Good day, and thank you for standing by. Welcome to SkiStar's second quarter report conference call. At this time, all participants are in a 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 one on your telephone. You will then hear an automated message advising your hand is raised. To withdraw your question, please press star one one again. Please be advised that today's conference is being recorded. I'd now like to hand the conference over to your first speaker today, Stefan Sjöstrand. Please go ahead.
Good morning, everyone, and a warm welcome to our second quarter of 2024-2025 presentation. The presentation will be held by myself and my new colleague, Sara, here, who is our new CFO, starting officially from.
31st of January.
Correct. A warm welcome, Sara, and we will try to guide you through this presentation today. We have an agenda where we'll take you through the quarter, and I will start with some highlights. Sara will continue with the numbers, and we will also end up with an outlook of the rest of the season, but also a little bit about next year then. Let's start with a short introduction, and we have a strong position, and most of you know about this. I take us through our financial targets, which are guiding us throughout both short and long- term. We have an organic growth of 6%, 18% operating margin. We have a leverage of net debt EBITDA of less than 2.5, and then a dividend of 40%-60%. Our sustainability target is connecting to activity and recreation.
We want to reach 7 million skier and activity days. We really would like to go for 50% climate reduction. It is important for us to have a dialogue and interaction with partners, like, for example, railway companies, governments, etc., about regulations. We are happy to follow these important targets. Of course, we work with strategic initiatives, and for us, we have five guiding initiatives, which is something we're striving after. You will see during this presentation that we are following those five ones continuously. It is important to the development of the all-year round operations. We continue to work to strengthen our margin and also continue our growth journey. It is important to increase the number of commercial beds and also secure the sustainable future mountain experiences, as well as normalize investments over time.
Let's go through this quarter, and some of you maybe have seen our report this morning then , and we are really, really glad to report our best second quarter ever. Of course, this is the quarter where we should deliver a strong result. However, we have a very strong result driven by a high interest for skiing holidays. Of course, this calendar effect we had during the Christmas holidays, where a lot of bank holidays supported this long-term stay for our guests. We can also see that this holiday is prioritized among Swedish and international guests. Also, we are really lucky to have the guests spending the time with us at SkiStar.
We also could see that since we are really striving after not only developing SkiStar as a brand, also our all-year round operation, we can see that there is a strong interest also, both from ourselves, of course, but also from others, to bring more beds into these popular resorts because those are the largest ones, and these are the places where you want to stay and where you want to be. We are really glad to actually have 27 all-time high days during this first quarter, which is exceptional, and it has been throughout all destinations. I am extra happy, actually, to have this SkiStar all-record day, the 30th of December, where we actually had almost or close to 80,000 guests within our system. A tremendous good day where normally we have these record days during Easter, but now we had it already before New Year.
What's really happy this quarter is also that we're increasing all revenue streams. We will come back to that later on. Also, since we have been a little bit shy, or I will not say defensive, but since we have had a challenging market within the cost of construction, we have made some decisions to start to build BRF projects in Sälen and Trysil, and we will do that in the company or joint venture company called Skiab. This is the first new construction since 2023. That is very good. The other very positive thing is that we also have decided to add 500 new beds within Sälen on a new land plot, and that is sold to Skiab. That capital gain effect will come into the third quarter, so next quarter.
The decision to start construction has been made, and the construction will start as soon as the snow and the tjäle, we say in Swedish. I do not know that word in English, actually, but the ground when it is possible to start the groundwork. Of course, our sustainability development activities continue, and we were also a participator of the conference in Åre called NoSA two weeks ago, which stands for Nordic Sustainability Arena, where we are really aiming to continue and develop the White Winters . I mean, a quarter like this, like I started, there are high expectations for us to deliver on this quarter, of course. We are very satisfied to show an organic growth of 5% with an increased operating margin of 23.8%. If we clean out the exploitation income, the underlying growth in the ski operation business is even higher.
It's actually 8% with an increased operating margin. That is, of course, very positive to show these numbers. We will try to also be even more transparent going forward to try to separate the property gains versus the ski operations for you all to see this in a more open way. We continue with our digitalization, and we see that the new investments we have made in this queue system, where customers can see on screens or in the app, are extremely positively recognized by our guests. That is why it's important to continue the drive of improving the digital experience for our customers. We have a very solid customer base from Swedish guests, and they continue to come and visit us. There is also a high interest of Danish guests, as well as British, German, and Netherlands guests coming to our destination.
That together supports this record in ski days, where we're ending up in 4.6 million ski days, which is a tremendous number and also puts us into one of the largest operators in the world. Like I said, we increase all revenue streams. One important highlight, I think, is also supporting the ski days, of course, is this transformation to longer stay. This six to eight days ski pass has increased to 53% from 50% the year before. I think that is something very important for us. Those international guests have a tendency to stay longer, which is, of course, extremely positive for us. Retail is a very interesting market for us. Since we started this a couple of years ago, we have had a strong growth. It has slowed down a bit, mainly connected to weather, I must say.
If we look into this industry, we are actually taking market shares, and it is the EQPE brand, our own brand, EQPE, who stands for the largest growth, actually, in this quarter. These international guests, they continue to drive average spend. I think it's important for us to show this graph for all of you to see that the average spend is strong, but the international average spend is even stronger. That is due to international guests buying more products. Versus a Swedish customer who puts in two products into the basket, a Danish or British guest puts in three products into the basket. That, of course, is the difference if you look into the revenues.
I mentioned shortly about the retail growth, and I think it's important for all of you to understand that this has become an important part of our growth journey. We will continue this growth journey. The last couple of years, we have been strengthening our operations. We have been strengthening our presence and strengthening also the way we are marketing our retail operation. It's an important area of our business, and it will continue to be an important area of our business going forward. I mentioned digital engagement, and if we look into this graph, we can see that there is a high digital engagement in the second quarter, where we increased 13% visitation on our digital platforms. However, we can see that we have a slower or slowdown in the conversion rate, and that is due to two things.
One is that there is a challenge for us to fill up the Easter, the end of this season, as well as that the SkiStarshop has been a little bit less visitors or less conversion rate due to this warmer weather, so to say. If we then look into the next slide, I will hand over to Sara, who will guide you through the numbers now.
Yes. Hello. I will guide you through net sales development, followed by net sales per category, and then operating profit development. If we start with net sales development, as Stefan mentioned, we had a good calendar effect that implied three weeks for our holiday guests. In comparison with last year, it was two weeks, and one additional week made a huge difference. However, we had one day less in February in comparison with last year. In total, the calendar effect was a positive one. All-time high during Christmas, nine out of 15 days, and the occupancy rate was high. It almost touched 100% at several destinations during Christmas. The occupancy rate was solid during the winter sport holiday as well. The number of ski days was up 3% year on year, 4.6 million, which is a high number.
As Stefan mentioned, we continue to be an attractive choice for our international guests, and they spend more money. Even if the SEK has been stronger, it is still a quite high margin in comparison with traveling, for example, to the Alps. If we look at the graph, the net sales development, and the last 12 months, we almost touched SEK 5 billion in net sales. If we continue with net sales per category, and this is actually going from SEK 2,285,000,000 to SEK 3 billion, this is for the first half year, the first and the second quarter. If we start with the major uplift, which is related to ski passes, we had a revenue growth of 10%. It is a combination of volume and price. The number of sold skier days, as I mentioned on the previous slide, was up 3% year on year.
If we continue with accommodation, it has a revenue growth of 6%. It is a combination of price, but the number of objects is actually down 3%. We have a positive impact from the mediated accommodation business, which is a fairly large part of the accommodation. Ski rental and ski school continue to increase, 13 million and 7 million up. The retail business is up 22 million. It is online that drives the uplift by 7%. The revenue growth in our physical stores is more or less flat, and it is primarily related to a lower demand for weather-related products due to the warm weather. We still have a high demand for ski-related assortment, skis and shoes, etc. Restaurants are up quite a lot, and it is driven by increased capacity.
We have added new restaurants, for example, at Hundfjället in Sälen, but we have also improved our concept related to restaurants, and that is important. Property development is down 69%, but that is related to capital income and gains in comparison with last year. This is included in our net sales. Last year, we had an income, and this year we have less income. In total, we have a revenue, or we have a capital gain in comparison with last year. We actually had a capital loss. If you just look at the income side, it was a negative effect. In total, we had SEK 3 billion in net sales, which was 5% up. If we exclude the exploitation income or the capital income, it was actually 8% up in our underlying business. That is important to understand that 8% is a significant uplift.
If we continue with operating profit per segment, we have, and this is also the half year, starting with SEK 601 million, moving to SEK 718 million. The majority is related to our ski operations. Of course, we had a solid performance. It was a combination of price and volume, and we had an increase in revenues from all our revenue streams. The property development is up 37%, and that is, as I mentioned on the previous slide, impacted by the capital loss last year and the capital gain this year. That is more or less the development that has happened this year. The operation of hotels benefits from new capacity, the restaurants, but also higher prices. During the second quarter, if I just look at the second quarter, the operating profit amounted to SEK 1.2 billion in comparison with SEK 1.1 billion last year.
That is an improvement with 13%. If I exclude the capital gains, the underlying performance or improvement was 10%. For the first half year, the underlying performance was up 15%. Including the capital gain, the performance was, or the improvement was 20%. Operating profit development, as you can see in the graph, last year we ended up with SEK 740 million, and that included a capital gain of SEK 67 million and an operating profit from our operations with SEK 674 million. If we look at the number for the last 12 months, we have SEK 851 million in total, and that includes revenue or a capital gain of SEK 85 million and operating profit from our operations with SEK 766 million. That implies a margin, operating margin of 7.2%.
As I said before, we have had challenging weather conditions during, especially in January and February, and that has implied that we had to prepare our slopes more than usually during this time of year. That has led to higher costs for electricity and also higher costs for staff. If we take a look at the last 12-month graph of SEK 851 million , we also need to understand that moving forward, the third quarter, we have a late Easter this year, and that will have a negative impact in comparison with last year.
This picture, the seasonality, I included this to, I guess you are all familiar with our seasonality impact, but it's important to understand that the second quarter followed by the third quarter, we should make money in those quarters, and we have done that, and we have had a quite strong performance in the second quarter. The first quarter followed by the fourth quarter are loss-making. We have a huge impact from seasonality. If we take a look at the cash flow situation, and obviously, as we've had a solid performance in the operating profit, we have had a strong cash flow from operating activities during the second quarter. That amounted to SEK 1.4 billion, and that was an improvement in comparison with last year.
If we take a look at the first half year, the cash flow from operating activities amounted to just a little more than SEK 1.7 billion, which was also an improvement in comparison with last year. During the quarter, CapEx was very low. It amounted to SEK 272 million, and accumulated, the CapEx amounted to SEK 209 million. We made a decision early January to invest in a gondola in Trysil, and that is a quite important investment, but also quite expensive. The investment is expected to be around NOK 200 million, Norwegian crowns. We estimate the CapEx for the total year to amount to approximately SEK 550 million. That CapEx also includes approximately SEK 50 million that is related to acquisition. In total, it will be SEK 500 million-SEK 550 million for the year.
The debt structure we had now, the ratio, the net debt situation in comparison with EBITDA is fairly low. It is 0.6, and that is, of course, impacted by operating cash flow that has been strong. We have also been able to reduce our net debt. Interest-bearing debt amounts to SEK 704 million, which is significantly lower in comparison with last year. We need to understand that due to seasonality, etc., and that we will add more investments or more CapEx moving forward, the net debt or the capital structure will increase, and it will not continue to be 0.6. It is a fairly stable or solid number now. If we continue to the summary slide. As I mentioned, we have had a positive calendar effect during Christmas and New Year, and that has contributed to a high customer demand.
All-time high, nine out of 15 days during Christmas holiday, and solid and very high occupancy rates. The warmer weather has had an impact on higher costs for preparation of snow and staffing. The organic growth was strong, underlying 9% for the first half year, and if we exclude capital gains. We have improved the operating margin quite high, even with and without capital gains. Strong operating cash flow driven by increased net sales. The equity-to-asset ratio was also high, 60%, when we exclude the effects from IFRS 16. Low financial net debt due to lower investments, but also, and most importantly, strong cash flow.
Thank you, Sara. I think it's important for all of us to just highlight the importance of sustainability. We have, of course, we are continuing our strong focus within the field of sustainability.
We have now improved our suppliers and secured that now 25% of our suppliers has a climate target, and we will continue that journey. I think it's also important to continue our development within SkiStar's operation of how to become CO2 negative. The area of improvement is continuing. I'm really proud of our investment we have made in electrical vehicles, electrical groomers, and also battery charging, etc., all the way to fulfill our idea of this, say, map of illustrating our impact on the total society within our SkiStar destination. Something also very promising is that we are not alone in this. We are now joining forces within the Global Sustainability Ski Alliance.
Together with other ski operators like Compagnie des Alpes in France or Kitzbühel in Austria, etc., we are joining forces to put in a strong sustainability agenda among other ski resorts to really support the development of how to become even more sustainable together and also put more larger projects in place to also challenge our suppliers within the supply chain. Just as a reminder, we are really happy to continue to work as an enabler of together for the White Winters. This conference in Åre was a great start for that two weeks ago. Now, my friends, I will give you a little bit of flavor of our outlook and just a reminder of our strategic initiatives, and those are the ones we are following.
If we then look at the outlook or take a look at the outlook, I'm really proud to continue our 50-year anniversary. It is actually 50 years ago, Erik and Mats took the car to Sälen, and instead of buying one cabin, they went back with one slope and 37 cabins. That was the starting point of SkiStar. The date, the official date for celebrating that, is in October. That means that we have used this part of the year 2025 to celebrate, and we will continue to celebrate even more during the start of next season, so to say, winter season.
Just to give you a little bit of flavor of how does the rest of the winter season look like, how will our calendar look like, we are struggling a little bit with take up the fight with the warm weather like I have outside today here in Stockholm where we have + 12 degrees Celsius, and people start to look like the opening for summer houses. They would like to go play golf, and they would like to do gardening, and all that competes, of course, with the skiing. If I just look into our ski resorts, they are in a very good, they are very well- prepared for the Easter, actually.
We came home late night yesterday from Trysil, which there was super nice condition, a lot of snow in the slopes, sun was shining, and that's why we really would like to see how we could continue to push the Easter. Week 16 is the Easter period this year. It's the latest period we have Easter, and we are struggling to fill up week 14 and 15, for example. 16 is quite full and good, but 14 and 15 is a challenge for us, and that's why we are a little bit behind the bookings versus last year. What's really positive then if we take a look beyond this winter is that we have went out with the investment in a new gondola in Trysil, and that will be ready for next winter season.
Exactly like Sara mentioned, it's the price flat is high, but it will also give a very fairly and good customer experience. Åre, i t's an area where we have struggled sometimes with the weather and also demanding situations with our chairlifts to open them up because they are very weather sensitive. With this new ski lift in Getvallsliften in Åre, Björnen/Sadeln, will be a tremendous lift for that whole area, actually, because that means that we all days can operate this area to take you into the large ski system into Åre. We will also spicing that up even with more investment in lighting facilities, which will increase the opening times. Today, during the darker period of the year, we open up the ski lifts 9:30 A.M. We closed them 4:00 P.M.
Now we can open them up at 8:00 A.M. in the morning and have them open the full day to 5:30 P.M. , 6:00 P.M . That is, of course, a big improvement for all the guests living in that area. That could also support rent out for cabins in that area, which normally is not the easiest during that time of year. Lastly, but not least, a completely new ski area in Vemdalen, and Hovde Syd, which will be launched next year. We are so glad because this has taken four years for us to work with the authorities and to get this approval. We got everything in place a couple of months ago, and now we are so glad to be able to open this area up for next winter season. That means that we are really open up for some good news.
Of course, we continue also to invest in snow-making systems to secure the White Winters. If I look into the construction projects, we also have decided to do the 500 new warm beds, we are calling them. That means that that is 500 new beds in Sälen, which has been an area where we have had lacking of beds. Now we open up that. That will be very good for us. However, we see we have guide you with the capital gains to be in the range of SEK 75 million-SEK 100 million per year. Now we see that we have some delay in this plan from the municipalities and also that there is a little bit slower in the market.
We will, for this year, we have, what to say, timing effect, and will mean that we will not reach those SEK 75 million this year. We will be below that, just so we are guiding you correctly in that sense. Retail, we continue with the retail development, and we have had some competitions in Trysil. Since there was a generation shift in Jarl's Sportshop , we have decided to make an acquisition of that. That means that we are really strengthening our presence in Trysil within the retail segment as well. Really glad to also again highlight our taking over the operations from Högfjällshotellet i Sälen . We will do that from May. Thommy Backner has been running this hotel for 35 years, and it's not big shoes to fill after Tom's great performance over this period of time. We will do our best to continue.
Also, by having all those international guests coming in to us, we see that this is an excellent place to do some extra booking and opportunities for the international guests, providing Högfjällshotellet, actually. That will lead us up to next winter bookings. We are up 5% for next winter season. That is, of course, something super exciting to present to you. That means that 15% of the next winter season is already locked in, more or less, already at this time of the year, actually. Just to give you a flavor of what we are doing within the development of our destination. The Trysil gondola in the upper left. In the middle, we open up this.
This is a picture from Sälen and a fantastic part of Timmerbyn where we now, where you see some trees in the lower part of this picture where we will open up for a new BRF project. The right corner with a map with a red dotted line showing the new area, Hovde Syd, which will be the new ski area in Vemdalen opening up for in December next winter. Down to the left, we have Trysil Suites where we open up for sale of apartments. 60% of the BRFs are already sold, actually. It is just 100 m above the new gondola entrance. Of course, it's a great location, ski in, ski out.
The last two pictures down to the right are showing Söderåsen where we have now got permission to start construction if we would like to, but still we have not decided how we would like to develop those areas. Of course, we have great plans, as you see on the pictures for that area as well. The development of our destinations continues. I think it is important to show you about this with how it looks like week by week in the bookings in our system, so to say. Here you can see the challenges we have week 13, 14, and 15, especially week 15, the week before Easter. That is why we are down 5%.
If you look into week 16 compared to last year's spring season, Easter week, we are in the same range, you can say, but it is the week before that really takes us down. That is, of course, challenging since we are sitting with the cost for running our ski lifts, etc. We really are in the need of filling the beds. We will do our best to continue to fill our beds as well. Actually, we have a lot of private beds, of course, like we had during Christmas, which will be filled during Easter. That is normally how it will look. Just as a picture, we are extremely proud, of course, to have this unmatchable position within Scandinavia running the five largest ski destinations.
This is by focusing on a year-round operation with strengthening the willingness for others also to invest in these five ski destinations, the willingness of our restaurants to have open and also people who have their own cabins to continue to come and invest, stay at our resorts. I have already mentioned the 50-year love story, and we continue this. We are also taking up a nostalgia collection. I have seen during this week a lot of nice hats with our coworkers and how proud they are if you come to Lindvallen. They are wearing a Lindvallen hat or yesterday they were a Trysil hat. The proudness of our staff wearing this collection is super nice. Of course, we will continue to focus with that for our customers and consumers as well.
Lastly, but not least, mountain holidays in Scandinavia continues to be an obvious choice for many. I think this quarter result has proven that. Also, the bookings for next winter is also showing that. We end up that we say together for White Winters, we join forces and we open up for questions by that. Thank you so much for listening to us.
Thank you. As a reminder to ask a question, you will need to press star one one on your telephone keypad and wait for your name to be announced. To withdraw your question, please press star one one again. We will now take our first question. Please stand by. The first question comes from Karl-Johan Bonnevier from DNB Markets. Please go ahead.
Yes, good morning, Stefan and Sara. Congratulations to a very solid quarter and strong development. Just a couple of questions on the CapEx outlook, the SEK 500 million if you're looking at the pure CapEx. How much of Trysil and the gondola there is included in that and how much is sliding into next year?
This actually, I can answer quickly. It is Trysil and gondola is into that range as well, as well as the Hovde Syd , as well as Getvallsliften . So all these investments are there, [Karl]. This is this year's investment. I think we have been much better by prioritizing our investments, actually, than we have been the last three years, so to say. The projection is much better and the prioritization is much better within our company.
If you look into, say, next year and the coming year, what would you talk about as a maintenance CapEx level going forward? Is around SEK 350 million a good proxy if you don't do these kinds of extra investments?
Yes, the maintenance CapEx is approximately just about SEK 300 million, SEK 350 million. If you add new capacity, then yeah, approximately SEK 500 million in total.
We believe that we will stay in the range of SEK 500 million-SEK 550 million. That is what we say.
We want to include new capacity as well, but the maintenance level is about SEK 300 million .
I understand as a part of the gondola project in Trysil, you are able to develop new areas. Are those the ones that you already now are targeting together with Skiab, or is that additional kind of things coming later?
That is actually additional income later. We have not spoken so much about that. We were a little bit shy maybe in this report, but we have made a very great agreement with the landowners in Trysil. That means that we will continue development of a joint venture with Utmarkslaget in Trysil, who is the owner of the land within the ski lifts operation. We have also made a joint venture with them to develop the area, which is called the Eventyr area in Trysil, where the new gondola will start. There we will start- up with new facilities like toilets, ski shop, but also apartments, actually.
There will be some other areas of development together with them, which we will come back to later. It is a very strong and solid collaboration with them to develop also more beds, actually, in that area.
Sounds very promising. Looking at the Högfjället acquisition, could you give us some ideas what that would mean for your hotel operation in maybe in some sort of financial terms?
We own the hotel since before. We actually have had the ownership of the hotel since a very long time in our books. Now, top line, we say around SEK 100 million in top line, roughly, but very limited profit. It is more top line related rather than the bottom line. We have to work hard to improve our margins.
Sounds like a good thought. One final, if I look at those projects that you are now starting in the exploitation activities, are those ready to come into sales process ahead of next season, or is that the season after where we should look for it?
Which one do you relate to, Skiab or?
Yeah, the ones you now highlight in Sälen and Trysil, the one that comes in the long- term.
Yeah, that will come in. Yeah, Sälen and Trysil, that will come into Skiab's books, meaning that we have 50% gains of that since it is in Skiab's books. We see that Trysil will come in next year, actually. The Timmerbyn in Sälen next year and the year after, I must say, because that one we haven't started to sell yet. Trysil is going tremendously fast, actually, to sell out that BRF.
Yeah, I can imagine. Thank you very much and all the best out there.
Thank you.
Thank you. As a reminder to ask a question, you will need to press star one one on your telephone keypad and wait for your name to be announced. To withdraw your question, please press star one one again. As there are no further questions on the phone line, I would now like to hand back to the room for any closing remarks.
If there are no more questions to us, we would like to say a warm thank you for listening to us. I wish you all a great end of this winter season. I hope to see you in the slopes because me and Sara, we will join the nice weather and snow conditions in the Easter.
Absolutely.
Warm thanks, everyone.
Thank you.
Ladies and gentlemen, this concludes today's conference call. Thank you for participating. You may now disconnect.