Third quarter in summary
- Net sales rose by 22.6% to 4,874 MSEK (3,974), driven by more rooms in operation, including the acquisition of Restel, as well as positive currency effects. For comparable units, growth in net sales was 0.3%.
- Adjusted EBITDA increased to 736 MSEK (622), corresponding to a margin of 15.1% (15.7).
- Restel contributed 84 MSEK to adjusted EBITDA corresponding to a margin of 14.7%.
- Earnings per share amounted to 3.83 SEK (3.65). Excluding the effect of finance leases and currency effects from the revaluation of loans, earnings per share totaled 3.89 SEK (3.66).
- Agreements to acquire a 178-room hotel in Helsinki that will open in 2020 and a new hotel in Trondheim with about 425 rooms scheduled to open in 2022.
- A number of sustainability initiatives were launched in the quarter, including Scandic joining the International Tourism Partnership (ITP) to support the hotel industry’s efforts to meet the UN’s Sustainable Development Goals.
January – September in summary
- Net sales rose by 23.7% to 13,412 MSEK (10,839). For comparable units, net sales were up 1.3%.
- Adjusted EBITDA was 1,469 MSEK (1,237), corresponding to a margin of 11.0% (11.4).
- Restel contributed 123 MSEK to adjusted EBITDA during the period corresponding to a margin of 7.7%.
- Earnings per share amounted to 4.95 SEK (5.33). Excluding the effect of finance leases and currency effects from the revaluation of loans, earnings per share totaled 5.09 SEK (5.55).
- Integration costs for Restel totaled 112 MSEK. Excluding these costs, the adjusted earnings per share increased by around 7%.
CEO’s comments in summary
Adjusted EBITDA continued to improve during the quarter and we did also report an increase in earnings per share. We are pleased to see positive development of our German hotels and the continued improvement of the market balance in Stockholm city during the quarter.
During the third quarter, increased tourism combined with warm weather and the weak Swedish krona helped drive demand, especially in July and August. At the same time, we are seeing signs of increased competition in some of our markets which had a dampening effect on underlying growth in the quarter. Net sales for comparable units grew marginally during the third quarter, increasing by 1.3% during the first nine months of the year.
During the quarter, we strengthened our hotel portfolio by adding two attractive and centrally-located hotels. In early July, we opened the classic Hotel Norge by Scandic in Bergen as a signature hotel and in September, Scandic Kødbyen opened in Copenhagen’s meatpacking district. At the same time, we continued to invest in our existing portfolio. We now have a pipeline of about 5,300 rooms, corresponding to about 10% of our current hotel portfolio.
Restel’s contribution to EBITDA was higher than in the second quarter, mainly because the summer months are the strongest for many of these hotels. Since the Restel transaction was completed, we have been prioritizing integration, rebranding and coordinating support functions and we have already seen some positive effects from cost synergies. The first phase of the integration is finalized and we are now increasing the commercial focus for the Restel hotels in line with our ambition to strengthen revenues when the hotels are able to take full advantage of Scandic’s distribution capacity.
Scandic has a flexible cost structure with proven ability to adjust costs to changes in the market conditions. We see increased competition in several destinations and we are constantly working to ensure we remain competitive and efficient. For the fourth quarter of the year, we expect continued strong sales growth driven primarily by Restel while like for like sales is expected to be slightly lower than the corresponding quarter last year.
President & CEO
Report presentation October 25, 2018 at 09.00 CET
A presentation of the report will take place at 09.00 CET today, October 25. Scandic’s President & CEO Even Frydenberg will present the report together with CFO Jan Johansson in a webcast and telephone conference.
Details for participation by telephone: SE: +46856642664, UK: +442030089808.
Please call in 5 minutes before the start. The presentation will be held in English.
You can view the webcast at www.scandichotelsgroup.com. The interim report and presentation slides will also be available on the website.
For further information, please contact:
Henrik Vikström, Director Investor Relations
Telephone: +46 70 952 80 06
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 above, at 07.30 CET on October 25.
Scandic is the largest hotel company in the Nordic region with 16,000 team members and a network of around 280 hotels with about 55,000 hotel rooms in operation and under development. Scandic Friends is the biggest loyalty program in the Nordic hotel sector. Corporate responsibility has always been a part of Scandic’s DNA. Since December 2, 2015, Scandic has been listed on Nasdaq Stockholm. www.scandichotelsgroup.com