Good morning, and thank you for joining SOT's presentation for our second quarter results. I'm Sondre Gravir, the CEO, and with me today I also have Cecilie Elde, our CFO. And as usual, we will follow up this presentation with the team's Q&A session at 10 o'clock. You will find the link and the practical details in the stock exchange release published earlier this morning. Before we go into the quarter, a short reminder of what Sats is for those of you who are new to the story. We operate 270 clubs across the Nordics with 744,000 members and 10,000 employees, which makes us the clear number one in our region. Our footprint is built around the large city clusters, Oslo, Stockholm, Helsinki and Copenhagen, where scale gives us both a better product for members and better economics for us. The value creation shows up in the earnings profile. Comparing to 2023, we have delivered 19% CAGR on EBITDA and 30% CAGR on EBIT. Earnings per share is up from Nook 1.10 to Nook 2.62 on the last 12-month basis, representing CAGR of 42% since 2023. This development is driven by our member engagement with 130,000 daily workouts and a strong product offering with 1,800 daily group training classes. Turning into the quarter itself, the headline is that the operating model continues to work exactly as intended. Member activity keeps growing. Workouts are up 3% on a member base, up 1%. And I would remind you that we are now comparing against quarters that were already very strong in terms of member engagement. Revenues are up 3% reported and 7% currency adjusted, where the main driver is ARPA, which is up 6% currency adjusted on pricing and product mix. The flow through to earnings is what we want to highlight. With cost growth held at 4% currency adjusted, EBITDA is up 18% and EBIT is up 23% currency adjusted, and both margins expand by more than 2 percentage points. That translates into a net profit of NOC 196 million or NOC 1.0 per share and free cash flow of 602 million over the last 12 months. On distributions, the board has resolved a dividend of NOC 0.72 per share for the first half of 2026. together with gross pay buybacks of knock 318 million that takes the total h1 payout ratio to 152 percent. Then let me spend a moment on activity because this is the leading indicator for everything else in the P&L. As I said, workouts are up 3% and unique visitors are up 2% against a comparable quarter that was already on a high level. Group training is again the strongest engine. Group training workouts are up 5% and unique participants up 7%. The fact that the unique participants grow faster than the workouts is the important detail. It means that the growth is not only existing enthusiasts training out and working out even more. It's driven by new members that are starting to use our fantastic group training product. And that matters commercially because engagement is what carries members through the year. It supports retention, it supports membership growth, and over time it's what allows us to keep lifting the average revenue per member. Then moving on to expansion, where I want to explain the numbers a bit in detail. We end the quarter, as you see, with 270 clubs, and based on the current pipeline, And 2026 will show a net reduction of three clubs. That is a function of a handful of exits we have chosen to make, as well as the time it takes to build a pipeline and a selective approach with quality over quantity. It is not a result of a lowered ambition when it comes to club expansion. At the Capital on Markets Day a year ago, we guided on an ambition of opening 8 to 12 new clubs per year, a balanced growth, and this ambition remains. The committed pipeline at the moment is 13 new clubs through 2028, with the majority in Norway. And we have several very interesting and ongoing dialogues on more clubs, but the agreements are not signed yet. Hence, they are not included in this list as these are only committed new openings. So in other words, we have the balance sheet to move quickly once the pipeline matures. What we will not do is to compromise location quality just to hit a number. Expansion and shareholder returns are not competing priorities for us. And this slide is the evidence for that. The policy is unchanged. Leverage, we have guided to be in the lower end of the 1.5 to 2 times range, and more than 50% of annual net profit returned through semi-annual dividends and periodic buybacks. That was the financial guidance we gave on the Capital Markets Day last year, and it remains. Looking back, we distributed NOC 1.30 per share in dividend for 2025. We have repurchased 7.5 million shares for NOC 380 million during the first half of 2026. 4 million shares were cancelled in the quarter, and of the 6.4 million Treasury shares held at the reporting date, 2.5 million are approved for cancellation. And looking forward, the H1 dividend of NOC 0.72 per share will be distributed in August, and we will continue periodic buybacks with the emphasis on the leverage target range. So this is a policy we have demonstrated in practice and we will continue to deliver on. And with that, I leave it over to the Q2 financial section and Cecilia.
Thank you, Sandra, and good morning, everyone. This was another quarter where the operating model did its work. So let me briefly sum up the financial picture before we go into the drivers. The pattern in the quarter is simple. Revenue growth well ahead of cost growth, and every profit line grows faster than top line. Cash followed earnings, and even in a seasonally weak cash quarter, and leverage remains below our target range. And one note before we start. reported figures are held back by weaker Swedish and Danish kroner and a weaker euro, so I will refer to currency-adjusted growth where relevant. So let me take you through the drivers, starting with members. We ended the quarter with 744,000 members, up 1% year over year, despite three fewer clubs in the portfolio. Net member development in the quarter was minus 25,000 compared to minus 19,000 in the same quarter last year. This was expected, and we also flagged it already in the Q1 presentation. The main explanation is the strong membership intake early last year, combined with a campaign structure that shifted churn we would normally see in the first quarter into the second quarter this year. Churn outside of this group was stable, so this is a cohort effect and not a broad weakening of retention. In addition, we had two club closures in the quarter compared to one opening and one closure in the last period last year. One of the closed clubs, a fresh fitness club, will reopen as a such club in the third quarter. And importantly, members per square meter continue to improve, up 1.4%, and we are serving more members with less space, which supports both margin and return on capital. And the underlying member development remains healthy in line with our expectations in the quarter. Then over to revenues. Total revenues grow 3% reported and 7% currency adjusted to $1.4 billion. Pricing is the main driver this quarter. RFM grew 6% currency adjusted, driven by the annual price adjustments, and by new members increasingly choosing broader memberships with group training included. Volume contributed as well, with the member base up 1% on a smaller club portfolio. Other revenues also grew 7% currency adjusted, driven by more personal training and retail sales. And I will come back to the related direct cost on the next page. Reported growth in Denmark is held back by the VAT change, which masks the underlying development. So the remaining markets grew 7% to 8% currency adjusted. And I can add that the Danish VAT effect is smaller on profit than on revenue, since it's partly offset by higher VAT deductions on the cost side. The Danish country EBITDA is actually improved by 20% currency adjusted in the quarter. And in sum, revenue growth is driven by price and product mix on a stable member base, which is high quality growth. On cost, we continue to see a well-controlled development. Total operating costs were flat in reported terms and up 4% currency adjusted. Two things help the reported cost line. We operate three fewer clubs than a year ago, and in Denmark, the VAT change gives us higher VAT deductions on cost. So even adjusted for the smaller portfolio, the underlying discipline holds. Club OPEX grew with only 2% currency adjusted, despite continued extra costs for group training, also in this quarter, which means like-for-like cost growth per club is below wage inflation. Overhead increased slightly, driven by the previously communicated costs related to the IT security incident last quarter. Direct cost grew 10% currency adjusted, and this is a variable cost that follows personal training and retail revenues so it reflects higher activity and not higher prices. And as we have communicated earlier, part of the cost growth is deliberate. We have continued to invest in the group training offering with more classes and instructor capacity. This adds cost but it is exactly what drives the 5% growth in group training workouts and the 7% increase in new and unique participants that Sondra showed earlier. So over the last 12 months, total costs are up 5% currency adjusted, reflecting the same drivers plus continued group training investments. And a general point on how to read our cost base. Single quarters move with the timing of projects and activities. The 12-month trend is a better measure of cost development, and that trend remains well below our revenue growth. So overall cost growth remains disciplined and concentrated where it supports revenue. Now putting revenues and cost together, every profit line grew faster than top line this quarter. EBITDA before IFRS 16 grew 18% currency adjusted to 313 million and EBIT increased 23% to 260 million, with margins up 2.3 and 2.6 percentage points, simply because 7% revenue growth met 4% cost growth. The improvement is not carried by one market alone. Country EBITDA margins were up in Norway, Sweden, and Denmark. And net profit came in at 196 million. Earnings per share reached one Norwegian krona, up 25% reported and 27% currency adjusted ahead of profit growth because the share buybacks also have reduced the share count. On a 12-month basis, EBTA before IFRS 16 is now standing at 946 million, moving towards our midterm ambition of 1.1 billion. And this is the mechanics of our operating model with a high share of semi-fixed costs, moderate revenue growth that translates into strong earnings growth. Turning to capital allocation, total capex in the quarter was 59 million, of which 56 was relative to upgrades and maintenance. Maintenance capex is temporarily low and it reflects timing of projects, not a change in ambition. We still target around 5% of revenues annually. It's worth repeating that upgrades and maintenance capex is not only pure maintenance. It also includes growth investments in the existing club portfolio, which has been and will continue to be an important growth lever for us. On expansion, as Sandra went through, the pipeline has strengthened further. We now have committed a pipeline of 13 new clubs throughout 2028, with the majority located in Norway. Several processes are in the final stages, and this supports our confidence in reaching a run rate of 8 to 12 new clubs per year from 2027. We maintain strict investment discipline, prioritizing investments based on club quality, competition and our cluster strategy. Then to cash flow. Free cash flow was 100 million in the quarter and 602 million over the last 12 months. EBTA converted to operating cash flow at 65% in the quarter and 82 on a 12-month basis. The second quarter is seasonally weakest for working capital, mainly due to the settlement of holiday pay in Norway, and this is a timing effect that reverses over the year. In addition, taxes paid in the quarter include the main part of this year's tax payments. We therefore expect limited cash tax outflow for the remainder of 2026. In other words, the underlying cash generation is stronger than the quarterly figure alone suggests, and the second half should be seasonally stronger. Overall, EBTA continues to turn into cash at a high and predictable rate, and this is what funds both expansion and shareholder distributions. Finally, the balance sheet. Net debt was just below 1.1 billion at quarter end, with a leverage of 1.1 times, which has been flat across the last three quarters. This is below our target range of 1.5 to 2 times, even after returning 164 million to shareholders through net share buybacks in the quarter. Liquidity remains solid at 1.3 billion, including 326 million in cash. During the quarter, we also extended the revolving credit facility by one year, moving full maturity to July 2029. This secures long-term financing on good terms and with a single covenant at 3.5 times net debt to EBITDA before IFRS 16 against R1.1, so the headroom is ample. With leverage below targets, we have balance sheet capacity yet to be put to work. Club expansion and shareholder distributions remain the priorities for that capacity. The dividend for the first half of 0.72 Norwegian krona per share will be distributed in August, and we will continue with periodic share buybacks with emphasis on the leveraged target range. And with that, I will leave the word back to Sondre for Outlook.
Thank you, Cecilia. With the quarter covered, let me close off with the Outlook. If there is one thing I would like you to take away from today, it is the predictability of our business. Our operational quality, our commercial delivery, and financial results have been lifted in small steps, quarter by quarter, and we have delivered consistently on our targets. That track record is what gives us the confidence in continued strong operational and financial development. The strategic focus stays on the core and on keeping the performance cycle, continued investment in the product offering, and better asset productivity across clubs and employees as we leverage scale and utilization. And on capital, as Cecilia mentioned, we remain disciplined on both OPEX and CAPEX, balancing cost control against the investment that drive growth. And on expansion, the ambition remains to open 8 to 12 new clubs per year with the emphasis firmly on quality over quantity. And with that, we're running off today's presentation. Thank you for listening. And I really hope to see you in one of our clubs very soon.
