Annual report 2004/05

companies. In Italy, there is a strong
element of credit institutions in the
product selection in order to secure
larger percentages of guests’ total
forced to stay closed for up to 50 days
during the season. In general, a large
responsible for the major portion of the
turnover. The 25 largest resorts are esti-
Product development
The new, more flexible carving skis have
resorts. These are Vail Resorts and
Intrawest, listed on the New York
ownership structures. In Switzerland
consumption.
number of ski locations were forced into
mated to be responsible for just over
been a major success and have in-
Stock Exchange, and Compagnie des
and France, there are a few larger
companies with diversified ownership
in limited company form, of which a
couple are public and listed. In Japan,
ski resorts and ski-lift systems are
2004/05 season
Scandinavia
According to SLAO (Swedish Ski Lift
Organisation), ski-pass sales in Sweden
unplanned operation suspensions due to
the weather. However, the locations in
New Mexico, Utah and Colorado had a
good season. For many of them, it was
the best ever. Just over half of the total
60% of the total income for the industry.
Trends
Marketing
Increased resources are being invested
fluenced sales positively in recent years.
The leading companies in the industry
are broadening operations to include ski
schools, ski rental and sales of ski
clothing and equipment as well.
Alpes (CDA), listed on the Paris Stock
Exchange. Vail and Intrawest also
conduct extensive operations within real
estate development. Intrawest also owns
a travel agency. Besides entertainment
usually included in larger privately-
decreased during winter 2004/05 by
number of ski days were attributable
in advertising and marketing. The com-
and theme parks, CDA also conducts
owned conglomerates, often with
associated hotel operations. In Sweden,
1.1% to SEK 900 million, excluding
value added tax, compared to the
to the weekends, in line with previous
years. The number of snowboarders was
petition for attention is significant.
There is intense competition for
Population development
Demographic factors such as more
ski operations.
other than SkiStar, there is the Strömma
group, among others, with resorts in
Hemavan-Tärnaby and Riksgränsen.
previous season. The average price
increase was 2.6%, resulting in a
decrease in volume of 3.7%. The
stagnant, amounting to 29%. However,
major local deviations are evident.
Compared to Europe, the number of
attracting attention and gaining
publicity. The Internet, direct advertising
and ”multi-channel ad-
leisure time and an increased interest
in a healthy lifestyle, outdoor activities
and recreation are influencing people’s
The alpine destinations’
ski-pass sales
The North American market does not
number of ski days declined from 6.8
snowboarders in North America is high.
vertising” are being used to a greater
interest in alpine skiing in a favourable
differ from the others. It is also
million to 6.7 million. Weak natural
The number of skiers from the USA
extent.
direction.
significantly fragmented. The listed ski
snow conditions at the beginning of the
on Canadian slopes has decreased in
companies Vail Resorts, Intrawest and
American Skiing Company and Booth
season in parts of the Swedish
mountains, fewer holidays at Christmas
recent years. Instead, travel to Europe
has increased, primarily to ski resorts
The family
More and more ski resorts have families
More and older skiers
For Sweden, skiers in the 55+ age group
Creek represent just over 25% of the
and New Year and an early Easter
in Italy and Switzerland. An increa-
as their target group. This takes place by,
will probably increase as the first large
North American market. A structural
holiday are some of the reasons for this.
sing number of Americans also travel
among others things, wider and
“ski generation” learned to ski in the
transformation towards larger but fewer
In Norway, total ski-pass sales rose by
to ski locations in Colorado such as
flatter ski runs, greater accessibility,
seventies. Many in that group still ski
companies has been continuing for a
3.0% to NOK 747 million, including
Steamboat, Aspen and Vail.
shorter distance between accommodation
and plan to continue doing so for many
number of years now. The driving
7% value added tax. These sales had
and the slopes, child-care facilities, ski
years to come. Assuming that an equal
factors behind this change are the
opportunities for economies of scale
and the requirement for creating critical
mass. The economies of scale are
available in purchase coordination,
operation and maintenance, and within
marketing and sales. The critical mass
previously been exempt from tax. Price
increases in Norway were at an average
of 4.0%, resulting in a decrease of 1.0%
in the volume of passes sold. Weak snow
conditions at the beginning of the season,
negative calendar effects with shorter
Christmas holidays, the school holiday
The Alps
The weather varied rather significantly
in this region during winter 2004/05.
The northern parts of the Alps, where
most of the larger resorts are located,
had a good season. On the other hand,
the southern Alps had significantly
schools, youth activities in the evening
hours, cross-country skiing tracks,
accommodation that is more
comfortable, and the possibility for a
certain degree of self-catering at
accommodations. At the same time, ski
tows are being replaced by ski lifts with
number of children and young people
begin to ski as in previous years, the
total ski market in Sweden will grow.
Industry comparison
The analysis on this page compares
SkiStar with three other listed ski
NOK/SEK recalculated to exchange rate 1.05 for the
years up to 99/00 and 1.1 for 00/01, 03/04 and 04/05
and 1.19 for 01/02 and 02/03. FIM/SEK is recalculated
to exchange rate 1.48 for the years up to 99/00
and 1.50 for 00/01. For 01/02 and 02/03 Rukas and
Levis net sales have been calculated to exchange rate
EUR 9.20, 03/04 to EUR 9.10 and 04/05 to EUR 9.45.
is built up primarily via acquisitions of
period in February being concentrated
worse weather and less snow than the
a higher capacity.
competitors. This is partly about
building up volume and partly about
creating cash flows that are sufficient
into the same week, and a very early
Easter holiday affected the result
negatively. The total number of ski days
previous year. On average, the locations
in the northern Alps could stay open for
about 115 days during the season while
More target groups
In the USA especially, the industry is
Analysis listed ski resorts
SkiStar CDA Vail Intrawest
for balancing the often significant
amounted to 5.4 million, which is
the southern Alps could do so for 100
working to broaden its target groups to
Ski days, million 3 13 6 8
investments in lifts, ski slopes, snow
unchanged compared to the previous
days, signifying a striking decrease
include African-Americans, Americans of
Market value (18 October 2005), MSEK 3 083 3 319 9 027 9 342
systems etc. Another driving force in
the structural transformation of the
industry is the companies’ ambition to
conduct operations on several different
geographic areas, thereby decreasing
weather dependency. Both Intrawest and
French CDA have taken further steps
through investments in “warm-weather
services” such as golf resorts and
entertainment and theme parks.
Attempts, at varying degrees of scope,
are also being made to broaden the
year. In Finland, ski-pass sales amounted
to MEUR 46 (46.5) and the number of
ski days was unchanged at 2.7 million.
North America
The number of ski days in the USA
amounted to 56.4 million (57.1) and
18.4 million (19.0) in Canada.
The season was difficult at many
locations from a weather point of view,
especially in the North-West regions
where a number of ski resorts were
compared to the previous year. The
decrease can be explained by the early
spring. During the 2004/05 season,
the total number of ski days decreased
somewhat in the Alps, but its reputation
as the world’s largest ski location is not
threatened. On average, ski-pass prices
increased by 2-3%. Therefore, the total
income from ski-pass sales rose slightly
despite a decline in the number of ski
days. Similar to North America and the
Nordic region, the largest ski resorts are
Hispanic descent, ethnic minorities etc.
Snow production
Investments in snow systems are increasing
in order to decrease
dependence on the weather. Ski resorts
in the Alps with the same objectives are
investing in lifts and slopes at high
altitudes.
Net sales, MSEK 1 035 3 517 6 358 13 108
Return on equity, % 17 11 4 4
Operating margin, % 20 17 10 4
Equity ratio, % 53 40 35 32
Earnings per share, SEK 8:83 43:85 5:02 5:34
Stock exchange price (18 October 2005), SEK 158 531 247 195
Price/earnings ratio, times 18 12 49 37
Equity per share, SEK 55 453 117 135
Share price/equity, % 287 117 211 144
Earnings per share, SEK 6:00 15:82 0 1:06
Return, % 3,8 3,0 0 0,5
10
11