SATS, which runs 274 clubs in Norway, Sweden, Denmark and Finland, increased revenues in Q2 2024, thanks to product improvements following investment and price increases.

SATS’ vision is to create fun, workout spaces which are welcoming to everyone, flexible memberships that offer a number of options and are reasonably priced for the quality of the offering. Its brands are SATS, Elixia, Fresh Fitness, SATS Yoga and SATS Online.

The company’s strategy, unveiled in February 2023, to pause expansion and focus on economic improvements has paid off.

Revenues for Q2 were up 5 per cent to NOK1,266 million (€107.7m, £91.4m, US$119.9m). Operating profits increased by 7 per cent, from NOK 201 million (€17m, £14.5m, US$19m) in Q2 2023 to NOK 216 million (€18m, £15.6m, $20.4m).

Eight per cent more classes are being offered, which has led to an 8 per cent increase in workouts per members, and a total number of 11 million workouts being undertaken. The membership base also increased by 4,600, from Q2 2023, to 719,000.

“We’re proud to present record-high levels of workouts and financial results for the sixth quarter in a row,” says Sondre Gravir, CEO of SATS. “The financial improvement over the past few years is a result of strategic and continued investments in our product offering.

“Our current financial position enables us to balance continued investments in our club portfolio, expansion and at the same time start with dividend payments and share buybacks. We’re eager to maintain our current momentum.”

Six months ago, SATS announced it would target a long-term leverage ratio of 1.5x – 2x and it now stands at 1.7x and is expected to lower further this year. There is the intention to distribute at least 50 per cent of net profit as a combination of share buybacks and semi-annual dividends.

With the SATS and the Fresh Fitness brands, Norway is the biggest segment of the group, with 117 clubs. Although some clubs were closed as part of the portfolio optimisation strategy, the membership base has still grown by 5,000 since Q2 2023. Overall, Norway saw a 6 per cent increase in total revenues to NOK 573 million (€49m, £41m, $54m).

Sweden is the second largest territory with 244,000 members. Total revenues increased by 4 per cent to NOK 427 million, (€36m, £30.8m, $40m), driven by increased member revenue.

The Finnish clubs operate under the Elixia brand, and are the market leader in a highly fragmented market. The member base and number of clubs have remained the same since Q2 2023. Total revenues for the quarter increased by 5 per cent, driven by membership revenues.

SATS Denmark has 29 clubs in the Copenhagen area, the member base has been flat but revenue per member has increased by 6 per cent.

Having strengthened the product offering, which has grown revenue per member, the company says it still has untapped potential to optimise the space and equipment in its clubs for overall operational efficiency. This has been identified as a key driver for improving financial performance.

Going forward, a balanced approach to expansion will be taken, as a robust balance sheet and strong liquidity is prioritised to ensure financial stability and flexibility. In July, SATS signed a new NOK 2,500 million (€213m, £180m, $237m) unsecured multi-currency revolving credit facility which will be used to refinance its existing credit facility and for general corporate and working capital purposes.