Gym Group Plc · LSE:GYM
Gym — The Gym Group — H1 2023 Earnings Presentation
33 slides from Gym's earnings presentation, Sep 12, 2023
Slide 1: Half Year Results 12 September 2023
Half Year Results 12 September 2023
Slide 2: Forward-looking statement disclaimer
Forward-looking statement disclaimer This presentation and information communicated verbally to you may contain certain projections and other forward-looking statements with respect to the financial condition, results of operations, businesses and prospects of The Gym Group ple. These statements are
Slide 3: Presenters: John Treharne, Luke Tait, Ann-Marie Murphy, Will Orr
John Treharne Luke Tait Ann-Marie Murphy Will Orr
Slide 4: Overview
group Overview
Slide 5: Half year highlights
to 867k (H1 2022: 790k) vs H1 2022 LFL' up 7% Offsetting cost inflation to maintain EBITDA An encouraging vs H1 2022 Two new sites by £6.4m since Dec 2022 Bank facility extended to Oct 2025 Accelerating new openings Enhancement in existing sites of £7m Will Orr appointed CEO & Simon Jones as NED Enc
Slide 6: Financial update
Financial update
Slide 7: Financial summary
Financial summary (Jun 2022 restated?: -£7.2m) S (Jun 2022: £7.5m) (Dec 2022: £76.1m) \ ( . Members ARPMM Revenue Group Adjusted EBITDA Less, jormalised Rent! 867k £18.81 £99.8m one) £17.2m +10% +8% +19% 1% +77k vs PY +£1.45 vs PY +£15.6m vs PY +£0.2m vs PY (Jun 2022: 790k) (Jun 2022: £17.36) (Jun 2
Slide 8: Group adj. EBITDA LNR of £17.2m
Group adj. EBITDA LNR! of £17.2m H12022 £m £m H12023__ Restated” YoY % Revenue 99.8 84.2 15.6 19% } en | Cost of Sales 4) (0.8) (0.6) (75%) Gross Profit 98.4 83.4 15.0 18% Site costs (83.3) (41.8) (is) (28%) Other Income - C3 (0.3) Central Cests (10.0) (8.4) (1.6) (19%) Normalised Rent (7.9) (16.5)
Slide 9: Membership volume, ARPMM and LFL revenue
120% 110% 100% 90% 80% 70% 60% Membership volume ARPMM LFL Revenue
Slide 10: ARPMM growth of 8% from price optimisation and higher LIVE IT penetration
ARPMM growth of 8% from price optimisation and higher LIVE IT penetration ARPMM (£) +8% 17.36 H12022 H2 2022 H12023 @ the gym group Average DO IT/Standard headline rate (£) LIVE IT/Ultimate penetration (%) £23.00 £22.00 £21.00 £20.00 £19.00 £18.00 £17.00 a 28.7% 2021 ==2022 ===2023 HY 2022 29.6% FY
Slide 11: Market pricing continues to move up
Market pricing continues to move up Average difference to The Gym Group in competing locations Dec 2021 Dec 2022 Summer 2023 @ ‘cvs: +£4.12 +£2.33 +£2.17 Orueecm +£4.48 +£235 +£2.67 D rts +£4.06 +£3.83 +£4.46 © the gym group comonycompiedaats
Slide 12: Strong cash flow generation
Strong cash flow generation £m Es (0.6) 17.2 (0.2) Group Adj. Movement in Maintenance Group Operating Non-Underlying Interest on Free Cash Flow Expansionary Other Cash flow before EBITDALNR Working Capital Capex Cash Flow Costs Bank Debt & Capex movement in debt Finance Leases ie ‘ol Interim Results
Slide 13: Capital expenditure and new sites opened
2 organic new sites opened so far in 2023 Tech & Data investment includes 3-tier membership infrastructure 24 Maintenance New Sites (including leases) Tech & Data Brand Relaunch Expansionary Capex! Enhancement (including leases) Other Maintenance Maintenance Capex! Total Cash Flow Capex? Movement in
Slide 14: Net debt reduced by £6.4m
Net debt reduced by £6.4m £m H12023 FY 2022 4H12022 Bank facilities 80.0 80.0 80.0 Lease facilities! 15.0 15.0 125 Total facilities 95.0 95.0 925 RCF drawn (63.0) (70.0) (57.5) Cash & cash equivalents 5.1 5.4 69 Bank net debt (57.9) (64.6) (50.6) Finance lease indebtedness (11.8) (11.5) (7.0) Non-Pr
Slide 15: Longer term bank funding secured
Longer term bank funding secured @) Facilities extended to Oct 2025 @) Barclays joins HSBC and NatWest in syndicate ©) COVID-related covenants removed @) Net debt to EBITDA LNR leverage! covenant is 3.0x Funding secured from supportive banking partners for the future G@ the gym group reierto x for d
Slide 16: Current trading and outlook
Current trading and outlook 2 Recent trading 2023 Full year outlook Investment in capex * Good momentum in H1 2023... * Revenue growth from yield * Self-financed from Free Cash + ..Continuing into July and August and new openings Flow! * Expected to broadly offset * 4to 5 new openings expected cost
Slide 17: Chief Operating Officer
Chief Operating Officer > = Q © 5 = = fe} = < is x
Slide 18: Low cost gym sector growing sites and members
Low cost gym sector growing sites and members No. of low cost Gyms 2022 No. of low cost Gyms 2023 Number of members (m) 10.3 +4.0% 99 +115% 300 (48%) 345 (49%) 2022 2023 mPureGym =TGG mJDGyms © Other mPureGym =TGG mJDGyms © Other Public Mid-market mLow cost @the gum group rcsexprsisnes.unez078 Ineri
Slide 19: 24 25
1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25
Slide 20: Accelerating new openings
Accelerating new openings a C 4 H1 2023 H2 2023 2024 Two new openings in H1 2023 4-5 openings planned in H2 10-12 openings planned in 2024 * Accrington - Town * 2-3 Greater London r * Edinburgh Corstophine - Urban * 1Urban Residential Residential * 1Town Targeting locations that give the best return
Slide 21: Serving the needs of today's members
Serving the needs of Sustaining high levels of member today's satisfaction & engagement members Good operational Overall Satisfaction Online ratings delivery 57% members rate 5/5 4.5 Trustpilot 93% rate at least 4/5 4.5 Google reviews Driving member Visits per member App usage engagement +21% since
Slide 22: Serving the needs of today's members: equipment
Serving the needs of today’s members New style free weights lifting rigs increasing demand for strength rovides 3x the capacity in the existing footprint Additional functional training equipment and new focal point storage enhancing class delivery Changes in format: roll-out of new equipment Extende
Slide 23: Serving the needs of today's members: HYROX
Serving the needs of today’s members Example: HYROX ™ i lr i Member feedback “HYROX are so great they actually make you work out. It's very good, especially the instructors who get you to use a lot of the cardio and weights. | would recommend the class - they are great ona Monday evening at 6:10.” I
Slide 24: 5-tier price architecture
5-tier price architecture trials encouraging 3-tier Membership Structure New lower priced off-peak membership Initial results encouraging Improved premium membership at higher price point Ongoing testing, evaluation and optimisation Incremental volume from Lower entry prices to drive price-sensitive
Slide 25: Driving Social Value and reducing energy usage
Driving Social Value and reducing energy usage health & wellbeing £756m of Social Value 20% on H1 2022 2023 engagement ferelicne | nin ~\ Our employees’ & members’ * Record member visits in 2022 resulted in * Over 32m visits to our gyms in H1 2023: up + — Expect to exceed 2022 Social Value in * — Co
Slide 26: Summary & Outlook
Summary & Outlook On track to deliver Improved funding Investment in Strengthened full year plan position customer Board proposition @ the gym group IntrimResuts -2028
Slide 27: Introduction
Introduction
Slide 28: Will Orr introduction
Will Orr introduction Oo —p Experience Why The Gym Group? Initial focus: + 30 years in consumer businesses . Strong proposition. growing * Immersion more * FY 2023 trading * Resilient business model; clear , , * Growth track record value drivers * ‘Next Chapter’ strategy * Majority subscription base
Slide 29: Slide 29
Slide 30: Business KPIs (5 year)
Business KPIs (5 year) Financial H12023 H12022 H12021 H12020 H12019 YoY Revenue 998 84.2 29.3 37.3 74.0 19% Group Adj. EBITDA LNR 72 17.0 (8.1) (8.2) 24.0 1% Group Operating Cash Flow 77 94 (3.4) (4.0) 18.7 88% Group Operating Cash Flow Conversion 102.9% 55.2% 423% 49.0% 779% 86% Expansionary Capita
Slide 31: Membership volume, ARPMM and LFL revenue
120% 0% 100% 90% 80% 70% 60% 50% Membership volume ARPMM LFL Revenue
Slide 32: Definition of non-statutory measures
Definition of non-statutory measures Group Adjusted EBITDA LNR - operating profit before depreciation, amortisation, share based payments costs, non-underlying items and Normalised Rent. Normalised Rent - the contractual rent that would have been paid in normal circumstances without any agreed defer
Slide 33: Thank you
ey Thank you