- Net sales rose by 3.1 percent to 5,871 million SEK (5,693). Easter fell in March which is why the quarter is not fully comparable with the second quarter 2023. Calendar effects are estimated to have positively impacted net sales by 2-3%
- Average occupancy rate increased to 64.0 percent (63.0).
- Average revenue per available room (RevPAR) went up to 871 SEK (828).
- Operating profit totaled 927 million SEK (833).
- Adjusted EBITDA was 841 million SEK (772).
- Excluding IFRS 16, earnings per share equaled 2.00 SEK (1.84).
- Free cash flow was 463 million SEK (664).
- Interest-bearing net debt/adjusted EBITDA LTM, amounted to 0.7x (0.3x excluding the convertible loan).
Second quarter in summary, January 1 – June 30, 2024.
- Net sales rose by 0.7 percent to 10,290 million SEK (10,218).
- Average occupancy rate was 58.0 percent (58.3).
- Average revenue per available room (RevPAR) went up to 745 SEK (728).
- Operating profit totaled 1,053 million SEK (1,032).
- Adjusted EBITDA was 874 million SEK (942).
- Excluding IFRS 16, earnings per share equaled 1.07 SEK (1.18).
- Free cash flow was -270 million SEK (306).
Events during the period
- Convertible bonds totaling 215.0 million SEK were pre-converted, resulting in an increase of 4,958,244 shares.
Events after the reporting date
- On July 4, Scandic signed an agreement for a new 176-room Scandic Go in Gothenburg and a new 100-room Scandic Go in Umeå.
- On July 1, Scandic signed an agreement for sustainability-linked long-term financing. The refinancing will provide Scandic with robust and flexible financing tailored to the company’s growth strategy and strong financial position.
- Convertible bonds totaling 315.1 million SEK were converted early, resulting in an increase of 7,266,712 shares.
CEO’S COMMENTS
“Scandic delivered a good quarter with improved results and higher profitability. We’re maintaining a high pace to grow the hotel portfolio and strengthen ourselves even more commercially. Bookings are good, in line with last year, and with a more stabilized economy in the Nordics, we have a positive outlook on market development.”
Scandic delivered a good quarter with improved results and higher profitability and kept a high pace to grow the hotel portfolio and drive commercial development. We completed the implementation of Oracle Hospitality Cloud at all of our hotels before the summer, and we have several exciting ongoing initiatives for our loyalty program as well as our website and app, which will create additional value for guests.
Scandic Go continues to expand according to plan, and after the end of the quarter, we signed agreements for two new hotels in Sweden. In Gothenburg, we will open a hotel with 176 rooms, and in Umeå, a hotel with 100 rooms is planned. Both hotels are conversions of office buildings with a planned opening in 2026. The sentiment among property owners has improved and there is particular interest in converting office buildings, which suits the Scandic Go brand well. At the beginning of June, Scandic Södra Kajen reopened with 323 rooms in Värtahamnen, Stockholm. Värtahamnen is one of Stockholm’s largest urban development projects, and the hotel underwent a complete renovation and an extension to meet higher demand. Preparations for the opening of our second Scandic Go hotel are also in full swing. The hotel, which is centrally located in Stockholm’s Kungsholmen district, will open in early October with 234 rooms.
Market development during the quarter was stable with good demand and somewhat increasing price levels. Lower inflation and the likelihood that interest rates have peaked are creating more predictability for households and companies that continue to prioritize travel, experiences and meetings. Compared with last year, growth during the quarter was positively impacted by the early Easter holiday and adjusted for calendar effects, growth was marginally positive. Development in Finland was impacted by the strike in early April. In addition, Finland faced a difficult comparison quarter due to the Hockey World Championship that was held in May last year. Demand in Sweden was boosted by events such as the Taylor Swift concerts in Stockholm and the Eurovision Song Contest in Malmö, but it was also impacted by a weak event calendar and increased capacity in Gothenburg. In Norway, development was good even though demand for meetings and events was somewhat lower than last year. However, current bookings are good in Norway for both leisure and corporate travel.
I’m pleased with our performance, and even with the higher activity level within Scandic compared with last year, adjusted EBITDA improved and amounted to 841 million SEK (772), corresponding to an operating margin of 14.3 (13.6) percent. The higher profitability is mainly a result of good cost control and improved efficiency.
It is gratifying that we have now refinanced our loans and secured long-term financing that reflects our growth ambitions and strong financial position. The new credit facility is sustainability-linked, spans three years (with the possibility to extend for two years) and provides even greater flexibility to handle the different scenarios when the convertible loan matures in October. On the reporting date, about 532 million SEK of the convertible loan had been converted early, and including our buyback last year, the outstanding loan amounted to approximately 678 million SEK.
Based current bookings, we anticipate a continued good summer and a positive start to the conference season in the fall. For the third quarter, we expect occupancy rates in line with last year and slightly higher price levels. Household demand for travel and leisure activities remains high, and a more stabilized economy in the Nordics is paving the way for continued positive development in the hotel market.
Jens Mathiesen
President & CEO
