Good day, and thank you for standing by. Welcome to the SkiStar Q1 Interim Report, 1st of September 2024 to 30th of November 2024, webcast and conference call. At this time, all participants are in the listen-only mode. After the speaker's presentation, there'll be a question-and-answer session. To ask a question during the session, you will need to press star one and one on your telephone. You will then hear an automated message advising your hand is raised. To withdraw your question, please press star one and one again. Please be advised that today's conference is being recorded. I would now like to hand the conference over to your speakers today, Stefan Sjöstrand, CEO, and Martin Almgren, CFO. Please go ahead.
Good morning, everyone, and a warm welcome to our first quarter presentation of this financial year 24/25. And my name is Stefan Sjöstrand, and I'm the CEO. And together with me, I have Martin Almgren. I'm CFO here at SkiStar. So we would like to run you through an agenda today. We will give a short introduction and a little bit of a sum-up of our financial goals. We will give you first quarter highlights. Martin will show you some numbers. I will tell you a little bit about the outlook, and then we will summarize, and you will be able to ask questions to us. So let's go into the presentation. And we're really glad to summarize the strong previous year, where we had record numbers in turnover, and we also had a really good financial result. Really glad to have satisfied employees and also a very satisfied guest.
We are really glad to offer this memorable mountain experience, and we are happy to do it all year round. We have set up our financial targets to have 6% organic growth, 18% operating margin, leverage of net debt/EBITDA maximum 2.5, and then dividend of 40%-60%. Last year, we were really glad to have 10% growth. We delivered 16% margin, and we also are in a favorable, good financial position with net debt/EBITDA of 1.7. We also have a dividend, which will be paid out tomorrow, of 46%, SEK 2.86. We also offer sustainability targets, where we really would have an activity and recreation around all our guests, and we will try to reach 7 million activity skier and activity days. We are really proud to be into a really good situation around our climate reduction with 50%.
We are working very strongly together to find collaboration and also have a sustainable development throughout the total value chain. If we then look into our strategic initiatives, we have five important movements, which we are working with every day throughout our organization. One is to develop the development of the all-year-round operations, and we really strive after increased capacity and even more attractive destinations. When we do that investments within our resorts, we can also see that we will continue to drive visits. We work strongly to strengthening our margin and also our growth, and we do that by our dynamic pricing. Also we can clearly see that we have an increased average spend, especially when we are targeting more guests from other countries than we have had previously. We also work very intensively to increase the number of commercial beds.
And when we do that, we can also see that we have a stronger factor of long-stayed guests. We continue with our sustainability agenda and also secure the sustainable future mountain experiences. And then really proudly to see that we normalize our investments over time now, since we have been in a situation where they have been higher, but now we have come down to a more good or normalized level, and we will continue to do that over time. I think it's important to talk about the size of SkiStar. We have an unmatchable position in Scandinavia. We offer the five largest destinations, and it's important to clarify that also to the market that we offer extremely strong ski destinations. And if you want to go to Sälen, we are one of the largest ski destinations in the world and really proud to have the top five, actually.
So, is important to highlight that, as well as it is important to highlight how we continue to develop the SkiStar destinations. Those four pictures are an exemplification of how we develop the land within Sälen in this case and in the slope of Söderåsen, where the picture down to the right is showing now how it could look like from five years from today up to five years from now, how we will develop and how we will build and how we will develop the areas from virgin area up to actually an area of the ski lift will be the starting point, and then we will continue to grow with beds and also fantastic areas for our guests. The internationalization, which we have started to drive, is also supporting the average spend. The average spend within SkiStar is SEK 19,000 .
And if we look into the international guests, they are driving this average spend. For example, the Danes are spending SEK 30,000 versus a Swede spending SEK 17,000. Of course, this internationalization is supporting and helping us to drive the average spend. That was an introduction, and I will go into the quarter one highlights, which I think is very important here for us. First of all, it's impressive, I must say, with our organization in welcoming 2,500 seasonal coworkers, and 60% of them are returning from last year. They are doing an amazing job within the HR department to recruit and train and also introduce all these fantastic people. I've seen some media this morning about the bookings minus 3% down, and I think it's important to try to clarify the minus 3% and give you a picture of that.
Those 3% down is around 10,000 nights, and I think it's also important that it's a very high historical level. We are the third best booking year ever. If I then try to help you a little bit and guide you, last year we had a very early opening in November because we had a record year of snow, and that meant that that exceptional early start of the season has actually meant around 5,000 of those nights to take out of those 10,000 we are behind. The other 5,000 is coming from the late Easter, and we can see a slower booking pattern when we have an Easter weekend, which is around week 17, and that's very normal.
However, the week 51, or actually from week 52 up to week 9-10, we have a very strong calendar, and we have a very favorable booking situation, and here we have an increase actually of 13,000 nights, and it's very good this Christmas period. We have from week 52, we have actually 99% occupancy rate that week, and the week one is also very strong, and I will show you that pattern within a couple of minutes. We continue to grow in the retail sector. It has been a little bit slower in the physical stores, and that is of course related to that we were not open this year versus last year, so we are meeting tough figures. However, even though we continue to grow 6%, we also have decided to put some focus, extra focus on lodging and creating more beds and attract more beds going forward.
We have changed in the organizational structure. Lina Gabrielson will now also take lead not only for the hotels, also for the full lodging situation. Very gladly, we will take over the operation of Högfjällshotellet from May 2025, or Högis it's called, and Bürchner family will leave after 35 years, and we will be proudly taking over the operations again from next winter season, mainly, so to say. Glad to also reach close to two million MySkiStar members, and also very proud to achieve the sustainability prize for Hammarbybacken, Stockholm, where we are the first fossil-free ski destination in the world. Then last but not least, a lot of good snow and cold weather. It's great for us to have that, of course. In Åre especially, it's almost dumped with one meter snow the last three days. Extremely good conditions, mainly in Åre.
So again, we welcome all these amazing coworkers and glad to have them in place, and they are now into training and will be fully in charge from this week and onwards, and here now, just to give a show of how this booking pattern looked like, so if you look into last year, week 46, 47, 48, 49, we were open last year, and this year we were not open, and of course, that creates this loss of the nights, so to say, booking nights, objects nights, then week 51 is a different week, calendar week this year versus last year, and then week two has also a different week versus last year, so that's why I think it's important to see the period from week 51 up to week 10 to see the full period.
That's how we now explain that we are in a more favorable situation those weeks. We have week 52, week one, and week two, fabulous booking situation. Last year this was shorter weeks. This year it's full weeks. Full week stay means that we also are selling long weeks and long stay for our guests. Then we have the middle week, so to say, week three to six, which is almost the same as last year, which were very high. Then we have a good week seven, eight, nine, a little bit slower week 10. Then, like I tried to explain, the Easter week, week 16, 17, become very late into the season, and we have a slower booking pattern those weeks. I just want to highlight our retail growth, and it starts to become a sustainable business within the company.
This year we are coming close to SEK 500 million as a turnover. And of course, this starts to become a really interesting business for us. And 50% coming from online business and 50% coming from our physical stores. And really gladly we can see our own brand EQPE continue to grow, and we are growing faster with that brand, and that also, of course, supports our margin journey. And here are the pictures from Hammarbybacken. And I think some people talk about, yes, it's a very small destination, but what I think is really important is all the learnings we have managed to get when we are running the world's first fossil-free ski resort with electrified grooming machines, electrified snow scooters, and also other machines are electrified. And we also buy the fossil-free electricity.
This is helping us and also supporting us for learnings into the other ski destinations. So we continue our journey and also we learn, and when we learn, we can also develop further into this area. And by that, I hand over to Martin, who will now talk a little bit more about our numbers. So Martin, please.
Hello everyone. Yes, we used to have a look at the overview, and the quarter, as you have seen, is more or less in line with last year. So there are not so many adjustments on the rolling 12 months. We continue to have a strong growth in the operating profit, and capital gains are around what we are guiding, SEK 70-100 million. Moving on to the sales in this quarter, we are down 3% compared to last year. Organically, we are down minus 2%.
If you can see here, it comes mainly from the column others. This is mainly part due to partner agreements that we are signing for the winter season. In this year, we have a movement from October, November into December, January on those agreements where we take up the sales. There is no decrease in those kind of sales. It's just movement between two quarters. We shift to a later period there. As Stefan already said, we continue to grow in the retail and shop business. Most of this comes from the online business that is growing SEK 9 million. No dramatic change in the sales during the quarter. Looking at the operating profit, which is SEK 18 million higher than last year, mainly comes from our segment operation of ski resorts. During the quarter, we have been continuing to work with our costs.
So the total other external expenses are SEK nine million lower than last year, mainly due to lower energy and petrol costs for the grooming machines and for the snow making. So last year, we started the winter production of snow almost one month earlier than this year. We continue to invest or making repairs and maintenance on our lifts and our machines and our accommodation. So we are increasing those costs slightly, and we also see that we have increases in depreciation due to prior year's investments. Personnel costs are slightly up, but that's mainly due to the yearly salary increases. Moving to the summary for the quarter, we have been talking about most of the points here, but I want to highlight that we continue to have a strong operating cash flow. We have been focusing on that for the last year, and we continue to see improvements here.
It's mainly from the working capital part, and it's not just one factor that gives this better operating cash flow. We are working both with our inventory, with our suppliers, and with our customers. All in all, we have been able to be more and more efficient in those parameters. That's positive to see that we continue. This also leads to a lower net debt/EBITDA. This year, we closed at 1.7 compared to 2.6 last year. The equity ratio is up to 48%. All in all, we are in a stronger situation this year compared to the same time last year. A slide around our sustainability activities during the quarter. If we start with activity and recreation, this quarter, we announced that we will make an adjustment in the offering.
We expand the offering for free season passes at all destinations to people who are living at our destination. So we raised the age from 15 years to 17 years, and we also include seniors age 70 years and above. This is a positive thing that we launched during the quarter. If we move on to the ecosystem, we are in Sälen collaborating with the region partners to explore future transportation ways, autonomous buses, for example, and things like that. And if we move on to dialogue and interaction, we have during the quarter had leadership training programs, both physical and digital, at our destinations, both in Sweden and Norway.
Thank you, Martin. And I will just try to give you some outlook going forward. And I think we just to show this graph again. And of course, there is very challenging, of course, for you maybe in this call to understand the different periods of minuses and pluses and so on. And that's why we try to be very transparent to show this number that the preseason until week 50 has been much lower in percentage, but in number of nights, it relates to around 5,000 nights. And the same with the period between week 11 to week 18 is also around 5,000 nights in numbers. And then during the other period here, we are in a situation where we are actually up. So we are glad to show you that week 52, 1, and 2, like I said previously, are very strong for us.
There is also the period of time when we have a lot of guests visiting their own homes since we had this perfect calendar for us this year. We feel comfortable. We feel that we have a stable booking situation for this fiscal year in our slopes or in our destinations. If I then look into what we have invested in besides all slopes and grooming machines and lifts, etc., I'm really proud of the development of our team who now take AI into a new level to enhance our guest experiences, actually. We have worked truly with AI-based analysis, and that means that our guests, when they come to the ski lifts, they can clearly see on our screens where there are queues and where there are less queues.
By that, you can choose what lift and slope you would like to go in without needing to queue. So this is really an improved guest experience. This sustainability roadmap we presented two years ago, and we are doing a lot of different things. You could put in a green checkbox on, for example, HVO100. We are working with the GPS positioning to measure the snow depth. We are really securing to have the right amount of snow in the right place. This year, we are actually just opening up our first battery storage investment. We have done that in Sälen. That energy storage will be super inspiring to try and test and see how that will work out this season. If it works out, we could see if we should continue to invest in that type of solution.
Important to continue to work throughout this sustainability roadmap. The same, we continue to work with develop our land areas in-house. Really proud that the team has continued to work to secure that we now also can be able to open up for more constructions since the market has been quite redundant. Now we can see that it's opening up with these interest changes, and that could also we can see that the demand to buy houses in our resorts open up again. If you look into these completed detailed plans right now, we can see that there is now a lot of completed detailed plans. That's why we will now start to take this into the next step and also start to develop both within the company of Skiab as well with the company of SkiStar.
2025, it is 50 years ago since Erik and Mats Paulsson decided to travel up to Sälen, and they planned to buy one cabin for the people in Peab, but they left Sälen with 37 cabins and one ski slope and one lift. That was the starting point of SkiStar. This year, 2025, we will have a lot of celebrations. We will go all in with marketing campaigns. We will do a lot of activities, and we will relaunch this SkiStar Cup. It was actually a guy called Klasse Möllberg who founded the name of SkiStar and also this competition, SkiStar competition. Now we will relaunch that popular one together with a lot of nostalgia and celebrations, so a perfect thing for us to do to drive visitation and sales.
Even those that we have had a tough situation for many households, especially the Swedes, where we have had a high level and high grade of debt. We can see a clear light in the tunnel with these lowered interest rates from the Swedish Riksbank. The message which was sent out today will, of course, continue to help and support our guests to prioritize the ski holiday at our destination. I'm also really glad that we continue to drive this activity together for White Winters since the sustainability agenda will not only be important for us at SkiStar, also at the whole business to be able to travel and go skiing in the mountains. Especially, we can see a potential for doing that in the Nordics.
By that, we finalize our first quarter, which is one of our smallest quarters, but maybe one of our most important since we are now ready to attract and also welcome all guests for this winter season. We open up for questions.
Thank you. To ask a question, you will need to press star one and one on your telephone and wait for your name to be announced. To withdraw your question, please press star one and one again. We will now go to the first question. One moment, please, and your first question comes from the line of Fredrik Lithell from Handelsbanken. Please go ahead.
Thank you. Hello, gentlemen. Hope you are all well. I would like to ask three questions. The first one is if you could elaborate a little bit on international customers, how that growth looks and where they are positioned with their bookings. A little bit more color would be nice. Second question, you will operate Högfjällshotellet from May 2025. What does that change actually mean in terms of revenues and new costs and all that stuff? If you could elaborate on that. And then your 50th celebration, it looks like your marketing budget will boom. How should we trim that into our numbers? Thank you.
Thank you, Fredrik. And we are well. And I will take those three questions since I think they actually are related to my area of profession. So if I look into the international guests, the Danes are increasing with 7%, and the rest of the international guests are increasing with double digits. But to just elaborate on the size, we can see that the Danes will be around 25% of the total number of guests up to this point. And if I cluster the other ones, around 7%. And those are, of course, supporting the growth. And the British holidays will come this year in week 8, and the Danes will come in week 7. But we can see that we have international guests throughout, even during Christmas holidays and even those week 3, 4, 5, etc. So I think it's quite spread out.
But the holiday period for those will be, again, the Brits, week 8, and the Danes, week 7. And so that was that part. Then Högis. It's a very small season this year, but it will cost us around 10 million SEK to operate it from May to August, so to say, in this year, if we take all costs into that consideration. And then the last question was around the marketing budget. We will actually, so to say, more how we talk to our guests will be around the 50 years anniversary. So we are not planning to go bananas in the number of money. It's more about how we will allocate the message. And the message will be around 50 years anniversary and also a lot of nostalgic communication to also support the period from week 11 to week 18, more or less.
That's what we would like to highlight in this call, that we are really satisfied with our bookings between week 52, especially up to week 10. And now we put efforts into fill up the last part of the season. So give you some elaboration of that as well.
Yeah. Could I just have a follow-up on Högis Hotel then? The cost in this fiscal year is 10. But what are your plans for the coming year then? Will you sort of renovate or will you just operate on as it looks now? Or what's your plan?
Very good. Thank you. Very good question. The Bürchner family has done a fantastic job the last 35 years. With all respect for the Bürchner family, we believe that we will run the hotel in the same way as the Bürchner family, meaning that we will be calculating around what we say, Martin, in turnover. It will give us roughly SEK 90 million in turnover with a small profit. It will not give us the highest profit, but it will help us to run restaurants and give us better margin on the totality since we get a larger amount of purchasing power in restaurants, etc., on the totality. A small profit and around SEK 90 million in top line.
Okay. Thank you very much.
Thanks.
Thank you. Your next question comes from the line of Karl Johan Bonnevier from DNB Markets. Please go ahead.
Yes. Good morning, Stefan and Martin. Looking at the opportunity you still have for, say, building extra demand in the late season, I remember last year you were slightly disappointed in how you were able to build it. What lessons did you learn from that? And how have you changed your approach to the end of building end-of-season demand this year?
I continue, Martin. And I believe that a little bit of what Fredrik asked for around the marketing. So we will be much more try to do more attractive offers to our guests and also really focus on this 50 years anniversary. And the 50 years anniversary will be around more activities for our guests and also strive after a good experience visiting us, I must say. So maybe a little bit fluffy answer, KJ, but we have learned that there is a potential, and we will really try to grab that potential, especially around how we will market and create offers.
When you look at the high season period now from Christmas over the spring break or the winter break, it looks to be a fantastic development year on year. Is there any challenges to meet that, say, drive that you have in the high season?
Martin, what should we say there?
We can see, like I said, the pre-season is gone, and that season normally costs a lot to open it. And the number of guests are normally season card owners. So the revenues are, of course, always important, but they are not the biggest chunks, I'd say. But then the calendar around Christmas now will be very favorable for us with the long stay. And that also, we believe that a lot of people owning their own houses will come and stay longer in the mountains. Then during the weeks, in the middle weeks, so to say, we can see that we dropped a bit in the Swedish households there, but there the international guest is supporting us with the bookings.
Now when we see that interest rate is coming down, if we look into the tailwinds in the three months of the bank's lowering, so to speak, we believe that in January, February, we believe that we have a much more favorable situation for the households, both from an interest rate perspective, but also from the tax rate, lowering the tax rate for the income level of our guests, which will be also favorable, we believe, for us. That can also be very helpful for the last part of the season that you see that you get more money in your wallet and you hopefully will spend them in our destinations. We will do everything we can to steal that share of wallet.
Sounds encouraging. Sounds encouraging. I guess you have a solid booking trend to start with to drive that extra demand from. Also, looking at the things you now talk about being complete detailed plans for the exploration operation, what kind of decisions need to happen and what do you need to do to, say, turn those into construction work and have an idea about when you add those projects also to your development pipeline?
We are guiding with this SEK 70 million-SEK 100 million per year, and that is what we still stay with, and I mean, it has been we have been able to transform projects even though that it has been this bad economy, so to say. We did it two years ago. We did it last year, and still, we have plans for this year, and one of our strategy changes we did a couple of years ago was to be much more redacted, so to say, and not force it. We take it in our steps, and we have areas where we now see possibilities into, and those are mainly in Sälen because we also try to focus on where we need more beds, and right now, we need more beds in Sälen because there is a lot of free capacity as a totality.
So that's where we are focusing at this moment. But we also have a lot of land in, for example, in Björnrike, in Tegefjäll, where we could start, and also in Trysil where we could start to manage those projects. But we have said internally that Sälen will be our main priority in short term.
I guess that partly answers my next question. When you're looking at this new organizational structure that you detailed about focusing on lodging and more beds, what is really the outcome you want to strive for there? Is it controlling more of the already available, say, the beds that are at the destination, or is it, yeah, adding new beds, basically?
It is actually three things. One thing is to build more beds at locations where we have potential, like I just mentioned, Sälen. The other thing is that today there is a lot of people who have decided not to rent out their houses, and we really would like to see if we could manage to get one or two or three of those weeks, and especially in times like around Christmas, New Year holiday, or one of the break period, because that is where we really lack beds, those what we are calling cold beds today, to transform cold into warm beds, and then the third thing is that we would like to see if we could take back beds into our booking systems, which today are outside our bookings, for example, in Airbnb or other locations. So those are the three activities we would like to strive after.
Excellent. Well, thank you very much and good luck with the high season.
Thanks.
Thanks.
Thank you. As a reminder, if you would like to ask a question, please press star one and one on your telephone keypad. We will now go to your next question. And your next question comes from the line of Stefan Stjernholm from Nordea. Please go ahead.
Hi there. Most of my questions have been asked, but I have one regarding retail. Retail sales is quite a sizable part of your business now. I think it's around 10%. Can you give us a sense of the profitability? Is it equated to group margin or not?
Martin, what should we say on this one?
We are earning money on our retail business, and it's not the majority of the profit that comes from the retail business, but it's profitable today if you look at both the web and the physical stores together. And of course, we are focusing on growing that business and grow it in a profitable way going forward. And one of the strategies, taking EQPE into our product portfolio, there we have our own brand with higher margins. So that is one way for us to continue to be more profitable going forward in this segment.
What's the share of the EQPE of the retail sales? Is it half of it or?
Now it's around between 20%-25% with the growing number. And then we are selling more during the winter season, so to say. And right now, we start also with a new range with some new segments where we also launch, for example, with a larger segment of gloves, for example, where we have been not so large before. And we're taking a larger part also again with our goggles, which is growing tremendously fast. And I think, not think, half of our sales in goggles coming from EQPE, for example. So it differs from segment to segment. And that's where we're taking big shares in goggles, for example, which is, of course, an important part also with the high margin product.
Yeah. Okay. Thanks. And the final one for me. You're talking about CapEx coming down to normal life level. What's the normal level?
Yeah. I think Martin can give an explanation on that. But I think we have been on a high level because we were underinvested, so to say. And now we try to strive after more cash flow. Martin, can you just elaborate so Stefan can get us?
Yeah. So what we are saying and what we said on our capital market day is that we are financing our investments with our own cash flow. So we should be able to pay the dividend. We should be able to finance our investments with our cash flow. This year, or this year where we are now in, we said SEK 330 million in investments. That was lower, quite much lower than the last year. And that's one of the reasons why we see the effect in the cash flow being so strong on total. And we are able to lower our debt and strengthen our balance sheet. So we will not go up to the SEK 800 million where we were a few years back. We will be lower than that, but maybe not as low as SEK 300 million. So something in between.
Okay. Thank you very much for my questions.
Thank you. There are currently no further questions. I will hand the call back for closing remarks.
So, warm thanks again for listening to us this morning for our first quarter report. And now we are really keen to travel, both myself and Martin, to actually Sälen and celebrate some holidays and work also in our company and meet our guests in the lifts or wherever they come and visit us. So, we're really looking forward for this winter season. So, thank you so much, and we wish you all happy holidays.
Thank you. This concludes today's conference call. Thank you for participating. You may now disconnect.