Fourth-quarter in summary
- Net sales fell by 71 percent to 1,377 MSEK (4,831).
- Occupancy dropped to 23 percent during the quarter due to the increased spread of the coronavirus and stricter restrictions from authorities in all markets.
- Adjusted EBITDA was -282 MSEK (504). Results for the quarter were impacted positively by state aid of 226 MSEK and rental rebates of around 180 MSEK.
- Excluding IFRS 16 and items affecting comparability, earnings per share amounted to -2.37 SEK (1.83).
- At the end of the quarter, Scandic's available liquidity, including credit commitments, was approximately 1,900 MSEK.
Summary of the year
- Net sales fell by 61 percent to 7,470 MSEK (18,945) and adjusted EBITDA amounted to -1,503 MSEK (2,046). Received rental rebates during the year amounted to 196 MSEK and governmental support amounted to 726 MSEK.
- Adjusted for IFRS 16 and items affecting comparability, earnings per share totalled -37.19 SEK (7.49) with a significant negative impact from the impairment of intangible assets carried out during the first quarter.
Events after the reporting date
- Following negotiations with landlords, Scandic reached agreements for rent reductions of up to 900 MSEK, primarily for the period 2020-2022, most of which apply to 2021.
- At present, available liquidity including credit commitments amounts to approximately 1,400 MSEK.
CEO's comments in summary
The past year has been tremendously challenging for the entire hotel industry. As we previously announced, our occupancy rate fell to 23 percent in the fourth quarter due to increased spread of the virus and stricter restrictions. Both in December last year and during January this year, occupancy has been around 15 percent, with a certain negative effect during Christmas and the New Year's holidays when about half of the hotels were closed. For February, the occupancy rate is expected to be around 18 percent.
Towards a more normal hotel market from the summer
We are convinced that the hotel market will recover during 2021. As the vaccinations are carried out, we foresee that the restrictions will be eased, which will enable increased travel, sports and cultural events and meetings. Initially we expect that demand will be driven by intra-Nordic travel, which normally accounts for just over 80 percent of Scandic's total guest nights.
In the short term, demand will be completely determined by the pace at which restrictions are eased. We foresee a recovery where occupancy increases month by month, driven mainly by domestic and intra-Nordic leisure travel combined with gradual increase in business travel and meetings for our Nordic customers. We expect that pace of recovery will gradually increase and that occupancy during the summer will be higher than it was during the corresponding period last year. Crucial to this scenario is that infection and death rates due to the pandemic continue to decrease as vaccinations are completed by the summer.
Decisive actions make us well equipped for a recovery
Scandic has acted quickly and decisively the crisis. In a short time, we halved our cost base, which unfortunately affected thousands of team members. In recent months, we've also made great efforts into reaching agreements on lower rental costs with our landlords. We've achieved reductions of up to 900 MSEK, and we've also postponed the planned openings of some hotels in our pipeline for 2021. We continue to work actively to optimize our hotel portfolio and pipeline. I would like to take the opportunity to extend a big thank you to the landlords who have contributed and for the government support we have received during this very special year.
With a significantly reduced cost level combined with our efficient operating model, Scandic has all the prerequisites to reach a good level of profitability when demand returns, even if occupancy is expected to be lower than it was just before the pandemic. Scandic has an attractive hotel offer that is aimed at broad target groups, which makes us well positioned for a recovery in the market.
High focus on financing and liquidity
As occupancy increases, cash outflow will decrease and we continue to expect that we have the capacity to generate positive cash flow at an occupancy rate of around 50 percent. We will shortly present a solution to strengthen our financial position that is aligned with our main owners
This information is information that Scandic Hotels Group AB is obliged to make public pursuant to the EU Market Abuse Regulation. The information was submitted for publication, through the agency of the contact person set out below, at 07.30 CET on February 17, 2021.
About Scandic Hotels Group
Scandic is the largest hotel company in the Nordic countries with more than 280 hotels, in operation and under development, in more than 130 destinations. The company is the leader when it comes to integrating sustainability in all operations and its award-winning Design for All concept ensures that Scandic hotels are accessible to everyone. Well loved by guests and employees, the Scandic Friends loyalty program is the largest in the Nordic hotel industry and the company is one of the most attractive employers in the region. Scandic Hotels is listed on Nasdaq Stockholm. www.scandichotelsgroup.com