Good morning and welcome to the SATS Q4 2025 presentation. My name is Sondre Gravir, the CEO of SATS, and I'm joined today by our CFO, Cecilie Elde. We will host a Teams Q&A session at 10:00 A.M. Details and link to the Q&A session are included in this morning's stock exchange announcement. With that, let's turn to the highlights of the full year 2025 and the fourth quarter. For the full year 2025, the member base increased by 22,000 members to 755,000, and visits increased by 6% to 49.4 million visits in total. This resulted in a strong financial delivery for 2025: total revenues increased by 9%, EBITDA by 18%, and EBIT by 24% compared to previous year. Looking at Q4 specifically, we closed the year on a strong note. In Q4, revenues increased by 9%, EBITDA increased by 28%, and EBIT by 34% year-on-year.
This comes as a result of higher activity levels, disciplined cost management, and strong operational leverage. Cash generation remained strong, with free cash flow of NOK 244 million in the quarter, which is up 59% compared to Q4 2024. This is demonstrating the robustness of our business model and our ability to convert earnings to cash. The board has proposed a semi-annual dividend of NOK 0.67 per share, subject to approval at the extraordinary general meeting on 3 March 2026. We are happy to deliver so many great member experiences, resulting in a strong contribution to public health and strong financial results, with significant shareholder contribution for 2025. This reflects improved asset productivity across clubs and employees leveraging scale and utilization. The workout frequency continued to increase in Q4, reinforcing the positive momentum we have seen throughout the year.
Higher activity levels are driven both by continued membership growth and higher workout frequency per member, but with the same club footprint. Importantly, higher activity and growing number of unique visitors are strong leading indicators of member loyalty and lifetime value, supporting the long-term health of the business. Group training remains a key driver of this development. In Q4, we added 20,000 more group training classes to the schedule compared to last year. Continued investments in the group training offering are translating into higher engagement, lower churn, and higher lifetime value, further strengthening the underlying economics of our membership base. The positive momentum also continued into the start of 2026. January activity levels were strong, confirming that member engagement remains high into the new year.
Visit levels in January were up compared to last year, supported by continued demand for our core offering and strong engagement in group training. What is important to note is that this trend isn't driven by active members working out even more, but rather through more unique visits, which is great both from a public health perspective and from a long-term profitability perspective. But improved visit numbers don't come by coincidence. One important lever is continued product improvements. And targeted product improvements continue to drive higher activity levels across our clubs. We take a consistent, data-driven approach to upgrading our offering, focusing on where we see the strongest impact on member engagement and capacity utilization. Across group training, the fitness floor, and our premises, we are making selective investments, introducing new concepts, replacing or adding equipment, and improving layouts and upgrading the overall look and feel of our clubs.
The examples shown on this slide highlight the tangible impact of these measures. Following major renovation and upgrades, we see meaningful increases in both overall visits and group training visits, confirming the strong member demand and improved utilization of existing capacity. Importantly, this demonstrates how we can drive higher activity and returns by optimizing our existing club portfolio rather than relying on expansion alone. Lastly, I would like to highlight the consistency of our delivery over recent years and how that builds confidence in our long-term growth trajectory. We have delivered steady, repeatable improvements quarter- by- quarter across both operations and financial performance. From 2023 to 2025, we have grown revenues at an annual rate of 8%, EBITDA by 19%, EBIT by 32%, and earnings per share by 46%, reflecting strong operating leverage and the scalability of our business model.
This disciplined and consistent execution underpins our confidence in continued progress going forward and supports our ability to deliver further growth over time in line with our mid-term EBITDA ambition of NOK 1.1 billion. Overall, the development demonstrates that our strategy is working, our operating model is scalable, and we are well positioned to continue creating value over the long term. With that, I leave it over to Cecilie for the Q4 financial section.
Thank you, Sondre, and good morning, everyone. Let me start by briefly summarizing the key financial highlights for the quarter. Overall, the quarter shows that we continue to deliver in line with our communicated plan. We see solid underlying development across our business, with revenue growth, improving profitability, and good cash generation while maintaining a tight approach to costs and investments. At the same time, the balance sheet has been further strengthened, giving us the flexibility to invest in the business and to deliver predictable shareholder returns. In sum, the quarter confirms a controlled and steady development fully aligned with our long-term ambition. We closed the quarter with 755,000 members, a 3% increase year-over-year, or 22,000 additional members compared to the same period in 2024.
As communicated last quarter, the fourth quarter was expected to be seasonally weaker following the earlier autumn sales campaign launch in the third quarter. So net member change in the quarter was -1,000, which is slightly better than what we indicated last quarter, and overall, the second half member development was somewhat better than last year. At the same time, member per square meter continued to improve, also increasing by 3% year-over-year, reflecting stronger utilization of the existing club portfolio. This is an important structural improvement, supporting both returns on invested capital and future growth capacity. Turning to revenues: total revenues increased by 7% year-over-year on a currency-adjusted basis. The growth reflects a healthy balance between member growth and continued price improvements, confirming that our commercial strategy for expanding the product quality and offering is working well.
Membership revenues were also up 7%, supported by the 3% increase in members and 4% currency-adjusted uplift in average revenue per member. We continue to actively manage the trade-off between price and volume to maximize revenues, and at times, we intentionally prioritize one over the other to maximize overall performance. Other revenues also developed well, supported by higher personal training activity and increased retail revenues. Coming into 2026, we have implemented price increases across the portfolio, and the initial effects are developing in line with expectations, while the full impact will be reflected in the Q1 reporting. Overall, this confirms that we are executing according to plan, balancing price and volume to drive sustainable revenue growth. Moving on to cost in the quarter: club operating cost increased by 2% currency-adjusted.
We have continued to invest in our group training product also in the fourth quarter, further expanding capacity and availability. This is a deliberate choice, as higher activity levels are one of the most effective drivers of lower churn and higher lifetime value. Additional costs related to group training accounted for around 1.5 percentage points of club operating growth, implying that other operating costs were broadly stable year-over-year. Direct costs and COGS developed in line with growth in other revenues, mainly reflecting higher activity levels. Overall, the Q4 cost base reflects targeted investment combined with good cost control. There will always be some variation in costs between quarters, depending on activity levels and timing of investments. What matters the most for us is therefore not the cost development for individual quarters, but the rolling 12-month cost development.
That brings me to the full-year picture on the next slide. For the full year 2025, club operating cost increased by 5% on a currency-adjusted basis. When adjusted for the targeted investments to support membership growth, underlying operating cost increased by around 2.5%, confirming solid cost discipline. Importantly, when viewing on a rolling 12-month basis, cost development is fully in line with what we have communicated. Costs are increasing broadly in line with inflation, adjusted for selective investments in product and, when relevant, lifted marketing efforts to support volume growth. Looking ahead, the cost outlook is influenced by price changes in key input factors and wage adjustments from local agreements. At the same time, product investments, including continued expansion of group training capacity, remain payback-driven, supporting lower churn and higher lifetime value. For Q1 specifically, costs will be somewhat elevated, reflecting a non-current employee gathering.
This does not change the underlying cost trajectory. The balance between cost control and targeted investments remains central to how we run our business. Turning to profitability: Q4 delivers strong earnings growth supported by operating leverage. EBITDA before IFRS 16 increased by 28% to NOK 224 million, with the margin improving from 13% to 16%. EBIT before IFRS 16 increased by 34% to NOK 168 million, with the margin improving from 10% to 12%. This demonstrates the scalability of our model: moderate revenue growth translates into proportionally stronger earnings when costs are well controlled. CapEx for the year was in line with our 5% target, focused primarily on upgrades and maintenance within the existing club portfolio. These investments are not only maintenance but also investments in further growth, improving capacity, and member experience.
We continue to apply strict investment discipline, prioritizing projects based on club quality, competition, and cluster strategy. On expansion, we opened 1 club in the quarter. The pipeline for projects includes projects in Oslo and Copenhagen, and we are actively scouting locations in key Nordic cities. While the visible pipeline is currently limited, we have several strong prospects under evaluation and remain confident in reaching a run rate of 8-12 new clubs per year from 2027. Cash flow was strong in both the quarter and full year. In Q4, we delivered free cash flow of NOK 244 million, supported by strong underlying earnings and solid operating cash flow of NOK 253 million. The quarter benefited from normal seasonal working capital movements, while maintenance CapEx remained at planned levels and expansion CapEx was limited. Looking at the full year, free cash flow reached NOK 506 million.
This corresponds to a free cash flow conversion of 58%, which we consider a solid outcome given the continued investments in clubs, product improvements, and marketing initiatives during the year. The cash flow development was primarily driven by EBITDA growth, with maintenance CapEx in line with our long-term targets and higher tax payments reflecting improved profitability. Overall, the full-year cash flow confirms the robust and predictable cash-generating capability of the business and underpins our ability to invest selectively and return capital to shareholders in line with our financial framework. Our balance sheet remains very strong. Year-end liquidity was high, driven by strong free cash flow, and is expected to normalize following the dividend payment in March and continued share buybacks. Net debt ended at NOK 967 million and leverage declined further to 1.1 times net debt to EBITDA before IFRS 16.
This is well below our target range of 1.5-2, providing significant flexibility in investments, expansion, and shareholder distributions. Finally, a few words on shareholder distributions. Strong cash flow supports attractive shareholder returns, fully in line with this distribution policy. In 2025, we returned capital through both dividends and share buybacks. For the first half, we paid a dividend of 0.63 NOK per share, corresponding to a 50% payout ratio. In addition, we repurchased 7.8 million shares, representing 3.8% of the share capital. For the second half-year, we have proposed a dividend of 0.67 NOK per share, corresponding to a 61% payout ratio, subject to EGM approval. Overall distributions in 2025 were well above our stated minimum of 50%, while leverage remains comfortably below target.
Looking ahead, we intend to continue with the same disciplined approach, balancing investments in the business with attractive and predictable shareholder returns. With that, I will leave the word back to Sondre for Outlook.
Thank you, Cecilie. Moving into Outlook. Looking ahead, we remain firmly focused on our core strategy. We will continue to invest in our product offering and driving asset productivity across clubs and employees, and we are extending the positive performance cycle over time. As Cecilie also commented on, we maintain a disciplined approach to both operating costs and capital expenditure, balancing cost control with targeted growth investments. While we continue to see opportunities for club expansion, our priority remains quality over quantity. The year has started and proceeded according to plan, with solid visit growth. We have implemented higher price increases than last year, which will result in lower net growth than last year's extraordinary member growth in Q1.
But overall, the positive momentum from 2025 has carried into 2026, and we are confident that the year as a whole will be another strong year for SATS, both operationally and financially. With that, we would like to thank you for your time and interest today, and we hope that you are as excited for 2026 as we are. Thank you.