ANNUAL REPORT 2005/2006
memorable winter experiences
Corporate Governance:
Corporate governance
Report 76
Board of director’s report on internal control 79 Board of directors 80 Financial information 81 Group management 82 Articles of association 83
Operations:
Summary of the year 4
history 4
Comments from the ceo 6 The skistar share 8 Shareholders’ benefits 12
The market 14
Opportunities and risks 18 The group’s operations 22 Visions, goals and strategies
for success 24
Management and employees 26 Market and sales 29 Environmental work and social responsibility 32 Business area destinations 34
Sälen 36
Åre 38
Vemdalen 40
Hemsedal 42
Trysil 44
Business area properties 46
Annual report:
Administration report 48 Income statement 52
Balance sheet 53
Change in equity 55 Cash flow statement 56 Accounting principles 57
Notes 63
Audit report 75
SkiStar’s vision is to create memorable winter experiences
as the leading operator of European alpine destinations.
HISTORY
THE YEAR IN FIGURES 2005/06 2004/05 +/- +/-, %
Net sales, MSEK 1,280 977 +303 +31
Income before tax, MSEK 276 194 +82 +42
Income after tax, MSEK 242 184 +58 +32
Cash flow, MSEK 332 245 +87 +36
Earnings per share, SEK 6:19 4:72 +1:46 +31
Dividend, SEK 4:50 3:00 +1:50 +50
Market value 31 August, SEK 119:00 75:00 +44:00 +59
Direct yield, % 3.8 4.0
P/E ratio 19.2 17.0
Equity, MSEK 1,249 1,129 +120 +11
Equity ratio, % 44 54 -10 -19
Return on capital employed, % 14 12 +2 +17
Return on equity, % 20 17 +3 +18
Return on equity, % 34 32 +2 +6
Operating margin, % 23 21 +2 +10
Net margin, % 20 19 +1 +5
Average number of employees 1,045 871 +174 +20
Definitions can be found on page 51.
1997 Tandådalen & Hundfjället AB is acquired.
1975/78
Brothers Mats and Erik Paulsson purchase the Lindvallen ski resort in Sälen.
of the year
SIGNIFICANT EVENTS DURING THE FINANCIAL YEAR:
SkiStar acquires Trysil, Norway’s largest ski resort.
Net sales increased by MSEK 303 to MSEK 1,280 (977), income before tax increased by MSEK 82 to MSEK 276 (194), and income after tax increased by MSEK 58 to MSEK 242 (184). Net earnings per share increased to SEK 6:19 (4:72).
It has been proposed that dividends be increased to SEK 4:50 (3:00) per share.
SIGNIFICANT EVENTS AFTER THE END OF THE FINANCIAL YEAR:
SUMMARY
At the end of September, booking volumes were 8% higher than at the corresponding time in the previous year.
The new government’s proposed budget, as made public in October 2006, includes a decrease in value added tax on skiing from 12% to 6% as of 1 January 2007.
1994
Lindvallen is listed on
Stockholmsbörsen’s O-List.
1999 Åre-Vemdalen AB is acquired.
2000
Hemsedal SkiSenter AS is acquired.
2005 Acquisition of Trysil, Norway’s largest ski resort.
memorable winter experiences memorable winter experiences
2001 The Group takes the new name
SkiStar AB.
COMMENTS FROM THE CEO
The 2005/06 financial year Skistar’s best year ever.
THE 2005/06 FINANCIAL YEAR
SkiStar has presented its best ever result.
The increase in income can largely be explained by the acquisition of Trysil.
However, the existing destinations, with the exception of Hemsedal, which had another winter with poor natural snow conditions, also reported increased sales and profits during the financial year. It was particularly gladdening to see Åre show a strong increase in sales and income for the second year in a row.
Consolidated net sales for the financial year increased by MSEK 303 to MSEK 1,280 (977), income before tax increased by MSEK 82 to MSEK 276 (194) and income after tax increased by MSEK 58 to MSEK 242 (184). The acquisition of Trysil has resulted in an increase in ope- rating income of MSEK 203, MSEK 5 of which consisted of capital gains repor- ted under the Properties Business Area.
Furthermore, MSEK 126 of operating
expenses, MSEK 28 of depreciation/amor- tisation and MSEK 12 of net financial expenses, including interest on acquisition credits, were attributable to Trysil. This resulted in the Trysil acquisition having a positive effect of MSEK 37 on income before tax. The MSEK 34 we received in refunded VAT and interest also contribu- ted towards improving income.
Operations in the Properties Business Area produced a year-on-year increase in capital gains of MSEK 13 to a total of MSEK 58 (45), primarily due to sales of apartments in Sälen and Trysil. Earnings per share totalled SEK 6:19 (4:72).
SkiStar as a whole exceeded all its profita- bility targets. Organic growth was 7.2%.
The operating margin amounted to 23%, return on capital employed amounted to 14% and return on equity was 20%. The equity ratio fell to 44% (54) due to the acquisition of Trysil, which was paid for in cash.
THE ACQUISITION OF TRYSIL
On 19 May 2005, SkiStar entered a bid for the acquisition of the companies running Norway’s largest ski resort, Trysil. The owners accepted SkiStar’s bid on 23 May. The takeover was plan- ned for 1 November 2005, but on 10 October, the Norwegian Competition Authority notified its intention to inter- vene in the acquisition. The Norwegian Competition Authority approved the acquisition in mid-November and Trysil was consolidated into the Group on 1 December. The integration of Trysil has proceeded entirely according to plan, and I can state with pleasure that Trysil has already contributed marvellously towards SkiStar’s strong income growth during the past year.
THE SKISTAR SHARE
The overall goal for SkiStar is to increase
the value of the shareholders’ capital.
Foto Trons
During the 2005/06 financial year, the share price increased by 59% to SEK 119:00 and it is proposed that dividends be increased by 50% to SEK 4:50.
Happily enough, we have gained 1,509 (20%) new shareholders during the year and the number of shareholders now totals almost 9,000.
FOCUS ON THE TOTAL EXPERIENCE
In order to maintain confidence in our brand, we focus upon our guests’ total experience. For a number of years, the thrust of our work has been intended not only to communicate the same message through all channels, but also to live up to the expectations implied by our brand when we receive our guests. This has led to a comprehensive internal project inten- ded to make all members of staff feel involved and realise how each and every one of them contributes towards the guests’ total experience. This work has also involved a further develop- ment of our dialogue with our guests. The basis for the develop- ment of our destinations is now formed by our guests’ wishes together with our ambitions. We have also strived to increase the impact of our external commu- nications. We will continue this work next season, of course, when we will primarily be focused upon improving the integration of our marketing, sales and IT in order to increase efficiency. We will, furthermore, strive to communicate and sell alpine skiing to all guests at our destinations to a higher degree, instead of primarily selling accommodation to a limited share of them. In this manner, we will attempt to reach new guests who, for example, may have booked accommoda- tion through another organiser or who may own their own accommodation at our destinations.
Finally, we will continue to develop and improve our destinations so that we can continue to provide our guests with a memorable winter experience.
91% OF GUESTS SATISFIED OR VERY SATISFIED
Satisfied and returning guests are the basis of our profitability. We continually examine how our guests feel about their winter holidays. Each week, we measure
what the guests think of our various products and services. We continu- ally take measures on the basis of these results in order to continually improve our guests’ experience and exceed their expectations. During the last three years, we have also carried out an annual external study which is compiled into a Customer Satisfaction Index regarding what the guests think of our product and service selection and whether they think that they receive value for money.
The Customer Satisfaction Index for the 2005/06 season was 91%, which is an increase of two percentage points compa- red with the previous year. This increase shows that our investment in continuous measures has given results.
EMPLOYEES – OUR MOST IMPORTANT RESOURCE
Motivated employees provide good servi- ce and are a prerequisite for the company having satisfied guests who come back to us. Our managers go though training in
guest service and business development, among other subjects, at the SkiStar Academy, our own management school.
In order to find out how well we succeed, an external market research company annually conducts a survey, the Satisfied Employee Index, among all employees regarding what they think of SkiStar as an employer and whether the employ- ees believe that they get back from the company as much as they give, a vital condition for the company to recruit and retain competent staff. The Satisfied Employee Index for the winter season 2005/06 was 86%, which is an improve- ment of five percentage points over the previous season.
ALPINE WORLD SKI CHAMPIONSHIPS TO BOOST ÅRE’S TRADEMARK
Between 3 and 18 February 2007, the world’s best alpine skiers will visit Åre.
The Alpine World Ski Championships is the second largest winter sports event
after the Winter Olympics and will bring Åre comprehensive media exposure.
Over 600 hours of television will be broadcast from Åre to approximately 300 million viewers across the entire world. This will boost Åre’s position as a world class alpine destination and will obviously strengthen Åre’s brand and improve its competitive position in gene- ral and our position in foreign markets in particular.
PRIOR TO THE 2006/07 SEASON
Demand for skiing holidays at SkiStar’s destinations continues to be strong. The current booking situation at the end of September showed an 8% improvement in volume over the same point in time last year. The number of rental units pro- cured via our sales channels has risen by 2% at our destinations since last season.
Development of our destinations conti- nues at a rapid pace. Scandinavia’s first Telemix lift, a combined chair and gon- dola lift, is being constructed in Åre, replacing the old Olympia lift. Furthermore, we are inves- ting in a new 6-seat lift in Trysil, as well as the expansion and enhancement of the snow sys- tems at all destinations, in order to be able to lay snow faster and over a larger area, thereby ensur- ing that our guests can always be offe- red good skiing on their holidays. The strong demand in combination with the continued development of our products and increased focus upon improving the organisation’s efficiency will guarantee a continued positive future for SkiStar.
Sälen, 25 October 2006 Mats Årjes
CEO
”Satisfied and returning guests are the basis of our
profitability”
THE SKISTAR SHARE
During the financial year, the price of the SkiStar share increased by 59% to sek 119. It is proposed that dividends be increased by 50% to
sek 4:50 Per share.
HISTORY
The B share has been listed on the OMX Mid Cap Stockholm since 8 July 1994.
At the time of listing, the share price was SEK 9.
SHARE STRUCTURE
On 31 August 2006, share capital was SEK 19,540,039 distributed among 39,080,078 shares, of
which 1,824,000 are A shares carrying 10 votes per share and 37,256,078 are B shares carrying one vote per share. A 2:1 split of the share was carried out at the end of December 2005 whereby the number of shares was doubled. In July 2003, a convertible debenture loan amounting to MSEK 25 was issued to personnel. As of 31 August 2006, MSEK 20.7 of the debenture loan had been converted to 520,786 B shares and a further MSEK 2.8 had been redeemed for conversion to 70,947 B shares, although conversion had not been concluded per the close of the financial
year. The convertible loan expires on 1 July 2008 and outstanding debentures of MSEK 1.5 can be converted to an addi- tional 37,004 B shares. The conversion to shares of debentures unconverted as
of the closing date would bring about a dilution of existing shares by 0.3%.
SHARE PRICE DEVELOPMENT AND NET SALES
The share price increased by 59% to SEK 119 during the 2005/06 financial year. Stockholmsbörsen’s total index (OMXS) rose by 20% during the same
period. Since the company was listed in 1994, the market price has increased from SEK 9 to SEK 119. During the same period, dividends were provi- ded of SEK 13:18 per share. During
the period 1 September – 31 August 2006, a total of 9,646,186 (3,784,305) shares in SkiStar were traded on Stockholmsbörsen at a value of MSEK 912 (486).
The turnover rate for shares amounted to 25% (19), compared with 141%
for Stockholmsbörsen as a whole. The lowest share price was SEK 73:25, noted
on 1 September 2005 and the highest share price was SEK 123:00, noted on 31 August 2006.
On 31 August 2006, SkiStar’s market capitalisa- tion amounted to MSEK 4,651 (2,928).
BETA VALUE
The beta value of SkiStar’s B share was 1.04 on 31 August 2006. The beta value is based on the company’s share price during the past 24 months and indicates the degree to which the share price has fluctuated compared to the stock exchange index. If a share has the same price fluctuation as the stock exchange index, then the share’s beta value is equal to 1.0 and vice versa. A beta value of 1.04 con- sequently implies that the share is dis- playing more share price volatility than Stockholmsbörsen, on average.
2,500 5,000 7,500 10,000
20 40 60 80 100 120 140
94 95 96 97 98 99 00 01 02 03 04 05 06
SkiStar
B shares SIX general index
Number of shares traded in 1000s
5
(including aftersubscription)
(c) SIX
SHAREHOLDER STRUCTURE
There were 8,963 (7,454) shareholders on 31 August 2006, an increase of 1,509 (20%) in the number of share- holders during the last year. At the end of the financial year, the ten largest shareholders accounted for 64% (67) of the capital and 75% (77) of the votes.
Foreign owners accounted for 12% (7) of the capital and institutional owners for 27% (36) of capital. Significant changes among the largest owners during the financial year included the arrival of Norway’s Orkla ASA as new shareholder, with 1,334,200 B shares.
Mats and Erik Paulsson have increased their holdings slightly via companies, and SEB Fonder and HQ Fonder redu- ced their holdings.
DIVIDEND POLICY
SkiStar’s dividend policy is to annually distribute at least 50% of its income after tax. The policy is based upon SkiStar’s strong financial base combined with a strong cash flow, which allows a generous dividend policy at the same time as investments can be financed by the company’s own means. The proposed dividend of SEK 4:50 (3:00) per share corresponds to 73% (68) of income after tax. The proposed dividend implies a yield of 3.8% (4.0) from the market value on 31 August. In total, the proposed dividend amounts to MSEK
OWNERSHIP CATEGORIES 31 AUGUST 2006
Category Number of shares Participations, %
Swedish private persons 23,662,024 61
Swedish institutional ownership 10,775,147 27
Foreign private persons 324,358 1
Foreign ownership 4,318,549 11
Total 39,080,078 100
SHARE STRUCTURE 31 AUGUST 2006
SEK
0 5 10
Utdelning/aktie Vinst/aktie
01/02 02/03 03/04 04/05 05/06
Profit and dividend per share, SEK
Profit per share Dividend per share
Class of shares Number of shares Number of votes Capital, % Votes, %
A 10 votes 1,824,000 18,240,000 5 33
B 1 vote 37,256,078 37,256,078 95 67
Total 39,080,078 55,496,078 100 100
*The high profit per share 03/04 was due to a major revenue from taxation.
176 (117). The date of 7 December 2006 is proposed as date of record for payment to the Swedish shareholders.
Payments of dividends will be disbursed
by VPC (the Swedish Central Securities
Depository & Clearing Organisation)
on 12 December 2006.
OWNERSHIP STRUCTURE 31 AUGUST 2006
Size class Number of owners % Number of shares % Number of votes %
1-100 1,659 18.98 78,289 0.20 86,844 0.16
101-200 1,542 17.65 296,530 0.76 316,427 0.57
201-1000 3,993 45.69 2,443,040 6.25 2,468,724 4.44
1 001-5 000 1,260 14.42 2,827,419 7.23 2,813,696 5.06
5 001-10 000 124 1.42 903,200 2.31 938,688 1.69
10 001-20 000 65 0.74 976,713 2.50 1,017,830 1.83
20 001-50 000 35 0.40 1,187,439 3.04 1,219,478 2.19
50 001-100 000 20 0.23 1,419,294 3.63 1,473,884 2.65
100 001- 41 0.47 28,948,154 74.08 45,231,454 81.41
Totalt 8,739 100.00 39,080,078 100.00 55,567,025 100.00
224 foreign owners with a total holding of 381,296 shares are registered as shareholders via the Norwegian Central Securities Depository.
SHARE CAPITAL DEVELOPMENT
Year Changes
Increase in number of shares
Nominal amount SEK/
share
Total number of shares
Change in share capital,
SEK Total share capital, SEK
1992 10 500,000 5,000,000
1994 New share issue 150,000 10 650,000 1,500,000 6,500,000
1994 Conversion 160,405 10 810,405 1,604,050 8,104,050
1995 Split 5:1 3,241,620 2 4,052,025 8,104,050
1997 New share issue 2,337,725 2 6,389,750 4,675,450 12,779,500
1998 New share issue 200,000 2 6,589,750 400,000 13,179,500
1998 Conversion 250,000 2 6,839,750 500,000 13,679,500
1999 Conversion 250,000 2 7,089,750 500,000 14,179,500
1999 New share issue 2,450,000 2 9,539,750 4,900,000 19,079,500
2000 New share issue 100,073 2 9,639,823 200,146 19,279,646
2004 Split 2:1 9,639,823 1 19,279,646 19,279,646
2004 Conversion 183,566 1 19,463,212 183,566 19,463,212
2005 Conversion 64,822 1 19,528,034 64,822 19,528,034
2005 Split 1:2 19,528,034 0.5 39,056,068 19,528,034
2006 Conversion 24,010 0.5 39,080,078 12,005 19,540,039
LARGEST SHAREHOLDERS AS PER 31 AUGUST 2006
Owners A shares B shares Capital, % Votes, %
Mats Paulsson including companies and family 1,824,000 5,101,042 17.72 42.06
Erik Paulsson including companies and family 6,588,910 16.86 11.87
Investment AB Öresund 4,401,800 11.26 7.93
Lima Besparingsskog 1,840,000 4.71 3.32
Per-Uno Sandberg 1,600,000 4.09 2.88
Orkla ASA 1,334,200 3.41 2.40
SEB-Fonder 1,309,740 3.35 2.36
HQ Fonder 1,020,600 2.61 1.84
Handelsbanken Fonder 726,805 1.86 1.31
Robur Fonder 490,983 1.26 0.88
Nordea Bank Norge Nominee 460,040 1.18 0.83
Nordea Bank SA 238,200 0.61 0.43
The Second Swedish National Pension Fund 225,352 0.58 0.41
Jonas Mareniusson 207,588 0.53 0.37
Dresdner Bank Luxembourg SA 175,000 0.45 0.32
Anders Elsell 175,000 0.45 0.32
Skandia Fonder 171,187 0.44 0.31
Magnus Sjöholm 167,368 0.43 0.30
Northern Trust CO 150,000 0.38 0.27
Other 10,872,263 27.82 19.59
Total 1,824,000 37,256,078 100.00 100.00
DATA PER SHARE
2005/06 2004/05 2003/04* 2002/03* 2001/02*Average number of shares 39,062,008 38,946,928 38,559,292 38,559,292 38,559,292
Number of shares after full conversion 39,188,029 39,188,029 19,487,729 19,308,638 19,279,646
Profit, SEK 6:19 4:72 8:13 3:16 2:53
Profit after full conversion 6:17 4,70 8,05 3,16 2,53
Cash flow, SEK 8:51 6:30 7:14 7:25 6:17
Equity, SEK 32:00 29:00 25:50 19:00 17:75
Equity after full conversion 32:00 29:00 25:50 19:50 17:75
Market price, SEK 119:00 75:00 56:00 41:25 25:75
Dividends, SEK 4:50 3:00 2:50 2:00 1:50
P/E ratio, times 19,2 17,0 6,9 13,1 10,2
Share price/cash flow, times 14.0 11.9 10.0 6.3 3.9
Share price/equity, % 372 259 220 217 145
Return, % 3.8 4.0 4.5 4.8 5.8
Comparisons have been adjusted due to the split of shares.
*Figures reported according to previous accounting principles.
Being a guest gives shareholders an extra perspective of the company’s core activi- ties, and many take the opportunity to join in and affect product development at the destinations through guest surveys and their own initiatives.
Shareholders with at least 200 shares in SkiStar can order a shareholder’s card, which entitles them to discounts at all of SkiStar’s destinations. These discounts
SHAREHOLDERS’
BENEFITS
Many of SkiStar’s shareholders are regular guests at åre, vemdalen, sälen, trysil or
hemsedal.
amount to 15% from ski passes, ski ren- tal and ski schools arranged by SkiStar.
As of 31 August 2006, 3,647 (2,873) sha- reholders held cards, representing 41%
(39) of the total number of shareholders.
If you would like your own shareholder’s card or would like more information about shareholder’s benefits, please visit www.skistar.com.
EXAMPLE
On 1 September 2005, Kristina bought 200 SkiStar shares for SEK 15,000.
During the winter school holidays, she and her husband, together with their two children, aged 10 and 12, went to Sälen for a week-long ski holiday. One year later, on 31 August 2006, Kristina had received the following returns on her SkiStar shares.
Share price development,
1 September 2005 – 31 August 2006 SEK 27 x 200 = SEK 5,400 Dividend, December 2005 SEK 6 x 200 = SEK 1,200
15% discount on family ski pass (2*1,470*0,15)+(2*1175*0,15)=SEK 793:50 15% discount on family ski hire (2*640*0,15)+(2*510*0,15)=SEK 345 15% discount on family ski school 735*4*0,15=SEK441
Total return, % 8,179,50/15 000=55%
Total return, SEK 5,400+1200+793:50+345+441=SEK 8,179:50
memorable winter experiences
14
The tourism is one of the world’s largest industries and an important sector. According to the swedish agency for economic and regional growth, the sector accounts for 2.8%
of sweden’s total GNP.
THE MARKET
THE GLOBAL TOURISM INDUSTRY
Tourism is one of the world’s largest indu- stries. This industry is found in practically all countries, to a greater or lesser extent, and is growing very rapidly. According to the World Tourism Organization (UNWTO), a United Nations body which produces statistics concerning the world’s tourism, global tourism has increased during the past ten years by approxima- tely 45% in terms of the volume of visits.
During 2005 alone, the UNWTO reported a global increase of 5.5% in the volume of visits, and 7% growth in northern Europe. The results from the first four months of 2006 indicate conti- nued increases, with growth in global tou- rism forecasted at 4.5% and in northern Europe at 8%.
THE SWEDISH TOURISM INDUSTRY
The tourism industry is also a very large and important sector in Sweden.
According to the Swedish Agency for Economic and Regional Growth (NUTEK), the industry represents approximately 2.8% of Sweden’s combi- ned GNP. According to NUTEK’s 2005 annual report on the Swedish tourism industry, the export value of the indu- stry, i.e. consumption by foreign visitors to Sweden, increased during 2005 by 18.6%, measured in terms of relative prices. However, this figure included both private and business travellers. There is no data limited to foreign private travel- lers. On the other hand, there is a sepa- rate set of statistics for Swedish tourism in Sweden covering the consumption of private travellers, which, according to
NUTEK increased by 5.5% in 2005 in terms of relative prices. In a ten-year perspective, the corresponding increase is 64%.
Assessment of the size of Swedish private traveller’s consumption abroad is dif- ficult, and there are no reliable statistics.
Regardless of this, one can conclude that the tourism industry is a sector for the future, with increasing demand for travel and with even greater economic signifi- cance.
THE ALPINE WORLD MARKET
Alpine skiing is available on all five Continents. Europe is the largest market, and each year approximately 200 mil- lion ski days are consumed (one days’
downhill skiing with a ski pass counts as one ski day). North America is the next
The global tourism industry The global tourism industry The global tourism industry
0 5 10 20
-05 -04 -03 -02 -01 -00 -99 -98 -97 -96 -95 MSEK
Tourist consumption in Sweden in terms of relative prices, SEK million
Swedish leisure travellers’ consumption in Sweden Foreign visitors’ consumption in Sweden 0
500 1,000 1,500 2,000
-05 -04 -03 -02 Millions
Tourist visits globally, in millions
Source: UNWTO Source: NUTEK
largest market, with approximately 75 million ski days per year. The largest, individual markets are the US and France, with slightly less than 60 million ski days per year. The Nordic Region, consisting of Sweden, Norway and Finland, accounts for approximately 10 million ski days per year. The growth in the global market has historically been a couple of percentage points per annum. The variations bet- ween the markets are, however, large. For example, Japan has had negative growth during recent years, while many new
“skiing countries” have developed, prima- rily among the former Eastern European countries, and are showing strong growth.
Resorts in all countries are visited pri- marily by skiers from the home country.
In the US and Canada, foreign skiers account for slightly less than 5% of visits. In countries such as Japan, South Africa, Chile and Argentina, the portion of foreign guests is very low. The largest percentage of foreign visitors is found in the Alps, where approximately one-third of all downhill skiers come from other countries. The industry leading companies work primarily locally, but during recent years, there have been some cross-border cooperation and acquisitions. In Sweden, SkiStar has completed an acquisition in Norway. In France, the listed group Compagnie de Alpes (CDA) has acquired ski resorts in both Switzerland and Italy.
The ownership of ski resorts is very fragmented; many are family owned and many companies are quite small. In Austria, the ownership is dominated enti- rely by privately owned, smaller compa- nies. In Italy, there is a strong element of credit institutions in the ownership pro- file; in Switzerland and France, there are a few larger limited companies with broad ownership, of which a couple are publicly owned and listed on stock exchanges.
In Japan, ski resorts and lift systems are often included in larger, privately-owned conglomerates, often with associated hotel operations. In addition to SkiStar, Sweden is home to, among others, the Strömma Group, which has resorts in Hemavan- Tärnaby and Riksgränsen. The North American market does not differ from the other markets, and is also fragmented.
The listed skiing companies, Vail Resorts, Intrawest, American Skiing Company and Booth Creek account for slightly more than 25% of the North American market.
has taken place, with a shift towards increasingly larger but fewer companies.
Behind this trend has been the possibilities of achieving economies of scale and the need to create a critical business volume.
Economies of scale are found in the coor- dination of purchasing, operations and maintenance, as well as within marketing and sales. The critical business volume is built up primarily via the acquisition of competitors. This has to do both with building volume and with creating a cash flow sufficient to balance the often exten- sive investments in such areas as lifts, slopes and snow systems. Another driving force behind the industry’s restructuring trend is the companies’ desire to work in a greater number of various geographi- cal locations in an effort to decrease
dependency on weather conditions in one or a limited number of locations. Both Intrawest and CDA have taken further steps by investing in “warm weather services,” such as golfing resorts and entertainment and theme parks. Attempts are also being made in varying degrees to broaden the product offering in order to attract a larger portion of the guests’ total consumption.
THE 2005/06 SEASON The Nordic Region
According to SLAO (Swedish Ski Lift Organisation), sales of ski passes during the winter 2005/06 increased in Sweden by 10% to SEK 990 million, excluding VAT, as compared with the previous season. The average increase in prices was 2.3%, which represents an increase of 7.7% in total volume. The number of ski days increased from 6.7 million to 7.1 million. In Norway, total sales of ski passes increased by 7.0% to SEK 747 million. Price increases in Norway averaged 4.0%, indicating an increase in volume of approximately 3.0%. The total number of ski days increased from 5.4 million to 5.5 million. VAT on Ski Passes was increased in Norway on 1 January 2006 from 7% to 8%. In Finland, sales
million (46) and the number of ski days increased from 2.7 million to 2.8 million.
North America
The number of ski days in the US amounted to 58.8 million (56.4) which was the highest number of days ever noted, while in Canada, ski days total- led 19.1 million (18.4). The season was good, with early snowfalls which allowed many ski resorts to open early in the sea- son. General snow conditions were better compared with the previous year, with the exception of the northeast portions of the country which had less snow. Slightly more than fifty percent of the total num- ber of ski days was at the weekend, in line with previous years. Snowboarders accounted for approximately one-third, although numbers vary significantly from location to location. Compared with Europe, the share of snowboarders in the US is very high.
The Alps
The weather was better in the region in 2005/06 than during the previous season.
It snowed early throughout the entire region, allowing a number of resorts to open already in December. The more northern areas of the Alps, where a num- ber of larger resorts are located, saw a season of medium quality, primarily due to the fact that they had less favourable snow conditions further on into the sea- son, negatively impacting their results during the school vacations in February.
However, the southern Alps had a good season, with more snow than the in the previous year. On average the resorts were open 111 days during the season, which is 7 more than in the previous sea- son. During the 2005/06 season the total number of ski days increased slightly in the Alps, and the region’s position as the world’s most popular ski area was unthreatened. On average, the prices for ski passes increased by approximately 4%. A greater number of days open in combination with price increases resulted in increased total revenues from the sale of ski passes.
Similar to the situation in North American and the Nordic Region, the largest ski resorts in the Alps accounted for a majority of net sales. The 25 lar- gest ski resorts are expected to represent slightly less than 60% of the industry’s total revenues.
"In all five parts of the world, people are
engaged in alpine,
downhill skiing."
TRENDS Marketing
Increased resources were invested in advertising and marketing, and the com- petition to get peoples’ attention is quite heavy. Internet, direct advertising and multi-channel advertising are being used increasingly.
The family
An increasing number of ski resorts are investing in the family as their target group. This takes place on the basis of, among other things, wider and more level pistes, increased accessibility with shorter distances between accommodations and the slopes, child care possibilities, ski schools, youth activities in the evenings, cross country tracks, more comfortable accommodation and the possibility of preparing at least some meals on ones own. At the same time, T-bar lifts have been replaced by modern chair lifts which are operationally safe and comfor-
table, and which have a high capacity.
A larger number of target groups
Particularly in the US, the industry is working to expand the target groups in order to reach more afro-Americans, Americans with Spanish background, ethnic minorities, etc.
Snow conditions
Investments in snow systems are increa- sing with the aim of decreased depen- dency on the weather. To reach the same objective, ski resorts in the Alps are inves- ting in lifts and trails at high altitudes.
Product development
The leading industry companies are expanding their operations to include ski schools, ski rental and the sale of ski clot- hing and equipment.
Population trends
Demographic factors, more leisure time and an increased interest in keep-fit acti-
ANALYSIS OF LISTED SKI RESORTS
SkiStar CDA Vail Intrawest
Ski days, million 4 11 6 7
Market value (051018), MSEK 4, 648 4, 084 9, 859 11, 498
Net sales, MSEK 1, 280 3, 471 6, 165 11, 837
Return on equity, % 20 10 8 6
Operating margin, % 23 10 13 6
Profit per share, SEK 6:19 39:95 8:89 17:42
Share price (051018), SEK 119 536 277 234
P/E ratio 19 14 34 32
Equity per share, SEK 32 419 122 150
Share price/equity, % 372 128 209 156
Dividend per share, SEK 4:50 15:40 0 1:76
Direct yield, % 3.8 2.9 0 0.8
The companies are reported at bookclosing date: for SkiStar, 31 July 2006; for Intrawest, 30 June 2006; Vail and Intrawest figures are recalculated on the basis of a USD exchange rate of 7:35 and CDA is recalculated on the basis of a EURO exchange rate of 9:25. CDA has its bookclosing on 30 September, meaning that the current financial year has not been reported. Therefore, figures for CDA refer to financial year 04/05.
0 50 100 150 200 250 300
Levi Ruka Idre/Grövelsjön/
Fjätervålen Trysil Hemsedal
Vemdalen Åre Sälen
05/06 04/05 03/04 02/03 01/02 00/01 99/00 98/99 97/98 96/97 95/96 MSEK
ALPINE DESTINATIONS, NET SALES OF SKI PASSES, MSEK
vities, outdoor activities and recreation are having a positive effect on peoples’
interest in alpine downhill skiing.
More and older skiers
In Sweden, skiers in the age group 55+
will probably increase, as the first big
“skiing generation” learned to ski during the 1970s. There are still many individu- als in this group who continue to ski and plan to do so for many years to come.
Assuming that an equal number of child- ren and youth begin skiing as in previous years, the total ski market will grow in Sweden.
PRICE COMPARISONS
In October 2005, the Institute for the Private Economy, at what was formerly FöreningsSparbanken, made a price com- parison of how much it cost for a family to take a winter vacation. This compari- son showed that it was much cheaper for the family to have a week’s skiing hol- ding in the Swedish mountains compared with a ski vacation in Bad Gastein in the Alps or a beach holiday on the Canary Islands.
INDUSTRY COMPARISON
In the graph below, Ski Star is compa-
red with three other listed ski resort
companies. These are Vail Resorts and
Intrawest, both listed on the New York
Stock Exchange, and Compagnie des
Alps (CDA), listed on the Paris stock
exchange. Vail and Intrawest also operate
extensive operations within property
development and Intrawest also owns a
travel agency. CDA has, in addition to its
skiing operates, entertainment and theme
parks.
"A smile says more than a thousand somersaults….
She appeared to be about four years old, that little girl carried forward on her mother’s skis.
She looked really tired - her cap hanging, her overall hanging, her mittens hanging, her eye lids hanging down and her legs hardly able to hang on. And everything was hanging on two hooks:
The corners of her mouth.
For the corners of her mouth wrapped all the way up to her ears. This little girl was truly and completely happy. Despite being covered from head to toe with snow. Despite looking like she could fall asleep where she stood. And despite the day on the ski slopes coming to a close, she was glowing with happiness.
It is diffi cult to fi nd more genuine smiles
than those one fi nds around a ski area."
The alpine ski industry is impacted by a number of external factors which, correctly handled, can be changed to possibilities.
OPERATIONAL RISKS Seasonal dependency
The major portion of SkiStar’s revenues is generated during the period December –April. SkiStar’s operations are well adapted to the season variations, not the least in terms of the working force. The majority of the winter bookings takes place prior to the beginning of the sea- son. With an increased portion of sales paid in advance, the close of the business transaction takes place at an earlier point in time, which, in turn, decreases the risk in the operations.
Dependency on weather
The number of guests at SkiStar’s desti- nations is affected to a certain degree by weather and snow conditions. A late winter and weak access to natural snow dampens the demand for skiing.
However, the operational risk is limited due to slightly more than 78% (76) of the lift capacity of SkiStar’s destina- tions being provided with snow from snow systems. The impact of the green- house effect is currently being debated.
According to studies undertaken by the Swedish Environmental Protection Agency, the expected warmer climate will not result in snow-free winters.
Quite the opposite, more snow is expec- ted, but with a greater number of mild periods during the wintertime. A milder climate can, in the long term, give rise to
shorter winter seasons. Should SkiStar’s destinations, for example, begin the season one week later than usual and end one week earlier, the results would be only marginally affected. The change in temperature in the Alps is expected to be greater than in Scandinavia, which is why the greenhouse effect could provide new business opportunities for SkiStar. The Group’s weather risks have also decreased due to the fact that the destinations are geographically placed in a variety of locations having varying weather conditions.
Business cycle
Changes in peoples’ disposable income impacts private consumption, which in its turn has an impact on peoples’ pos- sibilities to travel on winter vacations.
SkiStar’s historical sales development and earnings trends show that the com- pany has been able to handle swings in the business cycle quite well. The depen- dency on the Swedish economic climate is decreased by the fact that there are also operations in Norway and by the fact that the Group’s guests come from
a variety of countries. A large portion of SkiStar’s guests are families which, to a large degree, come back year after year and for whom the winter holiday is a high priority.
Competition
Requirements for entering the Alpine ski industry are high, and this limits compe- tition. Sun and surf holidays and week- end city breaks are considered to be the company’s main competitors, but other industries are also competing for peop- les’ disposal incomes, including impulse shopping and investments in the home.
Other competitors are comprised of other Alpine ski resorts in Scandinavia and the Alps. Via extensive investments in such areas as service-focused employ- ees, leadership, modern lifts and snow systems, IT, and restaurants, SkiStar maintains a high level of quality at its Alpine destinations, where guests’ winter experience and comfort are also impro- ved year after year. SkiStar’s destinations are highly accessible to heavily popu- lated areas, both as regards geographic location and as regards reasonably pri- ced transportation by trains, airplane, bus and rental car. Other important competitive factors are strong financial position, a well-known and attractive brands, and a strong cash flow.
POSSIBILITIES AND RISKS
”SkiStar works
actively with
safety issues”
Expansion
SkiStar’s strategy for growth includes, firstly, better utilisation of the existing destinations and, secondly, the acquisi- tion or leasing of other ski resorts. All of the acquisitions which SkiStar has undertaken have developed well and have, to a large degree, contributed to SkiStar’s successful development. During 1997, Tandådalen & Hundfjället AB was acquired, in 1999 Åre Vemdalen AB, in 2000 Hemsedal SkiSenter AS and in 2005 Trysilfjellet Alpin AS. SkiStar’s developed and well proven concept for operating alpine destinations is a good foundation for continued, successful expansion.
Bed capacity and occupancy rate
The profitability of alpine destinations is dependent on the number of availa- ble beds and the occupancy rate. It is important that SkiStar have control over a large bed capacity in order to opti- mise occupancy by acting on changes in demand and by setting the right prices for rooms during all parts of the sea- son. SkiStar actively works to increase the number of beds at the destinations and to increase the percentage provided via SkiStar agency activities. It is also important that older cabins and apart- ments be modernised in order to main- tain demand. New investments in cabins and apartments have been undertaken
external stakeholders or partly-owned companies. The strong interest of skiers in SkiStar’s destinations results in invest- ment capital being attracted, which leads to a long-term growth in tourist beds.
Personnel
SkiStar’s continued success is dependent on motivated and engaged personnel. In order to retain key personnel, SkiStar is working with management development and an incentive programme in which personnel have been offered the opportu- nity to purchase convertible debentures.
Per 31 August 2006, SkiStar’s company management owned a total of 591,620 B shares in the company. Salary costs
Memorable winter experiences
SENSITIVITY ANALYSIS
item. In order to increase efficiency, awa- reness and engagement among personnel, SkiStar works extensively with leadership issues. The SkiStar Academy provides manager training for enhanced leadership skills. The personnel’s service level in relation to the guests is an important part of the guests’ total experience. A decrease in the possibility of recruiting qualified seasonal personnel during a strong eco- nomic cycle, when unemployment is low, therefore constitutes a risk.
FINANCIAL RISKS Currency risks
The fluctuation of local currencies against other currencies impact on peoples’ travel habits and can, therefore, affect the number of guests at SkiStar’s alpine destinations. The Group is also affected by the relationship between the Swedish and Norwegian currencies.
SkiStar does not hedge its foreign ope- rations. The purchase of, for example, lifts and grooming machines takes place abroad and these prices are impacted by changes in exchange rates.
Investments and interest rates
The Alpine ski industry involves major capital investment in order to maintain and increase competitiveness. SkiStar has a strong cash flow which enables a high level of investment and a high level of internally financed investments.
Should interest rates increase, the cash flow can be used to more quickly amor- tise loans and thereby decreased the financial burden on the company. At present, external borrowing takes place only in local currencies, SEK and NOK.
The loan portfolio includes only short- term, fixed-interest borrowings.
Electricity costs
SkiStar’s operations consume larges amounts of electricity. Consequently, changes in the electricity price impact
on the Group’s total costs and results.
According to the established policy, the major portion of the Group’s electricity consumption is obtained on the basis of fixed prices. Approximately 30% of the electricity prices for the 2006/07 season are fixed. Local power producers supply approximately 20% of the Group’s electricity consumption at local prices which are less than market prices on the Nord Pool electricity market. These local prices fluctuate much less than market prices, which is the reason the prices for these volumes are not hedged. This implies that approximately 50% of the winter’s expected electricity consumption is directly impacted by fluctuations in the market price.
Gas prices
Many of SkiStar’s guests travel in their own cars to the destinations. This habit is affected by the level of gas prices and company car taxation. Alpine destina- tions which are located close to heavily populated areas and which have trans- portation alternatives such as train and airplane decrease the negative conse- quences of increased gasoline prices.
VAT
The new government in Sweden has, in a government bill, proposed a decrease in VAT on skiing from 12% to 6% from 1 January 2007. SkiStar will, at the same time, decrease the prices of the ski passes in an amount equivalent to this decrease in VAT.
SAFETY ISSUES
SkiStar works actively with safety issues by identifying and taking measures concerning accident risks and also by actively working with issues of work environment. Risk analyses are execu- ted at all of the destinations in order to ensure that there is sufficient insurance coverage and to minimise the various
types of risk. A thorough crisis plan for SkiStar has also been produced in order for the company to be well- prepared for any possible accidents or events in the future.
CURRENT DISPUTES
The County Administrative Court has determined that SkiStar is to pay employers contributions for the employ- ees’ ski pass benefits, in spite of the fact that the employees require the ski passes to perform their work duties.
SkiStar has appealed this decision to the Administrative Court of Appeal. In other respects, SkiStar is not currently involved in any dispute which is deemed to have any significant effect on the company’s results and financial position.
SENSITIVITY ANALYSIS
The sensitivity analysis below descri- bes the manner in which the Group’s results are impacted by changes in a number of the most important variables.
Assumptions regarding the impact of the occupancy rate on the operating result are based on all accommodation pro- vided via SkiStar and refers only to the impact on the sale of ski passes. Changes in other types of revenue are deemed in the sensitivity analysis to be neutralised by the increase or decrease in expenses.
In calculating the sensitivity of electricity price changes, consideration has only been given to the portion of electricity consumption which is directly affected by changes in the market price. All interest rates are variable and a change in the interest rate environment can, therefore, have a direct effect on interest expenses.
As a large portion of the company’s operations are now found in Norway, the SEK/NOK exchange rate has a larger impact on results than previously and has, therefore, been included in the sensi- tivity analysis.
FORECASTS
SkiStar has previously decided not to provide an earnings forecast. Instead, the interim reports provide information regarding the status of current bookings.
Change Impact on results
Occupancy rate
+/-10% +/-28 MSEK
Ski pass prices
+/-10% +/-72 MSEK
Interest rate
+/-1% -/+11 MSEK
Salary costs
+/-10% -/+33 MSEK
Market price of electricity
+/-10% -/+ 2 MSEK
Exchange rate, NOK/SEK+/-10% +/-5 MSEK
In love with the mountains.
Our grooming machine driver has a very special feeling for snow.
With millimetre precision he sweeps over the sleeping ski slopes in order to, just before dawn, present 338 kilometres of perfect piste.
Every day.
Åke and his colleagues are some of our most important personnel. Together with the ski instructors, ski patrol, booking personnel and all the other personnel, they do their absolute best to offer you what we all enjoy and strive for: downhill skiing of the highest quality. With the love of the mountains as motivation, everything is possible – today we are the Nordic Region’s leading organiser of winter holidays, with fi ve well-known destinations in Sweden and Norway.
See you at the top!
Profits before taxes increased by MSEK 82 to MSEK 276 (194).
MAJOR POINTS DURING THE YEAR
Acquisition of Trysil, Norway’s lar- gest ski resort, was approved by the Norwegian Competition Authority.
Net sales and profits:
Net sales increased by MSEK 303 to MSEK 1,280.
Income before taxes increased by MSEK 82 to MSEK 276.
Income after taxes increased by MSEK 58 to MSEK 242.
Profit per share increased to SEK 6:19 (4:72).
An increased dividend is proposed at SEK 4:50 (3:00) per share.
The current booking situation at the beginning of the 2006/07 season was, at the end of September, 8% better in volume that at the same point in time last year.
LEGAL ORGANISATION
All operational in Sweden are under- taken in the parent company, SkiStar AB (publ), except for rental of Högfjällshotellet property in Sälen, which belongs to the subsidiary Sälens Högfjällshotell AB, and for certain smaller operations in the subsidiary Tandådalens Fjällhotell Service AB. The operations in Norway are conducted in the wholly-owned subsidiary SkiStar Norge AS. All of the subsidiaries within the Group are wholly-owned, with the exceptions of Hammarbybacken AB, which is 91% owned, and Norwegian subsidiary Hemsedal Booking AS, which is 65% owned. Hemsedal SkiSenter AS has the option to acquire the remaining shares in Hemsedal Booking AS in June 2008.
OPERATIVE ORGANISATION
SkiStar’s operations are divided into two business areas and five staff areas. The business area Destinations is compri- sed of five operative areas: Sälen, Åre, Vemdalen, Hemsedal and Trysil. The
other business area is Properties. The staff functions are Marketing, Sales, IT, Accounting/Finance/IR, Purchasing and HR/Guest Services.
The structure and size of the Group’s management group has changed during the year. Since 1 January 2006, the management group has been composed of seven individuals, compared with the previous twelve, and has focused on the operative decision making proces- ses. Strategic processes such as HR, IT, Marketing and Sales are now support units and provide operational mana- gement with documentation for their decision making. The new, smaller and more operative focus of the management group provides SkiStar with an impro- ved ability to react more quickly to an increasingly changing business environ- ment. The management group has, since 1 January 2006, been comprised of: the Managing Director, the Accounting and Finance Director, and the five destina- tion managers, one each from Åre, Vemdalen, Sälen, Hemsedal and Trysil.
STAFF FUNCTIONS
Accounting, finance, purchasing, CSR, environment and IR
The economy, finance, purchasing, CSR, environment and IR are organised under the Accounting and Finance Director.
Accounting principles and reporting routines, amongst other activities, are coordinated within the accounting function in order to achieve uniform reporting. In addition, the accounting department works with uniform models for financial management, including such areas as follow-up of the efficiency of the operations and of profitability. All credit risk management and interest rate hedging is handled centrally and follows determined policies. Invest or Relations, IR, provides information to the stock market in the form of annual reports, interim reports, press releases, analyst
meetings, and capital market conferen- ces, as well as publishing information on the company’s website. Certain elements of purchasing are handled centrally to achieve synergies. SkiStar’s work within the environmental and social responsibi- lity areas is presented on pages 30-31.
Human Resources and Guest Services
In order that all parts of the Group shall prioritise and work in a uniform man- ner with leadership and guest services, Human Resources is located at Group level under an HR manager. See also pages 26-28.
IT
IT is a strategically important area wit- hin SkiStar. This staff function is coor- dinated within the Group in order to benefit from and make possible the most positive effects of SkiStar’s combined resources.
Marketing and Sales
Marketing and Sales are coordinated within the Group in order to benefit from and make possible the most positive effects of SkiStar’s combined resources.
See also pages 29-31.
BUSINESS AREA PROPERTIES
Business Area Properties has been in operation since January 2005.
This business area is responsible for, amongst other things, creating profits and freeing up financial resources via the sale of older accommodations, and utilising these resources to develop and build new, modern accommodation at SkiStar’s destinations. More information regarding Business Area Properties is found on pages 46-47.
BUSINESS AREA DESTINATIONS
Business Area Destinations is divided into five operational areas: Sälen, Åre, Vemdalen, Hemsedal and Trysil. This business area is presented on pages 34-45.
GROUP OPERATIONS
91%
SKISTAR AB (PUBL) 556093-6949
SÄLENS HÖGFJÄLLSHOTELL AB
556200-6311
TANDÅDALENS FJÄLLHOTELL
SERVICE AB 556086-0990 SKISTAR NORGE AS
NO977107520
TRYSILFJELLET ALPIN AS NO948233169
TRYSILFJELLET GOLF AS NO982736846
HEMSEDAL SKISENTER AS NO912615707
VESLESTØLEN AS
NO979480024 HEMSEDAL FJELLANDSBY AS
NO985289158
HEMSEDAL BOOKING AS NO976716310
65%
HAMMARBYBACKEN AB 556650-2570
Legal Organisation
OPERATING INCOME AND OPERATING PROFIT PER BUSINESS AREA, MSEK
Sälen Åre Vemdalen Hemsedal Trysil Property 2005/06 2004/05 2005/06 2004/05 2005/06 2004/05 2005/06 2004/05 2005/06 2004/05 2005/06 2004/05
Net sales 523 472 306 265 82 70 173 170 197 - - -
Other income 2 9 2 3 0 1 0 0 1 - 85 45
Operating income 525 481 308 268 82 71 173 170 198 - 85 45
Operating expenses -338 -316 -222 -203 -59 -52 -133 -128 -126 - -27 0
Depreciation -60 -52 -30 -28 -10 -8 -29 -27 -28 - - -
Operating profit 127 113 56 37 13 11 11 15 44 - 58 45
Operating margin, % 24 23 18 14 16 15 6 9 22 - 68 100
Group-wide expenses are specified according to assessed degree of utilisation.
SPECIFICATION OF OPERATING INCOME AND EXPENSES, MSEK
Operating income 2005/06 2004/05 +/- +/-, %
Downhill skiing/lifts 718 545 173 32
Accommodation 195 162 33 20
Ski rental 116 91 25 27
Ski school 41 37 4 11
Sporting goods shops 27 24 3 13
Property 73 59 14 24
Capital gains* 84 45 39 87
Other** 117 72 45 63
Total operating income 1, 371 1, 035 336 32
Operating expenses
Cost of materials -70 -56 -14 25
Personnel costs -400 -313 -87 28
Other costs -435 -336 -99 29
Total operating costs -905 -705 -200 28
*Increase in Other income primarily due to refunded VAT of MSEK 29.
PROPERTY
HR/GUESTSERVICES ACCOUNTING/FINANCE/
IR/PURCHASING
MARKETING SALES MANAGING DIRECTOR/CHIEF EXECU-
TIVE OFFICER
IT
Operational Organisation
for success
VISION
SkiStar’s vision is to create memorable winter experiences as the leading ope- rator of European Alpine destinations.
SkiStar shall take a leading position in the conceptualisation, integration and development of these services.
GOAL Overall goal
By creating value for SkiStar’s guests, personnel and other interested parties, the value of the shareholders invested capital will increase. This focus has contributed significantly to SkiStar’s success and leading market position.
Financial goals
In order to make possible a proactive strategy and at the same time balance operating risks, SkiStar shall have a strong financial foundation. The goal is an equity ratio above 35%. At the current interest rate level, the return on equity shall amount to 14% and the
return on capital employed to 11%.
These targets are established on the basis of three-month treasury bills for which the average interest rate during financial year 2005/06 was 1.9%. The operating margin shall, in the long term, exceed 22%.
Operational goals
SkiStar’s growth target is that organic growth shall exceed inflation by at least 3% per year, in addition to any growth via acquisitions. Inflation in Sweden during the financial year was 1.6% and organic growth for comparable units was 7.2%.
Goal fulfilment
The overall goal is to increase the value of shareholders’ capital. During financial year 2005/06, the share price increased by 59% and it is proposed that divi- dends be increased by 50% to SEK 4:50.
The fulfilment of financial goals and the goal for organic growth is illustrated in
the table below. All financial goals were achieved during the financial year.
STRATEGIES
Concept and business model
The core business is alpine skiing with a focus on the guests’ expe rience.
Profitable and strategic operations within alpine skiing, ski schools, ski rental and the provision of accom modation shall, in the long term, be conducted within the company’s own organisation at the respective destina- tions.
The operations outside the core busi ness shall preferably be undertaken by external professionals.
- SkiStar shall work to ensure that all companies providing services at the alpine destinations maintain a high level of quality and service in order to strengthen the brand and to provide the guests with a better skiing expe- rience.
By creating value for SkiStar’s guests, personnel and other interested parties, the value of the shareholders investment
parts shall also be increased
GOAL FULFILMENT, FINANCIAL GOALS
2005/06 2004/05 2003/04 Goal
