First quarter in summary
- Net sales rose by 7.3% to 4,066 MSEK (3,791). Organic growth was 4.7% while sales for comparable units grew by 2.5%. More rooms in operation contributed with 2.2% to sales growth.
- The 2019 Easter holiday fell in April, which is why the quarter is not fully comparable with the first quarter 2018. Calendar effects are estimated to have impacted net sales positively by 3 to 4% due to the late Easter.
- Adjusted EBITDA increased to 160 MSEK (115), corresponding to a margin of 3.9% (3.0).
- Divestment of Scandic Hasselbacken in Stockholm for 230 MSEK. The capital gain of 182 MSEK is reported as an item affecting comparability.
- Earnings per share amounted to 0.35 SEK (-1.39). Excluding effects from finance leases, earnings per share totaled 0.87 (-1.31).
- Net results for the quarter were positively impacted by items affecting comparability, mainly attributable to capital gains from the sale of Scandic Hasselbacken. Excluding items affecting comparability and the effect of finance leases, earnings per share amounted to -0.79 (-1.13).
CEO’s comments in summary
Demand for hotel nights continued to grow in our markets in the beginning of the year, but increased capacity growth in some destinations had a dampening impact, especially in the Oslo region where several new hotels opened during the quarter.
Organic sales growth was 4.7% with just over half due to growth in comparable units. Sales were positively affected by the late Easter in 2019. Adjusted for that, sales and RevPAR for comparable units were marginally lower than in the corresponding quarter last year.
During the first quarter, which seasonally is Scandic’s weakest, adjusted EBITDA improved in all segments except Sweden.
We were satisfied with the development of the Restel portfolio at the beginning of the year. It is gratifying to see a clear effect of the cost synergies we achieved during the second half of 2018. During the quarter, RevPAR rose slightly for the Restel hotels as a whole, and we see continued potential to strengthen both occupancy and average room rates.
We’ve stepped up the pace of our work to increase efficiency. Scandic has a strong market position and scalable business model, but we need to be more selective in our priorities and we have increased our focus on the unprofitable parts of our business.
We have a long-term positive outlook on our markets although higher capacity at some destinations may have a temporary negative effect on the market balance in 2019. There is new capacity in Oslo, and there will be an increase in Copenhagen during 2019.
We do not expect major changes in market conditions during the second quarter. For Q2, we expect sales growth for comparable units of between -2 and -3%, including a negative calendar effect of around 3% For the first six months of the year, we expect sales growth for comparable units of between 0 and -1% In addition, having more rooms in operation is expected to contribute approximately 2% to net sales.
President & CEO
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