Second quarter in summary
- Net sales rose by 26% to 4,748 MSEK (3,770), driven by more rooms in operation, including the acquisition of Restel, as well as positive currency effects.
- For comparable units, net sales increased by 4.3%, positively impacted by calendar effects.
- Adjusted EBITDA totaled 618 MSEK (461), corresponding to a margin of 13.0% (12.2).
- Restel contributed with 40 MSEK to adjusted EBITDA. Integration costs totaled 80 MSEK.
- Earnings per share amounted to 2.51 SEK (2.02). Excluding the effect of financial leases and currency effects from the revaluation of loans, earnings per share totaled 2.59 SEK (2.15).
- Agreement for new hotels in Helsingborg, Sweden, with approximately 180 rooms and in Voss, Norway, with about 216 rooms.
- Agreement to sell Cumulus Pori in Finland.
First half-year in summary
- Net sales rose by 24% to 8,539 MSEK (6,865). For comparable units, net sales was up 1.8%.
- Adjusted EBITDA was 733 MSEK (615) corresponding to a margin of 8.6% (9.0).
- Earnings per share amounted to 1.12 SEK (1.68). Excluding the effect of financial leases and currency effects from the revaluation of loans, earnings per share totaled 1.20 SEK (1.89). The decline is explained by the integration costs for Restel of 104 MSEK.
Overall, market conditions were good during the quarter with RevPAR rising in all markets. Demand has generally developed positively, but we also see an increase in supply in some regions. The market balance in Stockholm improved during the second quarter, as expected, with positive RevPAR development driven by good demand growth which increasingly compensates for the supply increase that occurred in 2017.
Net sales for comparable units rose by 4.3% in the second quarter and 1.8% in the first half of the year. Based on our assessment, revenue growth for the second quarter was positively affected by just over 3 percentage points since the Easter holiday fell partly in March this year.
During the first half of the year we opened a number of hotels in key destinations, such as Scandic Helsinki Airport, Scandic Lilleström in Oslo and Scandic Museumsufer in Frankfurt. In early July we opened the doors of Hotel Norge by Scandic in Bergen, one of Norway’s most prestigious hotels, and we look forward to launching the new Scandic Ködbyen in Copenhagen in September. We are also actively investing in our existing portfolio. Our gross pipeline currently consists of about 5,500 rooms, which corresponds to approximately 11% of our current hotel portfolio.
In early June, the rebranding of the Cumulus hotels to Scandic hotels was completed and the support functions were merged. Restel has started contributing to EBITDA and we expect increased earnings in the coming quarter as this is usually the most profitable period for Restel.
The hotel industry is in strong transformation and we have seen a need to strengthen our focus on digitization, branding, sales and distribution. Consequently, we presented a new Group Management team in June. The former role of Chief Commercial Officer is now divided into two functions: a Chief Customer Officer responsible for brand strategy, marketing and loyalty program and a Chief Commercial Optimization Officer with responsibility for distribution and sales. In addition, the position of Chief Information Officer has become a part of Group Management. I am pleased to welcome Niklas Angergård, Jan Lundborg and Ann Hellenius as new members of our management team!
During the third quarter, we expect sales growth for comparable units to be in line with the first half of the year. Demand is generally good and the weak Swedish krona is expected to have a positive impact on our Swedish operations during the summer months. We remain focused on continuously adjusting costs to market conditions.