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• Net Sales Growth: Increased by 3% with organic growth close to 4%.

• Adjusted EBITDA: SEK101 million, up from SEK33 million in the same quarter last year.

• EBITDA Margin: Improved to 2.2% from 0.7% last year.

• Occupancy Rate: Scandic's occupancy rate was 55.1%, slightly higher than the market average of 54.4%.

• RevPAR Growth: Increased by 5.8% year-on-year, 6.7% at fixed currency rates.

• Net Debt: SEK998 million with a leverage ratio of 0.4 times.

• Dividend and Buyback: Extra dividend of SEK550 million paid in December; SEK300 million buyback concluded in March; planning for an ordinary dividend of SEK570 million and a new buyback program of SEK500 million.

• Warning! GuruFocus has detected 5 Warning Signs with FRA:10H.

Release Date: April 15, 2025

For the complete transcript of the earnings call, please refer to the full earnings call transcript.

Positive Points

• Scandic Hotels Group AB (FRA:10H) reported a solid first quarter with net sales improving by 3% and organic growth close to 4%.

• The company achieved an adjusted EBITDA of SEK101 million, up from SEK33 million in the same quarter last year, reflecting improved efficiency and cost control.

• Occupancy rates across the Nordic countries were higher or on par compared to the same period last year, with Scandic's occupancy rate slightly above the market average.

• Scandic signed an agreement for a new hotel in Berlin, expanding its presence in Germany to nine hotels with close to 3,000 rooms.

• The company is launching new digital initiatives, including a new website and app, and enhancing its loyalty program through a partnership with SAS, which is expected to drive future growth.

Negative Points

• Scandic's average room rate declined slightly compared to last year, particularly due to weak price development in Finland.

• The company is mindful of ongoing geopolitical tensions, which could potentially impact its markets, although no immediate effects have been observed.

• Central function costs were high in Q1 due to investments in digital initiatives, with expectations of cost pressures from salaries and inflation.

• The Finnish market remains a weak link, with new capacity in Vanta putting pressure on rates, although there are positive signals in other areas.

• Restaurant and conference revenues were flat year-on-year despite increased occupancy, reflecting ongoing efficiency measures and selective business choices.

Q & A Highlights

Q: You mentioned expecting prices and occupancy rates to increase in Q2. Considering Easter is in Q2, wouldn't the market need to improve significantly to compensate for events like Taylor Swift last year? A: Yes, while Taylor Swift was in Stockholm last year, Gothenburg had no events, making it weak. This year, both cities have events like the World Cup in hockey and concerts. Finland is also improving, and Norway had its best-ever Q1 result. Overall, we expect Q2 to have increasing room rates and occupancy.