SkiStar AB Navigates Climate and Consumer Shifts with Proactive Strategies – A Resilient Play in Leisure

The leisure and travel sector has seen uneven recovery post-pandemic, with ski resorts facing added pressure from climate volatility and shifting consumer preferences. SkiStar AB (OMXS: SKISTAR), Scandinavia's leading mountain resort operator, has emerged as a standout performer, leveraging strategic investments and adaptive business models to sustain growth. Its interim report for the period September 2024 to May 2025 reveals a company not only rebounding from pandemic disruptions but also positioning itself as a long-term winner in the face of climate risks and evolving demand.

Financial Resilience: Revenue Growth and Cost Discipline

SkiStar's financial performance underscores its ability to capitalize on pent-up demand for winter vacations. Net sales rose 6% to SEK 1.49 billion, driven by a 9% increase in pre-bookings for the 2024/25 winter season, with international tourists—particularly from Denmark, the UK, and Germany—fuelling growth in ski rental, school services, and activity passes. Operating profit surged 18% to SEK 418 million, reflecting disciplined cost management. Despite higher personnel expenses from acquisitions and regulatory adjustments, core operational efficiencies kept margins intact.

The company's focus on capital efficiency is evident in its SEK 330 million investment for the upcoming season, prioritizing projects that enhance snow security and guest experience. These include modernized snow production systems, a new chairlift in Trysil, and expansion of the SkiStar Snow Park. Such investments align with its strategy to reduce climate vulnerability while boosting year-round revenue.

Climate Adaptation: A Fossil-Free Pilot and Infrastructure Upgrades

Climate change poses an existential threat to ski resorts, but SkiStar is countering it with proactive measures. Its fossil-free skiing pilot project at Hammarbybacken—a first in its portfolio—aims to eliminate reliance on fossil fuels by 2030. This initiative, supported by advanced snow-making technology and renewable energy systems, is a cornerstone of its Science-Based Targets (SBT) to reduce emissions by 50% by 2030.

Meanwhile, expanded snow production capabilities have extended the season, enabling slopes to stay open from November to April/May. The 7% increase in skiing days to 6.1 million in 2023/24 demonstrates the success of these efforts. SkiStar's emphasis on “snow security” is critical: it not only retains winter tourists but also attracts price-sensitive travelers drawn to its reliability amid erratic weather patterns.

Diversification Beyond Snow: Retail and Summer Activities

SkiStar's strategy extends beyond winter. Its EQPE clothing brand saw 32% sales growth in Q3, fueled by online expansion and sustainable product lines. This mirrors a broader shift toward year-round offerings, such as mountain coasters, cycling trails, and summer skiing. These initiatives reduced seasonal revenue dependency, contributing to a 10% rise in first-nine-month sales (SEK 4.34 billion).

The company's focus on international tourists—whose bookings rose 9%—also insulates it from Nordic market volatility. Strong demand from foreign travelers, aided by a favorable Swedish krona, highlights SkiStar's appeal as a destination for global leisure spenders.

Investment Thesis: A Resilient Play Amid Macroeconomic Headwinds

While macroeconomic uncertainties loom, SkiStar's fundamentals suggest it can navigate challenges. Its debt-to-EBITDA ratio of 1.7x (well below its 2.5x target) offers financial flexibility for growth. The 16% operating margin (near its 18% target) signals pricing power and cost control, while its 40–60% dividend payout ratio rewards shareholders without compromising reinvestment needs.

Investors should monitor two key risks: prolonged permit delays for infrastructure projects and climate-driven snow shortages. However, the company's SEK 330 million capital allocation and SBT-aligned goals mitigate these risks.

Conclusion: A Leader in Sustainable Leisure

SkiStar AB's interim report demonstrates a company that has mastered post-pandemic recovery while laying the groundwork for long-term resilience. Its blend of operational excellence, climate-forward strategies, and diversification positions it as a top-tier investment in the leisure sector. For investors seeking exposure to a business that thrives through volatility, SkiStar's proactive stance makes it a compelling buy.

Investment Grade: BUY
Price Target: SEK 250 (based on 20x 2025E EPS of SEK 12.5)
Risk Factors: Climate variability, Nordic market saturation, regulatory delays.

In a sector fraught with climate and economic uncertainty, SkiStar's adaptive model is a beacon of stability—and a promising bet for the next decade.