout the last couple of years. We have been able to increase the underlying membership yield through our pricing strategy. Going forward, price optimization is critical for counteracting inflation.
Our annual price optimization process to increase membership yields has historically proven very successful, and we are constantly working on optimizing price levels in the member base to ensure fairness, and that all members pay the same price for the same membership and access rights. There are three main levers utilized that we utilize to increase prices. We do an annual inflation adjustment for existing members. We do price adjustments for new members coming in, applying price differentiation to allow for lower prices at clubs with much capacity and higher prices at fuller clubs. In addition, we proactively lift prices for member that for some historic reason have a membership price far below the current list price. Over several years, we have experienced that there is significant resilience to such price adjustments.
Concretely, we see that the annual adjustment that we did in January and the additional price increase we did in July reconfirm the expectation of very low incremental churn. On top of that, the positive benefit of lifting prices in the membership is the membership mix effect, as new members are coming in at higher prices than average, which further drives price progression. Constantly raising the prices has resulted in a 7% increase over the last three years. To support our focus on increasing members per club, we, as all other operators in our industry, have invested significantly more than usual in special offers to drive membership sales. Giving away free months at the beginning of the period impacts reported yield, as can be seen on the left.
As memberships are mainly sold with 12-month binding periods following the campaign period, the contractual price and the long-term profitability remains intact. Adjusting for campaign effects and somewhat inflated freeze remaining after COVID, the yield shows an increase of 7%, which corresponds to the increase in the contractual price members are signing up for, as can be seen on the right-hand side graph. Our pricing strategy has resulted in a solid development in contractual membership price pre- and post-COVID. Due to restrictions on group training and club capacity during the pandemic, we saw a flat development during this period. Over the last 12 months, membership prices have increased by 2.7% after price adjustments on new and existing members and will be increased further on January first in line with relevant inflation levels.
The yield improvements can be seen in revenues in the third quarter, contributing to NOK 50 million in the third quarter compared to 2019. The member base is now surpassing 2019 level, which improves revenues by an additional NOK 25 million. As mentioned, we see some negative impacts due to the campaign and from previous quarters and current quarter, and that will continue to impact the revenue slightly also going forward. More importantly, the annual run rate improvement in revenues of growing 36,000 members in this quarter has a run rate effect of NOK 200 million. That is due to our operating leverage. Because our subscription-based model offers good visibility of revenues, profits, and cash flow, and strong operating leverage and drop-through of incremental revenues means that our EBITDA grows faster than revenue.
Around 85% of the cost base required to operate our current club portfolio is more or less fixed, meaning that incremental revenues have a 90% drop-through to EBITDA for the existing clubs. As long as there is free capacity in the clubs, members can be added without adding cost. There is still excess capacity in most of our clubs. I will get back to later more on how we have several levers to increase capacity, both in product offering, scheduling, and club layout. Even other revenues like personal training and retail have a margin of around 35%, which gives high drop-through to EBITDA as well. Increase in staffing cost, club salaries over the last couple of years is primarily driven by additional clubs. Like for like, we've had a modest increase of 1.1% annually.
Our club operating model is efficient and flexible with clear routines and optimized staffing fully linked to visits. As can be seen on the right, cost per visit has remained stable over the last five years as improved efficiency has counteracted increases in wages. Club staffing is typically 20% lower in July than in January, and there is up to 80% variation between the different club sizes in terms of visits. There is still potential to improve efficiency further by fine-tuning the staffing model, optimizing group training scheduling, and implementing self-service tools for staff and members. The increase in overhead costs over the past years is driven by a step up in digital ambition and launch of SATS Mentra. In addition, the organization has been scaled to reflect our strong ambition for both member and club expansion.
Despite being on track for recovery, macroeconomic conditions add pressure to our margins. As a consequence, we will take forceful steps to improve profitability to utilize scale, and overhead cost will be taken down to reflect the current member base and short-term focus. Cost reductions in several areas will be implemented, aiming for overhead costs as % of revenues returning to 2019 level in the medium term. We have seen a significant increase in energy costs over the last couple of months. Even though outlook for prices has come somewhat down, we do expect and are preparing for significantly higher costs. Over the years, we've run several projects to identify the source of energy efficiencies and remedy these. Despite adding many new clubs, consumption has been relatively stable compared to 2019.
Several actions are taken to reduce consumption at the clubs, which we expect to yield a reduction of 10%-20% in the short term. This includes temporary shutdown of saunas in most of our clubs, which alone reduces consumption by 10%. Ventilation is one of the highest energy consumers at SATS, therefore reducing the energy consumption has been ongoing work for many years, and new clubs are built with demand control ventilation. Now we're working on making further adjustments to reduce both airflow and temperature and smarter consumption during nighttime. Rent makes up around a third of our cost base and is mainly fixed, and the annual rent increases are based on consumer price indexes.
Increase in property cost over the last couple of years has primarily been driven by additional clubs, and like for like, we have an increase of 2.2% annually. The current inflationary environment result in a substantial increase in rent costs for 2023, as increases are based on October CPIs, currently expected at around 6%-10%, although varying across the different markets. Negotiations with the landlords have started with the aim of partially counteracting the historically high CPI adjustment for next year. With rent being one of the most significant cost components, maximizing revenue per square meter is key to overall profitability. Our club portfolio ranges from smaller clubs at 1,500 members per square meter, also 1,500 square meters, to large clubs up to 5,000 square meters.
For our smallest clubs, the unique selling point is club quality and premium location. While our largest clubs often have destination products that members are willing to travel to get. New clubs are often small and space efficient, both as a result of our experience with club optimization, as well as being very few available premises in central areas with space to fit a large club. On the right are some example of our top performing clubs within each size category. While the width of our product offering differs, members are willing to pay a premium to work at a SATS club of different sizes due to our quality on all parameters, equipment, layout, look and feel, and product offering. In the following, I will take you through how we work continuously to improve club economics to increase profitability per square meter.
Because looking at our like-for-like portfolio, the member per club is recovering nicely towards the pre-pandemic level of 2,008-2,900 members. We do see further upside. We see potential in growing beyond that. Our clubs have capacity to accommodate for even more members than they had before the pandemic. There are several routes to increasing number of members per club, both through tuning product offering to make them more attractive to members, as well as optimizing the club to utilize space as efficiently as possible. Given our operating leverage, adding more members to existing clubs with light investments has a significant impact on our overall cash generation.
On average, our clubs have 1.4 members per sq m, which compared to our top performing clubs at 2.4-3.2 from the previous page, gives comfort that we are able to fill our clubs, yielding substantial EBITDA improvements. As Silje Ree talked about, we continuously work with our clusters and product offering to make it more attractive for members to choose us. Strong clusters are important for yield as members with regional access and group training included pay NOK 100-NOK 200 more per month. Additionally, members with access to group training are more loyal than those without, adding to the financial impact of having a broad and effective offer with within our clusters.
It enables us also to operate more efficiently as we can coordinate group training scheduling within clusters to optimize space utilization and optimize the offering available to members. For clubs that are old and outdated or acquired clubs not built in line with our concepts, we do minor or major upgrades to improve club quality and offering. We also work strategically to identify relocation opportunities for clubs that have the right location, but unsuited premises. Having the right club quality and product offering is essential in differentiating us from the low-cost players and being able to realize a higher yield. In terms of major upgrades, we often see that relocating a club into a brand-new premises rather than doing a full refurbishment of an old club might be less CapEx intensive with even better results.
There is a large spread in how crowded our clubs are, which we track by measuring fitness floor visits per square meter in peak time per club. Very detailed measuring. For our fullest clubs, strength and cardio equipment is a hurdle for further growth. Through the optimization framework Silje explained earlier, we can facilitate more visits in peaks, which means we can accommodate even more members at these clubs. As an example, the optimization project performed in 2019 resulted in freeing up 7,000 square meters, equivalent to a fitness floor at eight clubs. Being able to add even more members to our more popular clubs is financially essential, as we can do it with low risk and very low investment. For most of our clubs, the member potential in the area where the club is located is sufficient to fill the available capacity.
A handful of our clubs, there is too much space relative to the member potential, or the space available is challenging to utilize for training purposes. Downsizing these clubs, either by removing space or relocating to more efficient premises, is key to profitability per square meter. We've done this with five clubs with fantastic results. While removing 35% of the space, we managed to increase the member base by 30%, and that is a significant improvement in club economics. Going forward, we will continue to do downsize projects. Some are already planned, while others are in the pipeline. To summarize, looking at our like-for-like portfolio, visits in August were on a level with visits of August 2019. For the upgraded, optimized, downsized, and relocated clubs, there is a significant increase in visits.
Working strategically with the portfolio to identify the clubs and clusters where the different optimization measures have the highest expected effect will be key priority both in the short and the long term to continuously improve club economics and thus overall profitability and cash generation. In a normal situation, it takes a new club around 24-36 months to reach a mature member base, depending on the club's size. The clubs that we opened before and in the middle of the pandemic got a slow start, and they will take longer for those clubs to reach mature member base. We see that they are developing according to the initial business cases, but with some delay due to several closures during the pandemic.
In the period 2020 to 2022, we've opened 18 greenfields, and during the last 12 months, these clubs have contributed to a drag on EBITDA of NOK 20 million. When fully mature, these clubs are expected to contribute with a total club EBITDA of NOK 85 million, with another NOK 65 million in mature contribution from the 13 clubs currently in the pipeline for opening over the next year. Due to the uncertainty of the macroeconomic situation, further club expansion beyond that, both new greenfield rollout and M&A has been paused. We still believe that there is a long-term potential, both in our home markets and on the European continent. In the home markets, there are still white spots within major cities, as well as a few large clusters for potential entry.
The European market, on the other hand, is highly fragmented, especially in the full-service segment, with significant consolidation potential. In the medium term, further growth beyond already signed greenfields will be limited and purely opportunistic. Our clubs are well invested and with significant club maintenance and upgrade investment levels in the recent years. Maintenance CapEx was lower during the pandemic due to a focus on cash preservation and less wear and tear on the equipment, but will return to historical levels of CapEx maintenance in 2023 and onwards at around 5% of revenue. Maintaining a stronghold in the Nordic capital cities, continuously upgrading our existing clubs, and expanding the portfolio through filling white spots in increasing microcluster capacity is still important. We have prioritized to invest for the long term, both in technology team systems and infrastructure, as well as club expansion.
A few points on the working capital. SATS benefits from structurally negative working capital driven by membership prepayments, and it's following the seasonality of our business. Year to date in 2022, net working capital is negatively affected by COVID-related deferrals from previous years, in total amounting to NOK 180 million, and these are member deferrals from periods with closed clubs and high levels of freezes, postponed payment of taxes and social fees, less prepaid memberships, and revenue due to heavy campaigning in peak months. In addition, inve sting in SATS Mentra, the hardware negatively impacts working capital. Now that the extraordinary COVID impact is cleared, net working capital is expected to normalize to around 15% of revenues. This affects cash. Cash development year to date is affected by the NOK 180 million COVID effect on net working capital.
For 2022 overall, with adjusted EBITDA per club recovering to pre-COVID levels, and with significant growth in number of clubs through greenfields and acquisitions, free cash flow will be negative. Overall liquidity, including the undrawn liquidity under the RCF, is sufficient to handle the current operations, even in a more challenging macroeconomic environment that we are currently experiencing. Historically, we have shown strong cash generation capabilities and stable cash conversion, resulting in a solid deleveraging profile. The COVID-19 period resulted in significant losses financed by an increase in debt. In the short term, investments in club expansion will be limited, prioritizing to reduce debt to responsible levels. An addendum to the rolling credit facility was signed earlier this year, extending the facility by one year until September 2025, and included adjusted temporary covenants, which will apply until the end of 2023.
The adjustment covenant set out is quarterly minimum levels for liquidity and adjusted EBITDA, which will come into force from the first quarter of next year. Note that 2022 results will not constitute any part of the measured adjusted EBITDA covenant. Moving to financial outlook and, more specifically our capital allocation principles, they are divided into two periods, short term and long term, where we, in the short term, will pause further expansion and prioritize to reduce debt. We will still continue to invest in our existing club portfolio and digital platform in line with the historical average of revenues at around 5%. In the longer term, we expect to pick up the expansion pace to around 8-12 clubs per year, depending on the attractiveness of acquisition targets and greenfield locations.
As is the case for many industries, the current macroeconomic environment creates uncertainty, and several external factors will impact the pace of our profitability and recovery going forward. We are confident that we have the ability to regain our profitability to pre-COVID levels. The time to reach recovery is highly dependent on inflationary pressure and energy prices, as well as the potential effect consumer sentiment has on member development and ARPM growth. The financial outlooks assume that inflation and energy prices over time will normalize at lower levels than in the last quarter. Because based on this assumption, the current club portfolio has an adjusted EBITDA capacity of around NOK 800 million by bringing members per club back to 2019 level, both for like-for-like clubs and new clubs currently open and signed.
This is before adding new capacity or assuming higher utilization in existing clubs. Note I said that after the strong delivery of member growth in the third quarter, we have already NOK 200 million of the improvement in the books. Reaching NOK 800 million also assumes that we can increase prices in line with inflation, enough to compensate for the increased rent costs and wages. Energy cost is another factor of uncertainty that will affect time or how many members we need to reach EBITDA capacity. To accelerate the improved profitability, cost reductions in the near term will be important to mitigate the inflationary pressure. As I've shown, we still have ample room for member growth beyond pre-COVID levels in terms of members per square meter, and this is further enhanced by our club optimization initiatives.
Remember, our top performing clubs have 2.8 members per square meter, which is twice the average in the portfolio. As a rule of thumb, an increase of 100 members per club across our 275 portfolio yields a run rate improvement of NOK 150 million. On top of that, we still believe there are attractive M&A opportunities and white spots for Greenfield in existing and new markets, and we will pursue opportunities for new revenue streams in adjacent products and services. As the portfolio matures, delivering on our long-term strategy should take us to a significantly improved margin, targeting 20% in adjusted EBITDA margin. Our key focus in the short term is regaining the member base as we had before the pandemic and offset the inflationary pressure with price increases and cost discipline.
Delivering on the already commenced road to profitability will unleash adjusted EBITDA capacity in the current club portfolio. Once back to the pre-pandemic levels for members per club, the journey towards even higher utilization starts, as there were unexploited capacity in the clubs also before the pandemic hit. On top of that, there are interesting club growth and new revenue streams opportunities to capture. We will steadily lay brick by brick towards an adjusted EBITDA margin of 20%. With that, I will leave the word back to Sondre for closing words.
Thank you, Cecilie. Thanks to all the colleagues of mine who have been representing. I thought I would summarize the key messages we have heard today. As Cecilie was pointing out, we had a strong financial development before the pandemic, and we believe, as we laid out in the first section today describing the Nordic fitness market, that the market will continue to grow and that the fundamentals of the fitness market has not changed today compared to the situation before the pandemic. However, as Cecilie has also laid out, the macroeconomic situation adds temporary pressure to our margins due to especially inflation on rent and energy prices. So far, we see no signs of weakened consumer sentiment. The member base is growing on the back of strong sales and decreasing churn.
The time to full financial recovery is dependent on the inflationary development and the development in energy prices, as well as a potential effect on the consumer sentiment going forward. Our short-term focus will be fully on growing the number of members per club back to the pre-pandemic level and then continue the growth after that. Counteracting inflation with increased average revenue per member, strong cost discipline and operational leverage, unleashing the EBITDA potential in the current portfolio. Long term, we will further grow the member base beyond the pre-pandemic level and then re-accelerate club growth and pursue opportunities for new revenue streams. Again, that's for the long term. For the short term, further club expansion is paused.
I hope that you've also seen that we have a strong and committed management team representing a full organization that are eager to deliver on these priorities and ambitions. With those words, looking at the clock, I promised you a Q&A session in the beginning around 11:10 A.M. Now it's seven, eight minutes past 11:00, so I think we are on time. With those words, I thank you for coming to the Capital Markets Day and for listening, both here in the room and then also to all of you on the web stream. Looking forward, as we've said, to working out together afterwards. We will open for Q&A both to Cecilie and myself, and of course we also have the management team represented who can answer.
We'll start with questions in the room and also take questions that has come in, Stine, from the audience on the webcast. Any questions in the room? Let's start. We have a microphone so webcast can listen in as well.
Thank you. Marcus Heiberg from Kepler Cheuvreux. Thank you for this presentation. It's very helpful. My first question here is definitely on the inflation that we are seeing and a crucial part to reaching that run rate EBITDA is actually increasing prices with inflation and talking about 6%-10% increase in rents, which is the CPI level. Then we see Fresh Fitness, which is this low-cost, maybe some price-cautious customers. What's your strategy to actually implement 10% price increases without losing customers? That's first one.
We can start. We have been working with the yield optimization over the last few years, both looking into existing member base, looking into the list price for new members, and then of course doing inflation adjustments. We did the last adjustment already now in August, so it's not that long ago. We also did adjustment in January. We have quite strong analytical tools following these adjustments and also understanding the price elasticity of new members and existing members. We are pretty confident that, you know, given what we see around us now, that we will be able to increase yield also with the levels of inflation we see around us.
Again, you know, predicting the consumer sentiment for the future with what we see now on, you know, reduced household spending, et cetera, I don't think we should be, you know, too certain on anything. We just have to base it on the facts that we see in the market, what we see on demand and also the analytical tools we use. We are guiding pretty clear here, and we will do inflationary adjustment in our member base in January 2023 and of course adapt that to the price elasticity we see.
Thank you. Just my final question is on Fresh Fitness and the low-cost trend that we're seeing in Europe. Fresh Fitness, is it they're not evolving as strong? Is it due to competition, increased competition, especially, say, in Norway in that segment? Or is it more that these customers actually are more cautious about spending, or what's your take on that?
No, we don't see any, you know, significant change of development in Fresh Fitness now over the last couple of months compared to the market in general. As we saw on the slide, the recovery of members per club compared to pre-pandemic level was somewhat lower in Fresh compared to SATS in Norway, which is due to a somewhat slower start on recovery just after reopening. The reason why we see in general is not only for Fresh. We see in general, as I said in the beginning, we see a slower, so to say, club growth of low-cost operators in the Nordics now than we saw quite some years ago and also compared to what you see in many European countries.
That is due to basically that, so to say, the low-cost trend came into the Nordics back in 2014, 2015. The shift from, so to say, high-end to low-cost that we saw in the Nordics several years ago is what is happening now in European cities, which don't have low-cost operators from before. We believe that, you know, the Nordic fitness market is just ahead of the curve. The balance we see in the Nordic fitness market now is a pretty sound balance. It was like that also. We saw these clear signs back in 2018, 2019 already that the market balanced, and we believe it's the right balance going forward.
We believe that fitness penetration will increase, but it will be driven both by low-cost growth and full service growth, and this will be quite balanced in the growth going forward. We don't see any, so to say, major shifts as the market basically is more mature. You know, fitness penetration levels in Europe on average is around 13%-14% compared to 20% plus in the Nordics. It is a more mature market.
Thank you.
Hi, Petter Nyström from ABG. One question from me, and that goes on the overhead costs. You highlighted that you now have roughly NOK 550 million, and you target to cut that, as a percentage of sales, if I understood correctly. Could you shed some light on what that level will be? I mean, is it correct that it was around 5%-6% in 2019? Thank you.
Well, the level of overhead in terms of revenue was around 10% in 2019. We will look throughout the full cost base and do reductions. We won't go into detail on the different parts of it, but we feel confident that we will be able to reduce to 2019 level in the medium term. One question from Alexander Fredriksson. Thanks for a good presentation. Brief question on your strategy and footprint in mid-sized cities and the competition of Swedish actors claiming this space in the Swedish market. In the Swedish market, you have a few outlier clubs that are located in areas not connected to any bigger cluster. Can you say something about your ambition in these clubs going forward? A bit shortened version.
Sure.
Mm-hmm.
If you look at the four different markets where we are present, we have somewhat different footprints. Norway is the market where we have most clusters, so to say, and most clubs also outside the capital city. In Denmark, we are fully concentrated in the greater Copenhagen area. In Finland, we also have a very strong position at Helsinki and another cluster outside. When it comes to the Swedish market, we are mainly concentrated in Stockholm, and then we also have a strong cluster in Gothenburg and Malmö, and we have some outstanding clubs as well. Basically, we have quite a prudent approach to these clubs.
As long as they are either serving, so to say, a strategic value to the key cluster, we will keep the clubs. Of course, when we have standalone clubs, like we also have in Norway, if the clubs are, you know, profitable and you know, we are able to run the club in a good way going forward, we will keep the clubs. As we said, in this presentation, short-term, we are now pausing club expansion. We have some new signed greenfields coming up. We will continue to deliver and open those because those are very strong locations. We will not add new clubs to the greenfield pipeline in the short term, meaning that we will not expand heavily in mid-sized Nordic cities in the short term. We do see some very interesting opportunities.
We are being approached on potential acquisition opportunities. Longer term, we will re-accelerate this growth, but that is saved for the long term.
Over to Ole Martin Vestgaard. He has three questions. We'll take them one by one. How should we think about membership yields for 2023 versus 2022 given the high campaign activity?
Yeah, I can start and then Cecilie can comment on the reported yield. I think it's, and we have said this many times, but we still get the question a lot. I understand, you know, it's a bit, you know, difficult to grasp or either we are not able to explain it in a good enough way. It is a difference between the underlying contractual price that the member pay and the reported yield. Because when we do campaigning, we don't discount the membership price long term. If you give away 1 month free in the beginning of a membership, basically what is happening is that the member comes in. The first month they are training, they are not paying because they get 1 month free, and then most of the members have a 12-month binding period after that.
During those 12 months, so from the second month they are a member, they pay full price. They pay full price for those 12 coming months. The first month of revenue, which they are not paying because they got one month free in the beginning, is being discounted throughout the full membership period. That's why the financial reported yield is somewhat lower than the actual yield they pay. This is important, and that's why we talk about the reported yield versus the underlying contractual price. The underlying contractual price is being increased and will be so throughout 2023, as we have done successfully throughout 2022.
I think that was a good.
It's up there?
Answer. Well done.
I have to do it again sometimes. We have to practice that one.
The second question from Ole Martin, "What membership base level are you targeting for 2023?
We are not guiding on a specific member base level and the timeline for that. What we are clearly stating is that short-term, we will reach pre-pandemic level per like-for-like club and also increase the new clubs to that level. We have closed the gap, as we said, only from Q2 to Q3 2022. We have closed the gap from 200 members per club in difference to now 80. Of course we aim to close that gap as soon as possible, but we are not giving a concrete guiding on membership level in 2023.
Then the last one, "What is your current expectations for cost inflation in 2023 versus 2022?"
Well, for 2023, we are expecting the consumer price index that we've seen from October on the largest part of our cost base, which is rent. As said, we are trying to negotiate with the landlords to get that CPI adjustment down. When it comes to wages, which is another third of our cost base, we expect them to be higher than what we've seen, but it's not. We've not sort of negotiated what the increase for next year will be, but it will probably be higher, and that will differ between the countries. That's sort of the most important drivers of costs that's affected by inflation.
Yeah. Just to be, you know, one more detail when it comes to the CPI adjustment of rental cost. I think it's important to understand that, you know, the CPI adjustment that is being reported, for example, from or from the government in different countries, that's a consumer price index which includes the increase in energy cost. So it's the sum of all consumer goods, including energy costs. Historically, it's not been a big difference between the underlying inflation and the increase in energy costs. Hence, the CPI with or without energy cost has been quite pretty similar. Now, when we see such a high increase in energy cost, the CPI is, you know, unnaturally driven up by this.
Since we are paying the energy cost ourselves on our premises, as most other retail players, it's, you know, the underlying contractual adjustment in the real estate cost should not be the reported CPI level that we see from the authorities, but the CPI excluding energy cost increase. Where we have started this discussion, we have met pretty good understanding on this topic. This is an important area for us, which is heavily affecting how much we are increasing real estate cost with or our rental cost with next year, as it is for most other retailers in the Nordic at the moment.
Any other questions from the audience?
Yes. Also a question on your financial situation because you talk about some covenants and we know it's not disclosed. Explain how it's measured and how we should think about the EBITDA level that you need to have. Is it a run rate level or is it sort of adjusted for seasonality or how should we think about this minimum level of EBITDA and liquidity?
Yeah. For the coming year, for 2023, we will have adjusted EBITDA covenants. As I said, 2022 will not be part of that measure. It starts from the first quarter in 2023 and should improve throughout the year. We have an EBITDA adding covenant.
Okay. I understand. Thank you.
There's one from Arun Vora. "What options to add liquidity in case of stronger downturn in the economy does SATS have? Is an equity raise in the share price something that would be considered?"
I mean, we are very comfortable with the current liquidity situation. With the outlook that we have now, we have sufficient liquidity to handle current operations and anything else will be just speculation. Good. I think that concludes the Q&A.
No more questions in the audience? Everybody's eager to hit the heat room. Okay, thank you for listening.
Thank you.