Scandic’s interim report Q3 2022 – Scandic’s best quarter ever
THIRD quarter in summary
- Net sales rose by 60.5 percent to 5,994 MSEK (3,734), corresponding to an increase of 60.5 percent compared to the third quarter 2021.
- Average occupancy increased to 70.5 percent compared with 55.1 percent during the third quarter of 2021.
- Average revenue per available room (RevPAR) grew to 875 SEK (540) driven by higher occupancy and positive price development.
- Adjusted EBITDA totaled 1,213 MSEK (709). The company’s results were positively impacted by one-off effects of 76 MSEK.
- Excluding IFRS 16, earnings per share totaled 3.23 SEK (1.41).
- Free cash flow was 953 MSEK (547).
- Scandic opened one hotel, the 352-room Scandic Helsinki Hub in Finland. In total, the number of rooms in operation increased by 405 to 55,977.
- Agreement signed for a new 220-room hotel in Ski outside of Oslo, Norway, which is expected to open in 2026.
The period in summary
- Net sales rose by 122.1 percent to 14,002 MSEK (6,303).
- Adjusted EBITDA totaled 2,060 MSEK (-430).
- Excluding IFRS 16, earnings per share totaled 3.56 SEK (-6.40).
- Free cash flow was 1,257 MSEK (-647).
Scandic’s best quarter ever
With continued strong momentum in the third quarter, we are happy to deliver Scandic’s best quarter ever. We have with high efficiency, been commercially successful and captured continued good demand from leisure travelers. We’re also well-positioned in the corporate segment where demand for meetings and conferences has returned. Net sales increased by around 15 percent compared with the same period in 2019, the year before the pandemic, achieving a new record of 5,994 MSEK for a single quarter. Profits also reached a record level and adjusted EBITDA totaled 1,213 MSEK, an increase of almost 50 percent compared with the same period in 2019, giving us a historically strong adjusted operating margin of 20.2 percent. Results for the quarter were impacted positively by non-recurring items of 76 MSEK. Adjusted for these items, the underlying margin was 19 percent, which is more than 3 percentage points higher than for the corresponding quarter in 2019. Free cash flow was also strong during the quarter at 953 MSEK and we continued to reduce our debt level, which at the end of the quarter had returned to a level with a good margin to our debt target.
High demand from corporate customers and leisure travelers
It is particularly pleasing that business travel is back, and in September, demand for meetings and conferences was even higher than during the same period in 2019. Room rates continued to improve in all markets and average revenue per room (RevPAR) increased to a new record of 875 SEK compared with 807 SEK during the same period in 2019. It should also be noted that at the end of the quarter, the number of rooms was around 6 percent higher than during the same period in 2019. As expected, the hotel market remained generally strong during the quarter with high occupancy rates and continued positive price trends. Scandic’s occupancy rate increased from 63.2 percent in the second quarter to 70.5 percent in the third quarter.
High activity in hotel portfolio and focus on growth
During the quarter, we continued to expand our operations in attractive metropolitan areas by opening Scandic Helsinki Hub in Finland. We also launched Scandic Macherei in Munich, Scandic’s fifth hotel in Germany, after the quarter ended. We also signed an agreement for a new 220-room hotel in Ski outside of Oslo which is expected to open in 2026. In total, we will have opened 10 hotels by year-end, and we are very pleased that we were able to carry out these openings in a strong market. We also continue to focus on adding more high-quality hotels to Scandic's pipeline.
Continued positive view for the coming months
The hotel market has recovered rapidly in the past months, and after our record second and third quarters, given current bookings, we anticipate good demand for the rest of 2022. Occupancy is expected to be slightly lower during the fourth quarter, mainly due to seasonal effects, but at continued high average room rates. The measures we implemented during the pandemic have given us a stable base and today, Scandic is more cost-efficient with better underlying profitability and strong cash flow. As always, we are continuing to carefully monitor the world around us and we’re well-prepared for any possible weakening of the economy. I am very proud that Scandic has delivered yet another record quarter, and again, I’d like to extend a huge thanks to all the guests and Scandic team members who made this possible.
President & CEO
This information is information that Scandic Hotels Group AB is obliged to make public pursuant to the EU Market Abuse Regulation. The information was submitted for publication, through the agency of the contact person set out below, at 07.30 CET on October 27, 2022.
For more information, please contact:
Rasmus Blomqvist, Director Investor Relations, Scandic Hotels Group
Telephone: +46 702 335 367
Åsa Wirén, Chief Financial Officer, Scandic Hotels Group
Telephone: +46 706 444 533
The report will be presented in an webcast and teleconference at 09.00 CET today
A presentation of the report will take place at 09.00 CET today, October 27. Scandic’s President & CEO Jens Mathiesen will present the report together with CFO Åsa Wirén in a webcast and telephone conference.
Time: Thursday, October 27, 2022, at 09.00 CET.
Location: Webcast and telephone conference.
Telephone number: SE: +46 8 5051 6386 | UK: +44 20 3198 4884 | US: +1 412 317 6300
Pin code: 2168408#
Please call in five minutes before the start.
Follow the webcast live on this link.
You can also view the webcast at www.scandichotelsgroup.com, where the interim report and presentation will be made available.
Please call in 5 minutes before the start.
You can view the webcast at scandichotelsgroup.com. The interim report and the presentation slides will also be available on the website.
Please join us to listen and ask questions.
About Scandic Hotels Group
Scandic is the largest hotel company in the Nordic countries with a network of about 280 hotels with 58,000 rooms in operation and under development, in more than 130 destinations. The company is the leader when it comes to integrating sustainability in all operations and its award-winning Design for All concept ensures that Scandic hotels are accessible to everyone. Well loved by guests and employees, the Scandic Friends loyalty program is the largest in the Nordic hotel industry and the company is one of the most attractive employers in the region. Scandic is listed on Nasdaq Stockholm. www.scandichotelsgroup.com