Good morning, welcome to the SATS Q1 2026 Presentation. My name is Sondre Gravir, the CEO of SATS, and I'm joined by our CFO, Cecilie Elde. We will host a Q&A session at 10:00 CET following today's presentation. Details and link to the Q&A session are included in this morning's stock exchange announcement. Let me start with a quick overview of SATS. Many of you know us well, just a brief introduction for those new to the case. We are the leading fitness club operator in the Nordics with 272 clubs and 769,000 members, supported by 10,000 employees. We have strong positions across all key markets with strong clusters in major cities like Oslo, Stockholm, Helsinki, and Copenhagen.
Financially, we are seeing a solid momentum, proving our scale and financial leverage, with revenues up 5%, EBITDA up 20%, and EBIT up 25% on the 12 months rolling basis. These results are enabled by a superior product offering, fueling high activity levels with 157,000 daily workouts and more than 2,100 daily group training classes. Before we move on to the Q1 highlights, I would like to take a step back and look at how the company has developed since Q1 2023, our first clean or normal, if you want, post-COVID comparable quarter. We have created value by widening the gap between revenue per member and cost per member over time, resulting in an increase in EBIT per member of 110% or an annual growth rate of 28%.
An important factor here is our cost structure, where a high share of semi-fixed cost means that incremental members and activity translate efficiency into earnings as cost per member declines with scale. Importantly, this is not only a story about membership growth, but equally about the development in revenues per member driven by improved product offering, increased member satisfaction, and a strengthened brand position. Looking ahead, we still see significant upside. We have a lot of great things we want to do that will further support the current trajectory. The continued growth will be driven by both volume growth in the existing footprint and further improvements in revenue per member through both yield and add-on services in addition to expansion of the club network. Let's move into the Q1 highlights. Let's start with our member. It's always members first, one of the four core values in SATS.
We continue to see increasing engagement and satisfaction, which is translating into stronger loyalty over time. This gives us confidence that the improvements we are making to the product are clearly resonating. Strong member satisfaction, supported by continuous product enhancement, has enabled us to continue increasing ARPM, both through price adjustments and upsell. The adjustments we have implemented around the turn of the year have materialized as expected. The momentum in engagement and satisfaction is clearly reflected in our financial performance. We deliver another solid quarter with EBITDA of NOK 217 million and EBIT of NOK 162 million, driven by both growth and continued cost discipline. With this, we continue to demonstrate the strength of our operating model. 2% member growth, 4% ARPM growth translates into 6% revenue growth. We see a strong flow through to profitability.
EBITDA is up 17% and EBIT up 22% in the quarter, highlighting the operational leverage in the business. Finally, we remain committed to delivering shareholder value. During the quarter, we returned NOK 257 million through a combination of share buybacks and dividends. Let me build on the point around member engagement. We are seeing here that our targeted initiatives around product improvements and personalized member communication are gradually shifting behavior across the member base. We segment our member base continuously based on daily visit patterns. Starting on the left-hand side, the segment balance in the member base is, as you can see, clearly improving. We are reducing the share of passive members, down 3 percentage points, while growing the more active segments. Overall, we are moving members in the right direction towards higher activity and stronger engagement. Why is this so important?
Because an active member is a happy member. They continue their membership and hence lifetime value is improving. The vast majority of members churning, they are leaving us because they have become passive. With our volumes, a three percentage point reduction in the passive share is significant, driving churn levels down. This development is driven by the KPIs you see to the right. Activity volumes continue to trend positively. Total workouts are up 9 % over the period, and unique visitors are up 6 %. In other words, we are seeing that both frequency and reach is increasing. Combined, this is a clear indication that our initiatives are working as intended, driving higher activity, a healthier member segment mix, and ultimately a stronger foundation for long-term value creation. What's particularly encouraging is what we are seeing post-January.
Historically, the industry has experienced a drop after the new year peak, what was, and what has recently been referred to as Quitter's Day. At SATS, we are not seeing this pattern. Instead, activity levels are being sustained well beyond the January peak. That tells us that members are not just starting, they are staying. This is a direct result of the work we have done on product quality, member experience, and engagement initiative. This is an important proof point. We are not only driving higher activity, but also more consistent behavior over time, which ultimately strengthen retention and lifetime value. Moving over to group training, which is an important part of our engagement strategy. When we improve the group training offering, the first KPI we typically see moving is total activity, primarily driven by our existing active members attending more frequently.
Group training workouts in the period are up 26% if you look at the past two years. The second step, and more important one, is activation. We are now seeing more members starting to use group training reflected in an increase in unique participants. This tells us that the product is becoming more relevant for a larger share of our member base. Thirdly, this is also translating into commercial impact. We are increasing the share of new memberships sold with group training included, which further strengthen engagement from day one. We see a clear progression, higher frequency, broader adoption, and stronger attachment at entry, building a more engaged and higher quality member base over time. I will conclude this section by closing the loop. What is the overall effect of what we have seen on the previous slides?
We continue to deliver strong member satisfaction at 4.5 out of five. That reflects consistently high quality member experience across our clubs. The final KPI that moves when we improve product offering, total engagement, and member satisfaction, that is retention. Lower retention or higher retention results and translates into lower churn. Over the period, churn is down 2.2 percentage points. This follows a very clear progression. We first drive engagement, then activation, and then ultimately retention. This is the key driver behind the increased EBIT per member I talked about in the beginning of the presentation. The best part, there is still significant upside looking ahead. I leave it over to Cecilie for the Q1 financial section.
Thank you, Sondre, and good morning, everyone. Let me start this section with a brief overview of the key highlights for the quarter. We continue to see solid development across the business with both member growth and ARPM contributing to revenue growth of 6%. At the same time, we are seeing clear operating leverage with EBITDA and EBIT growing significantly faster than revenues. Cash generation remains strong, and we continue to maintain a solid balance sheet with low leverage. I will now walk you through the key drivers behind these developments in more detail. Member development in the quarter remains solid and in line with what we would expect for the season. We closed the first quarter with 769,000 members, a 2% increase year-over-year.
Net member growth in the quarter ended at 13,000 compared to 24,000 in Q1 last year. While the year-on-year growth is lower, this is primarily explained by specific effects in the comparison period. Firstly, Q1 of last year benefited from an exceptionally strong 30-year anniversary campaign, which drove unusually high intake. Secondly, the campaign structure last year differed from previous years, meaning that part of the churn we would normally expect in Q1 this year will now shift to Q2, as next quarter. We have also seen some impact from the VAT-related pricing adjustments in Denmark, which have dampened volume growth somewhat, although less than initially expected. Finally, the portfolio develops differently, with one club closure this year compared to one club opening in the same period last year.
Adjusting for this, the underlying development remains healthy and is stronger than we normally see in the first quarter. An important part of our performance, it's also the development in price per member. Let me walk you through the underlying price development, starting with contractual price versus reported yield. Starting on the left-hand side of this page, contractual price is the list price after deducting ordinary discounts for seniors, students, corporate members. The contractual membership price continued to increase steadily, reflecting the underlying price development. This is driven by our structured pricing measures, including list price adjustments, inflation adjustments, and targeted increases for underpriced memberships. The price adjustments in the quarter have materialized as expected, both in terms of financial impact and impact on churn.
We've also seen a positive mix effect over time, where members choose higher priced products and new members enter at higher price points. This supports the long-term price development. At the same time, there are some elements at work that work the opposite direction in this quarter. We see some impact from membership mix, where growth in discounted groups such as students, seniors, and corporate members, has a slightly negative effect on the average contractual price. However, these segments are important growth segments for us and part of our long-term strategy. In addition, the VAT-related changes in Denmark have a negative impact on the reported price development, as the price increases that we have done is fully offset by VAT. From a financial perspective, this is partly offset by increased VAT deductibility on cost.
Looking at reported yield, this different from contractual price as this reflects timing and activity effects. As you can see from the right-hand side of this slide, campaigns with free periods and promotions temporarily dilute yield, while freezes, especially during summer months, temporarily reduce the average revenue per member. In addition, timing effects mean that price increases phase into revenue over time. If we look at the longer time period, the development in yield and contractual prices are very similar. Contractual price has increased by around 20% over the last three years, while yield has increased by around 18%. This illustrates that the underlying pricing development is consistent, with yield mainly showing much more variability quarter-over-quarter due to the freeze effects and the campaign activities from last year.
Looking at the total ARPM and revenue development, we continue to see solid progress in the quarter. Revenue increased with 6%, driven by continued member development and ARPM growth. ARPM increased by 4%, reflecting both membership yield and development in other revenues. Looking specifically at membership yield, this increased by 5%, driven by the pricing adjustment implemented this year. As discussed on the previous slide, the pricing development has been stable over time, with similar quarterly increases across the recent periods. This provides a good indication of how membership revenues are likely to develop going forward, and we expect the development to remain broadly stable in the coming quarters. Overall, this confirms that revenue growth is driven by a combination of pricing, product improvements, and member development, and remains both robust and sustainable.
As revenues continue to grow, we also see a well-controlled development in the cost base. Total costs increased by 5% year-on-year, which is below the revenue growth, demonstrating continued operating leverage. The increase is primarily driven by targeted investments in the business. In particular, we have expanded the group training offering also this quarter, with clauses up 16% compared to last year. This quarter also includes a one-off employee gathering, which should be seen as an investment in our people, culture, and employees who deliver our product every day. Adjusting for these effects, the underlying club OpEx growth was around 2.7%. Overall, this confirms that the cost developments remain well controlled while we continue to invest in initiatives that supports further growth.
With revenue growth outpacing cost growth, we are seeing clear operating leverage in the business. This is directly reflected in our profitability. EBITDA before IFRS 16 increased by 17%, while EBIT before IFRS 16 increased by 22%. The development reflects the scalability of the business model, supported by scale benefits and high share of semi-fixed cost. Net profit increased by 13%, but is impacted by unrealized non-cash financial effects in the quarter. These are primarily related to currency movements and do not reflect the underlying operational performance. Overall, the quarter clearly demonstrates continued margin expansion and strong underlying earnings growth. Following strong profitability, we continue to take a disciplined approach to capital allocation. We invest both in upgrading existing club portfolio and in building future growth through expansion.
Looking first at CapEx, investments in the quarter are primarily related to upgrades and maintenance of existing clubs. These investments are not only maintenance, but also support capacity utilization and member experience. Even though maintenance CapEx is low in the quarter, this is due to timing of projects, with less major projects during peak season, and this does not reflect any change in the ambition. At the same time, we see a clear strengthening of the expansion pipeline compared to previous periods, with four new clubs in the pipeline compared to last reporting. We have multiple projects ongoing across Norway and Denmark, with several processes now also in the final stages, and this gives us confidence in reaching the targeted run rate of eight-12 new clubs per year from 2027.
This reflects a balanced approach, where we both optimize the existing portfolio and build a stronger foundation for future growth. Turning to cash flow, we continue to see strong cash flow, strong cash generation in the business. Free cash flow was NOK 136 million in the quarter, and NOK 541 million over the last 12 months. Cash conversion remains high at around 60%, reflecting the strong underlying performance. Cash flow in the quarter is supported by somewhat lower maintenance CapEx, mainly due to timing effects. Over time, CapEx levels will normalize, but the underlying cash generation remains strong. Importantly, the business model support structurally strong and predictable cash generation and provides a solid foundation for both continued investment in the business and shareholder distributions. Then looking at the balance sheet, we maintain a strong financial position.
Net leverage is 1.1 x, which is below our target range of 1.5x-2x, despite significant shareholder distributions in the quarter. At the same time, we maintain a solid liquidity position, providing flexibility to continue investing in the business while returning capital to shareholders. We also see some positive currency effects in the quarter, mainly related to translation effects on liquidity. These are non-operational and can vary over time. The balance sheet remains strong and conservative, giving us significant flexibility to support growth and distributions going forward. Finally, just a few words on shareholder distribution. We remain committed to our distribution policy, targeting more than 50% of annual net profit while maintaining leverage in the lower end of our target range.
In the quarter, we paid a dividend of NOK 132 million and executed share buybacks of NOK 125 million. We expect the next dividend payment in August and will continue periodic share buybacks alongside proceed share cancellations. Looking ahead, we intend to continue the same disciplined approach, balancing investments in the business with attractive and predictable shareholder returns. With that, I'll leave the word back to Sondre for outlook.
Thank you, Cecilie. Rounding this presentation off with the outlook, we remain firmly focused, as you can see also from this Q1 presentation, on the core of the business, continuing to build on the positive performance cycle we are seeing. This is supported by ongoing investments in the product, as well as a clear focus on improving asset productivity across both clubs and employees, leveraging scale and utilization. At the same time, we remain strict discipline on both OpEx and CapEx. We are balancing cost control with targeted growth investments, we continue to aim for eight to 12 new club openings per year, always with a clear focus on quality over quantity. Finally, the positive momentum we built through 2025 has carried into 2026, based on what we see today, we expect another strong year for SATS, both operationally and financially.
With that, we are concluding this presentation. Thank you for listening. We wish you all a healthy and happy Thursday.