Third quarter in summary, July 1 – September 30, 2023

  • Net sales rose by 5.2 percent to 6,307 million SEK (5,994).
  • Average occupancy rate was 71.0 percent (70.5).
  • Average revenue per available room (RevPAR) went up to 933 SEK (875).
  • Operating profit totaled 1,251 million SEK (1,232).
  • Adjusted EBITDA1) was 1,173 million SEK (1,213).
  • Excluding IFRS 16, earnings per share equaled 3.04 SEK (3.23).
  • Free cash flow was 899 million SEK (953).
  • Interest-bearing net debt/adjusted EBITDA amounted to 0.8x (0.1x excluding the convertible loan).

Summary of the period, January 1 – September 30, 2023
 

  • Net sales rose by 18.0 percent to 16,525 million SEK (14,002).
  • Average occupancy rate increased to 62.6 percent (57.9).
  • Average revenue per available room (RevPAR) went up to 797 SEK (678).
  • Operating profit totaled 2,283 million SEK (1,969).
  • Adjusted EBITDA1) was 2,115 million SEK (2,060).
  • Excluding IFRS 16, earnings per share equaled 4.29 SEK (3.56).
  • Free cash flow was 1,204 million SEK (1,257).
  • Interest-bearing net debt/adjusted EBITDA amounted to 0.8x (0.1x excluding the convertible loan).

1) Earnings before pre-opening costs, items affecting comparability, interest, taxes, depreciation and amortization, adjusted for the effects of IFRS 16.
 
CEO’S COMMENTS

“I’m pleased with the strides we’ve been making to further increase growth and how we’ve become a more efficient and profitable Scandic. Demand is good and we’re pacing towards another strong full year.”

We have delivered another record-breaking quarter and Scandic is standing stronger than ever. Scandic is continuing to make progress in increasing growth and has gradually become a more efficient and profitable company. With strong cash flows and historically low indebtedness, we are maintaining a high pace in developing Scandic to leverage all opportunities to further consolidate our leading position in the Nordics.

Bookings from leisure travelers were high during the summer and the important season for corporate guests and meetings has gotten off to a good start. The hotel market is demonstrating resilience against high inflation and interest rates, and hotel stays, and travel continue to be prioritized both for business and pleasure. Both the number of room nights sold, and occupancy rate increased while prices continued to develop positively. This resulted in Scandic’s highest RevPAR ever and net sales reached an all-time high level of 6.3 billion SEK. Room revenue is developing positively, and, in our F&B business, we have improved profitability by continuing to optimize pricing, purchasing and efficiency. Adjusted EBITDA was 1,173 million SEK, corresponding to a margin of 18.6 percent. Excluding non-recurring items, this is our best adjusted operating profit ever. With a strong financial position, we are continuing to invest in developing Scandic.

We are now focused on growing our hotel portfolio with a stronger organization and intensified cooperation with property owners. During the quarter, we signed an agreement to open a Scandic hotel and a Scandic Go with a total of 459 rooms in the Garden Helsinki multi-functional event arena in Helsinki, Finland. The hotels are expected to open in 2028 and will be a milestone in our growth strategy for the Helsinki region. To capture the growing demand within the upscale segment, we expanded our Signature Collection by adding two hotels in Norway and Denmark, which were already part of our pipeline. At the beginning of July, we signed an agreement for a new Scandic Go with 221 rooms at Fridhemsplan in Stockholm. We also opened our first Scandic Go in Stockholm with great success and interest from guests and property owners. This creates good conditions for our growth ambitions in the economy segment.

We are also working at full speed to implement the complete cloud-based IT solution Oracle Hospitality OPERA Cloud. Using a shared cloud-based platform will create a new common way of working for Scandic and connect all hotels and central functions. Implementing the platform will enable an even better guest experience and higher efficiency through, for example, better management, booking and pricing. Investing in our digital development is an investment in the future where we see excellent opportunities over time to exploit more economies of scale and increase our growth and profitability. Preparations for the implementation started last year with the ambition to implement and use the solution at all hotels and in most central functions during the first half of 2024. 

I am proud to report a strong quarter for Scandic and that our focus on efficiency is delivering results. Demand from business travelers and meetings is good, and we are on track for another strong full year. For the fourth quarter, we expect occupancy at par with the same period last year at a higher average price per room.

Scandic is stronger than ever, and I am looking confidently into the future as we continue to work to create even higher guest satisfaction, growth and profitability. Again, a big thank you to all our guests and team members who have made this possible.
 
Jens Mathiesen
President & CEO