Tivity Health — Investor Day (June 2018)
88 slides from Tivity Health's investor day presentation, Jun 1, 2018
Slide 1: The Road to 5 Million Enrolled Members – Investor Day 2018
June 1, 2018 The Road to 5 Million Enrolled Members Investor Day 2018 Exhibit 99.1
Slide 2: Safe Harbor Provisions
This presentation contains forward-looking statements that are based upon current expectations and involve a number of risks and uncertainties. These forward-looking statements speak only as of the date hereof. In order for Tivity Health to utilize the “safe harbor” provisions of the Private Securit
Slide 3: Tivity Health Investor Day Agenda
Tivity Health Investor Day Agenda 8:30 Opening Remarks: A Business Transformed, and Transforming Donato Tramuto, Chief Executive Officer 9:15 Levers of Growth: Driving Enrollment, Engagement & Member Share Paul Wimer, Chief Experience & Product Officer Steve Janicak, Chief Growth Officer 11:45 Finan
Slide 4: 2019 Revenue: expect net overall revenue growth
2019 Revenue Mosaic Wins and Losses Prime Buyer Growth SilverSneakers Engagement Growth Organic Medicare Advantage Growth We expect net overall revenue growth next year
Slide 5: Our Colleagues – Primary Campuses
Our Colleagues – 475 Colleagues 3 Primary Campuses Ashburn, VA Franklin, TN Chandler, AZ
Slide 6: Tivity Health Executive Leadership Team
Tivity Health Executive Leadership Team Donato Tramuto Chief Executive Officer Adam Holland Chief Financial Officer Steve Janicak Chief Growth Officer Bonnie Schirato Vice President People & Culture Paul Wimer Chief Experience and Product Officer Paul Edmisten Chief Information Officer Mary S. Flips
Slide 7: Our Values
Tivity Health Values Empowerment with Results Own it The decision AND the results. Excellence Be #1 or #2 in ALL that we do Dig deep and strive for excellence together. Provocative Challenge the status quo Ask “why not” and see opportunities where others see challenges. Trust Keep your word Be true
Slide 8: Our Vision and Mission
Transform the aging experience—reducing the burden of chronic conditions among older adults, enabling these to be their best years, and inspiring the next generation that the best is yet to come. Our Vision We empower older adults to live their best lives now—with vitality, dignity and purpose. We e
Slide 9: We have undergone a radical transformation as a company
© 2018 Tivity Health, All rights reserved. We have undergone a radical transformation as a company… …focused on relentless execution and compelling results. DONATO TRAMUTO
Slide 10: We have executed on a successful business transformation
We have executed on a successful business transformation We have: Re-structured organization Re-positioned company Re-ignited brands & products Re-invigorated culture Re-tooled customers & partnerships Re-focused on fundamentals A TRANSFORMATION Total Population Health Targeted Population Health Unf
Slide 11: We have rebuilt the business around key strategic fundamentals
We have rebuilt the business around 4 key strategic fundamentals Add new members in all Networks A 13.1M to 15.5M* SilverSneakers Eligibles 2.7M to 3.4M* SilverSneakers Enrollees * Mar 2016-Mar 2018 175K to 283K* Prime enrollees Collaborate with partners to introduce new products and services that l
Slide 12: And delivered powerful results
…And delivered powerful results $419M – $1.6B (1) GROWTH Shareholder value nearly quadrupled in 21 months 20% Revenue growth (2) With increasing profitability margins Increasing Customer and Market Share Market capitalization on 3/31/2018 compared to 6/30/2016 Q1 2018 vs. Q4 2016 Collaborative relat
Slide 13: And We Are Not Done…Significant Opportunity Ahead Of Us
And We Are Not Done…Significant Opportunity Ahead Of Us Greater share of activity (more ways, beyond gym) Massive, growing demographic Greater member share (more enrolled and participating) Greater client share (existing customers) New products addressing high-cost areas in health – physical, mental
Slide 14: Massive and Growing Market with Solid Fundamentals
Massive and Growing Market with Solid Fundamentals 300,000 LARGE GROWING MARKET PEOPLE TURN 65 EVERY MONTH 113M AGED 50+ 49M AGED 65+ U.S. Population Over 65+ (Population in MM) 1960 2060 2010 FAVORABLE MARKET CONDITIONS 6-8% Annual growth of MA/MS enrollees through 2020 35-38% Medicare Advantage pe
Slide 15: Broad-Based Leadership Position
Broad-Based Leadership Position 56+% MARKET SHARE share of Medicare Advantage 7 out of 10 CUSTOMER BASE largest MA plans offering SilverSneakers as a covered benefit 26 YEARS BRAND of experience 13% YOY growth in awareness 81 Net Promoter Score 14,000+ NETWORK participating locations including fitne
Slide 16: Our Experience Matters: Years of SilverSneakers Data
26 YEARS OF SilverSneakers® Our Experience Matters HAS GENERATED UNIQUE INSIGHTS FROM OUR DATA Call center events registered 5 MILLION Nearly Newsletter subscribers 1 MILLION Nearly Members in silversneakers.com Over Individual visits Nearly 2 MILLION 700 MILLION
Slide 17: An Opportunity: Social isolation is the new chronic disease
An Opportunity: Social isolation is the new chronic disease. © 2018 Tivity Health, All rights reserved.
Slide 18: The Cost of Social Isolation in Seniors
The Cost of Social Isolation 1 in 3 Seniors 65+ live alone, and 50% of those 85+ live alone Up to 50% Increase in mortality from isolation – more than obesity. Equivalent health impact of smoking 15 cigarettes per day Socially isolated individuals cost Medicare Advantage $137 more per month 15 Sourc
Slide 19: Our Blueprint for the Future: Beyond Physical Fitness and Beyond the Gym
Our Blueprint for the Future: Beyond Physical Fitness and Beyond the Gym Improve physical fitness, mobility and stability. Engage where they want, how they want, when they want MOVEMENT Combat loneliness, isolation and boredom by helping them build purposeful connections in community CONNECTION Impr
Slide 20: We are far more than a fitness program or gym benefit
© 2018 Tivity Health, All rights reserved. We are far more than a fitness program or gym benefit. We help health plans build meaningful connections to their members. We also engage members directly, getting them active, and keeping them healthier longer. DONATO TRAMUTO
Slide 21: Meet Our Members: Panel Discussion
© 2018 Tivity Health, All rights reserved. Meet Our Members: Panel Discussion MODERATOR: ARRA YERGANIAN
Slide 22: Next phase: from awareness to enrollment and engagement
© 2018 Tivity Health, All rights reserved. We are embarking on the next phase of our transformation: from awareness to enrollment and engagement. We’re building on the solid foundation we’ve built, migrating our approach and focusing on leveraging a scalable model that accelerates value creation for
Slide 23: Our Aspiration for the Future: 5 Million by 2020
Our Aspiration for the Future © 2018 Tivity Health, All rights reserved. 5 BY 2020 The Road to 5 Million Enrolled SilverSneakers Members
Slide 24: SilverSneakers Member Share Today
15.8M Medicare Eligibles1 3.7M Million Enrolled* Never Enrolled Eligible but have never actually enrolled and gone to a gym 12.1 M (76.6%) 2.5 M (15.8%) 1.2 M (7.6% of eligibles) Sporadic Users Enrolled but infrequent participation Actively Participating Monthly active users – those currently partic
Slide 25: SilverSneakers – Growing Member Share
SilverSneakers – Growing Member Share Our Goals: 5.0 M 5 million enrolled 1.8 million (11.4%) active monthly (participation rate)
Slide 26: How We'll Get There: Levers of Growth
© 2018 Tivity Health, All rights reserved. How We’ll Get There: Levers of Growth
Slide 27: The Road to 5 Million Enrolled SilverSneakers Members
Build more awareness, empowerment, and engagement in the eligible populations Deepen relationships with our partners and their instructors within our national networks Collaborate with partners to introduce new products and services that leverage our brand trust A B C D 5 BY 2020 Add new members in
Slide 28: Growth Team: Add new members in all three networks
5 BY 2020 Growth Team A B C D Add new members in all three networks The Road to 5 Million Enrolled SilverSneakers Members
Slide 29: Expanding Awareness
5 BY 2020 A B C D Expanding Awareness Build more awareness, empowerment, and engagement in the eligible populations The Road to 5 Million Enrolled SilverSneakers Members
Slide 30: Enrollment Premise – No one Understands the member better!
Enrollment Premise – No one Understands the member better! © 2018 Tivity Health, All rights reserved.
Slide 31: Members Know and Love The Brand
Members Know and Love The Brand 81 SilverSneakers Net Promoter Score* (2017, 2018) Most Recognized Senior Wellness/ Fitness Brand in 2018 at 71% +6 points from 2017 Source: * Tivity Health Annual Member Survey, 2017 and 2018, ** Catalyst Research Study 2017 and 2018 SilverSneakers
Slide 32: Member Segmentation
Member Segmentation From this research, we’ve segmented our members into different exercise profiles: Based on 26 years of experience, research and insights, we are targeting our messaging and marketing Tailored engagement strategies Enhance experience pilot design Digital strategy and content How w
Slide 33: Targeting Our Members: Social Exercise Enthusiasts
Emphasizing the social aspect of our fitness classes and the strong dance element to appeal to Social Exercise Enthusiasts Targeting Our Members: Social Exercise Enthusiasts
Slide 34: Targeting Our Members: Solo Maintainers
The strong male image and use of free weights is intended to show SilverSneakers as going beyond just classes for ladies. “Thousands of participating locations” addresses need for convenience. Targeting Our Members: Solo Maintainers This online experience appeals to Solo Maintainers.
Slide 35: Targeting Our Members: Insecure Health Seekers
It was served in doctors’ offices where IHS (who have more health needs and concerns) are more likely to be found, and features language about senior-certified instructors and classes designed for older adults. Targeting Our Members: Insecure Health Seekers (IHS) This magazine cover wrap is targeted
Slide 36: SilverSneakers Product Funnel
SilverSneakers Product Funnel The SilverSneakers product funnel guides efforts to reduce consumer leakages and drive incremental engagement through the key. UNDERSTAND OUR CONSUMER, NETWORK PARTNERS AND INSTRUCTORS AWARENESS ENROLLMENT ENGAGEMENT CORE PRODUCT & TECHNOLOGY
Slide 37: We Have Come A Long Way In 20 Months: Consumer Awareness Metrics
Since Jan 2017 compares Jan 01, 2017 vs current. Year Over Year (YOY) compares Jan 01, 2018 to current vs the same date range in 2017 These metrics for engagement, while not business outcomes in and of themselves, are tracked as leading indicators for predicted future enrollment and participation. F
Slide 38: Engagement Levers
1. Call Center Transformation 2. Territory Management 3. Digital Experience 4. Beyond Fitness 5. Enable, Automate & Scale 6. Integrated Offerings 7. SilverSneakers App 5 BY 2020 Engagement Levers A B C D Build more awareness, empowerment, and engagement in the eligible populations The Road to 5 Mill
Slide 39: Call Center Transformation
Lever # 1 Call Center Transformation Transformation to Experience Center © 2018 Tivity Health, All rights reserved.
Slide 40: Call Center Operations: Moving From Tactical to Strategic
Call Center Operations: Moving From Tactical to Strategic 0 We are aggressively improving our call center operations and building additional capabilities to support our enrollment and engagement initiatives and shift from cost center to blended profit center Platform Enhancements: Automation to bett
Slide 41: Experience Center Q1 Results - SilverSneakers
Experience Center Q1 Results - SilverSneakers COST BASE – CONSISTENT 2017 / 2018 INBOUND 351,239 total (37.7%) 4.9% increase from 2017 OUTBOUND 581,474 IVR total (62.3%) 0 in 2017 5 INITIATIVES SUPPORTED Q1 Marketing Aetna Appreciation Event Listening Post Surveys Flip 50 On-Demand Video Q1 TOTAL VO
Slide 42: Territory Management
Lever # 2 Territory Management Transforming our Account Managers © 2018 Tivity Health, All rights reserved.
Slide 43: Strategic Territory Management
We refocused our field team to work with physicians, community centers, gyms and other places where seniors engage to increase awareness of SilverSneakers and drive enrollment and participation. The Pieces are in Place Focused on strategic regions with potential to drive the greatest impact Variable
Slide 44: We are going Digital with SilverSneakers
Lever # 3 We are going Digital with SilverSneakers Taking our experience outside of the gym and directly to the member © 2018 Tivity Health, All rights reserved.
Slide 45: SilverSneakers On-Demand Fitness Programs
SilverSneakers On-Demand Fitness Programs © 2018 Tivity Health, All rights reserved.
Slide 46: SilverSneakers On-Demand Fitness Programs: Monthly Statistics
SilverSneakers On-Demand Fitness Programs Monthly Statistics: 58 videos | 17,000+ monthly plays | 65% engagement1 Past 3 Months: Over 51,000 Total Plays 1. Engagement represents average % of video content consumed
Slide 47: Skate to where the puck is going, not to where it has been
“Skate to where the puck is going, not to where it has been.” © 2018 Tivity Health, All rights reserved. Wayne Gretzky
Slide 48: Evolving Beyond Fitness
Lever # 4 EVOLVING BEYOND FITNESS Moving from fitness and addressing physical, mental, social health and well-being © 2018 Tivity Health, All rights reserved.
Slide 49: Opportunity to Solve Broader Challenges
GETTING THEM ACTIVE GETTING THEM CONNECTED GETTING THEM HEALTHIER IMPROVING THEIR MOBILITY IMPROVING THEIR MINDSETS, SLOWING COGNITIVE DECLINE Opportunity to Solve Broader Challenges Related To Mobility, Independence And Health
Slide 50: Social Isolation: A Challenge We Can Address
Social Isolation: A Challenge We Can Address SOCIAL ISOLATION 62-75% Increased risk of mortality more than obesity, high cholesterol and high blood pressure 70% Higher risk of dying from any cause in isolated women 50% Increased risk of premature death from loneliness and social isolation IMPACTING
Slide 51: Evaluating Impacts of SilverSneakers on Social Isolation: MIT AgeLab
Evaluating Impacts of SilverSneakers on Social Isolation and Loneliness MIT AgeLab Collaboration DO REDUCED SOCIAL ISOLATION AND LONELINESS ACCRUE TO BETTER HEALTH? Do SSFP participants have more meaningful social connections? Social Isolation Does the impact of SSFP on social isolation and health r
Slide 52: SilverConnect: Building Communities & Relationships
SilverConnect Building Communities & Relationships EVENTS COMMUNITY COMPANIONSHIP
Slide 53: Enable, Automate, and Scale
Lever # 5 Enable, Automate, and Scale Transforming our technical and data infrastructure to support 5 million and beyond Paul Edmisten © 2018 Tivity Health, All rights reserved.
Slide 54: TODAY: We engage our members through only a few channels
TODAY: We engage our members through only a few channels with limited automation to deliver a superior experience She receives her packet with her health plan card. Tivity also sends a welcome packet that includes her SilverSneakers card. LATE DEC She could visit our web site to learn more about Sil
Slide 55: Future member journey: Jenny signs up and is connected
Jenny signs up for a Medicare Advantage plan and hears about SilverSneakers. Using the enrollment device, she registers a single sign-on account immediately. HEALTH PLAN Jenny’s account information is immediately connected throughout our network (our website, our mobile app, our call center, PLs and
Slide 56: Leveraging Data, Technology And Analytics To Improve Their Experience
Leveraging Data, Technology And Analytics To Improve Their Experience We are improving our tracking, monitoring and insight capabilities to tailor interactions around their unique needs and interests, or serve up content they’re likely to consume. We are partnering with the gyms and software provide
Slide 57: Integrated Offerings
Lever # 6 Integrated Offerings Leveraging our deep expertise and programs to build powerful, integrated systems © 2018 Tivity Health, All rights reserved.
Slide 58: Designing to support 50+ healthy lifestyles
Designing to support 50+ healthy lifestyles
Slide 59: Life Is Changing For The 50+: Key Takeaways
Life Is Changing For The 50+ 50s are a time of change – priorities, obligations, outlook, confidence and physiological change, suggesting multiple solutions are required Health and longevity are key motivations While some prefer a gym, most prefer outdoors or home to exercise, with walking a favorit
Slide 60: Market Players Approach Health Through a Single Lens
However, Market Players Approach Health Through a Single Lens F I T N E S S N U T R I T I O N REST & RECOVERY
Slide 61: Introducing…
Introducing…
Slide 62: Embedded Video in Presentation
Embedded Video in Presentation
Slide 63: A Unique One-Stop Healthy Lifestyle Program for 50+
A Unique One-Stop Healthy Lifestyle Program for 50+
Slide 64: Powered by our unrivaled national network of providers
Powered by our unrivaled national network of providers and perspectives on active aging Membership to 10,000 fitness locations Expert Advice on Nutrition to support active aging Discounted Access to more than 17,000 Massage, Acupuncture and Chiropractic services
Slide 65: SilverSneakers Anywhere Mobile App
Lever # 7 SilverSneakers Anywhere Mobile App © 2018 Tivity Health, All rights reserved.
Slide 66: Critical to Driving Engagement: SilverSneakers App
Critical to Driving Engagement: SilverSneakers App
Slide 67: Strategic Partnerships
8. Strategic Partnerships 5 BY 2020 A B C D Collaborate with partners to introduce new products and services that leverage our brand trust The Road to 5 Million Enrolled SilverSneakers Members
Slide 68: Strategic Partnership Development
Lever # 8 Strategic Partnership Development Targeting specific partners to introduce new products to our members © 2018 Tivity Health, All rights reserved.
Slide 69: Strategic Partnership Framework
Strategic Partnership Framework INCREASE MEMBER REACH AND ENGAGEMENT GENERATE MEMBER DRIVEN REVENUE STREAMS BUILD AFFINITY AND CUSTOMER RETENTION CREATE ABOVE THE LINE PARTNERSHIPS THAT SUPPORT OUR “WHY”
Slide 70: Examples - Driving Engagement and Growing New Revenue Sources through Partnerships
3 Examples - Driving Engagement and Growing New Revenue Sources through Partnerships
Slide 71: Our Network
9. Our Network 5 BY 2020 A B C D Deepen relationships with our partners and their instructors within our national networks The Road to 5 Million Enrolled SilverSneakers Members
Slide 72: Our Network Co-Marketing Opportunities: Enrollment and Engagement
Lever # 9 Our Network Co-Marketing Opportunities: Enrollment and Engagement Adam Holland © 2018 Tivity Health, All rights reserved.
Slide 73: Examples of Partnerships with our Network
Examples of Partnerships with our Network Aqua workout combining cardio training with muscle toning in the massaging environment of the pool. Fitness partner provided Tivity with member data The call came from SilverSneakers Gathering member feedback as well Aqua Programming Lapsed Member Calls Mark
Slide 74: Delivering Shareholder Value, Positioning for Continued Growth
Adam Holland Chief Financial Officer Delivering Shareholder Value, Positioning for Continued Growth © 2018 Tivity Health, All rights reserved.
Slide 75: Affirming Guidance, Bold Outlook for 2021
Affirming Guidance, Bold Outlook for 2021 AFFIRMING GUIDANCE FOR 2018 $607M to $625M Total Revenue Range +$100M In Free-Cash-Flow $2.12 to $2.20 Earnings Per Share Range $139M to $144M EBITDA Profitable growth, stable cash flow, capital light
Slide 76: Strong Revenue and EBITDA Growth
Strong Revenue and EBITDA Growth We have consistently driven strong (double digit CAGR%) growth in both Revenue and EBITDA since the transformation Revenues (in millions) 2015 $452.1 2016 $501 2017 $556.9 2018G (1) $616 CAGR 0.10861820178879317 615.99972928162492 (1) Midpoint of 2018 guidance Adjust
Slide 77: Each of our Primary Business Lines has been Contributing to our Growth
Each of our Primary Business Lines has been Contributing to our Growth SilverSneakers Revenue (M’s) $356M $454M 8.5% CAGR Prime Revenue (M’s) $30M $85M 42.3% CAGR Highlights: Solid core businesses Strong fundamentals Organic growth outpacing market Building platform for broader monetization
Slide 78: Strong Underlying Fundamentals, Which Fuels our Business Model
Strong Underlying Fundamentals, Which Fuels our Business Model Average Enrollment %1 Average Monthly Participation Rate %2 17.9% 22.2% 6.4% 7.3% 17M 93M We’ve focused on and taken advantage growing eligibles, and not done enough to activate and drive engagement… that’s WHY we’re focused there now! T
Slide 79: Our Business Model is Driven Around Enrollment and Engagement
Our Business Model is Driven Around Enrollment and Engagement Fixed Per Member Per Month (PMPM) 5.8M Hybrid (PMPM+Fee-For-Service) 10.0M 15.8M Total Eligible Members
Slide 80: Increasing Enrollment Drives Value
Increasing Enrollment Drives Value FOR EVERY 100K ENROLLED ~32k Will actively participate ~$8M REVENUE GENERATED Doing this across 5M members means $100M in new revenue
Slide 81: Financial Profile & Outlook: Recap
Financial Profile & Outlook: Recap Strong Revenue and EBITDA growth since transformation All lines of business contributing to growth Strong cash generation and ongoing debt reduction Strong underlying fundamentals in our business models Investments in engagement offer clear path to ROI Affirming gu
Slide 82: Concluding Remarks and Q&A
Concluding Remarks and Q&A Donato Tramuto and Executive Leadership Team © 2018 Tivity Health, All rights reserved.
Slide 83: Recap Points
Recap Points Our Brand and experience matter We are moving beyond the gym – taking a holistic approach to the members 9 Levers currently in play to help realize our enrollment goal of 5 million SS Members Highly focused executive team The strongest financial position since 2010 We expect net revenue
Slide 84: Questions?
Questions? © 2018 Tivity Health, All rights reserved.
Slide 85: Thank you for your time today
June 1, 2018 Thank you for your time today Investor Day 2018
Slide 86: Appendix
Appendix © 2018 Tivity Health, All rights reserved.
Slide 87: Reconciliation of Non-GAAP Measures to GAAP Measures
Reconciliation of Non-GAAP Measures to GAAP Measures Reconciliation of EBITDA from Continuing Operations Guidance, Non-GAAP Basis to Income from Continuing Operations Guidance, GAAP Basis (In millions) (1) EBITDA from continuing operations guidance is a non-GAAP financial measure. The Company believ
Slide 88: Reconciliation of Non-GAAP Measures to GAAP Measures (continued)
Reconciliation of Non-GAAP Measures to GAAP Measures (continued) Reconciliation of Adjusted EBITDA from Continuing Operations, Non-GAAP Basis to Income from Continuing Operations, GAAP Basis (In thousands) Adjusted EBITDA from continuing operations is a non-GAAP financial measure. The Company exclud