World Gym Corporation · TWSE:2762
World Gym — World Gym Taiwan — Q3 2024 Earnings Presentation
36 slides from World Gym's earnings presentation, Nov 13, 2024
Slide 1: World Fitness Services Ltd.
World Fitness Services Ltd. November 2024 (2762 TT/TW) STRICTLY PRIVATE AND CONFIDENTIAL
Slide 2: Company Introduction
Company Introduction 2
Slide 3: Investment Thesis
INVESTMENT THESIS Global Leadership Position Scalable, Multi-Tiered Model High Revenue Predictability Operational Synergies Strong Cash Flow and High-Growth Expansion and Efficiency Resilience Potential 3
Slide 4: World Gym Taiwan at a Glance
WORLD GYM TAIWAN AT A GLANCE 2001 Founded The Largest Gym Operator in Taiwan 2024 Listed 2x larger than 2nd competitor by revenue Revenue Breakdown Taiwan Market Share Landscape (2023) (2023) Membership Personal Training By Revenue 20% 49% 50% 55% Financial Performance 25% (NT$mn) 9,465 8,863 9,428
Slide 5: With a Broad Portfolio Across Taiwan
WITH A BROAD PORTFOLIO ACROSS TAIWAN City # of Clubs 台北地區 (Taipei) 1 52* 桃園地區 (Taoyuan) 11 新竹地區 (Hsinchu) 5 苗栗地區 (Miaoli) 3 Headquarter (Taichung) 台中地區 (Taichung) 21 彰化地區 (Changhua) 3 嘉義地區 (Chiayi) 1 台南地區 (Tainan) 9 高雄地區 (Kaohsiung) 13 基隆地區 (Keelung) 1 宜蘭地區 (Yilan) 2 花蓮地區 (Hualien) 2 屏東地區 (Pingtung)
Slide 6: Our Clubs Offerings
OUR CLUBS OFFERINGS World Gym Regular (97) World Gym Express (30) FITZONE (3) As of Nov. 2024 6 Notes: 1. World Gym will have 130 clubs in operation by the end of 2024. 2. Return on Invested Capital
Slide 7: Built Through 20 Years of Unprecedented Growth
BUILT THROUGH 20 YEARS OF UNPRECEDENTED GROWTH • Acquired World Gym • Started club • In 2017, CDIB invested a International, gaining acquisition from • 14 new clubs minority's sake in WGT exclusive global operating other local opened in total, • 54 new clubs including 38 rights and earning operators
Slide 8: World Gym's Value Proposition
WORLD GYM’S VALUE PROPOSITION The WGT management team has been working seamlessly together for around a decade, driving the company to grow from less than 10 clubs 20 years ago to the current undisputed market leader in Taiwan with over 120 clubs. OMNICHANNEL SUPERIOR DIGITAL FITNESS CUSTOMER SERVIC
Slide 9: Experienced Management Team
EXPERIENCED MANAGEMENT TEAM The WGT management team has been working seamlessly together for around a decade, driving the company to grow from less than 10 clubs a 20 years ago to the current undisputed market leader in Taiwan with over 120 clubs. • Chairman, President & • Joined WGT in 2011 as CFO
Slide 10: Taiwan Industry and Competitive Landscape
Taiwan Industry and Competitive Landscape 10 10
Slide 11: Favorable Industry Tailwinds
FAVORABLE INDUSTRY TAILWINDS Rising Health Aging Population Increasing Social Rising Entry And Exercise Driving Fitness Network Sharing Barriers for New Awareness Industry Growth on Fitness Gym Operators • Surveys show over 30% of • Over the past few years, the • Prevalence of social media • Large g
Slide 12: Taiwan Fitness Market Snapshot
TAIWAN FITNESS MARKET SNAPSHOT Taiwan Fitness Clubs Market Size Taiwan Fitness Penetration Rate – By Population NT$, in millions Population Rate of Penetratio Population Sports Population of attending attending n Year above aged Participation engaged in private 20,000 1,200 private rate 15 Rate spor
Slide 13: Taiwan Remains Under-Penetrated on a Global Level
TAIWAN REMAINS UNDER-PENETRATED ON A GLOBAL LEVEL Low gym penetration and density in Taiwan suggests tremendous growth potential. Fitness Market Size (2023) Fitness Membership Penetration (2023) (US$ mm) 12,000 (%) 35,000 25. 0% 22.0% 10,000 20.3% 20. 0% 16.9% 7,000 8,000 13.6% 13.4% 5,500 15. 0% 6,
Slide 14: Taiwan Competitive Landscape
TAIWAN COMPETITIVE LANDSCAPE Taiwan Presence Since 2001 2005 2008 2012 2015 2000 # of Clubs 1301 762 13 7 6 5 # of Clubs (2024 Target) ~130 792 -- -- -- -- # of Members ~450k1 ~278k2 -- -- -- -- Market Share (%) 55%1 25%2 -- -- -- -- Full-service Type Low-cost high value Full-service Full-service Fu
Slide 15: Organic Growth in Taiwan Capturing Significant Whitespace
ORGANIC GROWTH IN TAIWAN CAPTURING SIGNIFICANT WHITESPACE Significant whitespace remains in Taiwan fitness market, implying a strong growth potential for WGT. Region: Taoyuan, Hsinchu, Miaoli Region: Taipei Metro Area Population: 3.8 million Population: 7.0 million 2028 Fitness Membership Penetratio
Slide 16: Strengthening Southern S-Shape Semiconductor Corridor Presence
STRENGTHENING SOUTHERN S-SHAPE SEMICONDUCTOR CORRIDOR PRESENCE Tainan Science Park Kaohsiung Science Park Baolai Zone (Planned) Ciaotou Science Park Nanzih Technology Industrial Park Asia Smart Renwu Industrial Park Technology Innovation Park Hofa Industrial CBI IC Design Center Park New Material Re
Slide 17: Detailed Analysis Remains Fundamental to Our Club Opening
DETAILED ANALYSIS REMAINS FUNDAMENTAL TO OUR CLUB OPENING Nearby Retail Stores Population Age Distribution Fitness Traffic Penetration Convenience Competitor Retail Stores 17
Slide 18: Our Capabilities Create Barriers to Entry
OUR CAPABILITIES CREATE BARRIERS TO ENTRY Scale Brand Network Real Estate Digital New Services Culture 18
Slide 19: Company Outlook and Strategy – The Acquisition of WGI
Company Outlook and Strategy – The Acquisition of WGI 19
Slide 20: WGI: A Legacy of Fitness Excellence
WGI: A LEGACY OF FITNESS EXCELLENCE Since 1976 The Timeless Icon of Fitness ▪ Founded by Fitness Legend Joe Gold ▪ 48 Years of Proven Excellence ▪ Established at California's Iconic Muscle Beach ▪ Entered Taiwan in 2001, Now Taiwan's Largest Fitness Brand 20
Slide 21: World Gym Global Expansion at a Glance
WORLD GYM GLOBAL EXPANSION AT A GLANCE 12 COPYRIGHT © 2024 WORLD GYM TAIWAN ALL RIGHTS 21
Slide 22: World Gym International Global Footprint
WORLD GYM INTERNATIONAL GLOBAL FOOTPRINT Canada Germany USA 271 Mexico India El Salvador Grand Cayman Egypt Taiwan Costa Rica Clubs Brazil Australia Taiwan1 Australia USA Canada Egypt Germany 130 49 32 27 11 In Negotiation Brazil Mexico Grand Cayman El Salvador Costa Rica India 10 9 1 1 1 In Negotia
Slide 23: Strategic Rationale for Acquiring World Gym International
STRATEGIC RATIONALE FOR ACQUIRING WORLD GYM INTERNATIONAL Autonomy For Unlocking Untapped Synergies, Operational Data-Driven Innovation Global Expansion Global Potential Efficiency, and Brand Leadership and Personalization Full control of the World Gym WGT leverages its Integrating advanced systems
Slide 24: Autonomy for Global Expansion
AUTONOMY FOR GLOBAL EXPANSION With full ownership of the World Gym brand, World Gym Taiwan (WGT) gains the autonomy to expand into new markets without the need for master franchise agreements or lengthy negotiations. This strategic freedom enables WGT to act swiftly on emerging opportunities, positi
Slide 25: Growth Potential: World Gym's Path to Global Scale
GROWTH POTENTIAL: WORLD GYM’S PATH TO GLOBAL SCALE Company Name PLANET FAST FITNESS FITNESS SMARTFIT BASIC-FIT JAPAN Total Members (K) 17,000 3,800 3,352 710 900 Total # of clubs (Unit) 2,600 1,500 1,400 1,055 271 (Including Pre-Sale) Revenue (US$mn) 1,071 850 1,132 109 302 Market Cap (US$mn) 6,922
Slide 26: Long-Term Expansion Plan and Outlook
LONG-TERM EXPANSION PLAN AND OUTLOOK Taiwan – 250 New Locations Asia – 250 New Locations Self-Owned 500 2,000 Franchise 26
Slide 27: Synergies, Operational Efficiency, and Brand Leadership
SYNERGIES, OPERATIONAL EFFICIENCY, AND BRAND LEADERSHIP Proven Expansion Comprehensive Integrated Forecasting World-Class Success Digital Management & Marketing Strategy Training System 27
Slide 28: Inheriting a Legacy, Building a Global Community
INHERITING A LEGACY, BUILDING A GLOBAL COMMUNITY 28
Slide 29: Financial Information
Financial Information 29
Slide 30: 3Q 2024 Income Statement – Actual
3Q 2024 INCOME STATEMENT – ACTUAL NT$mn 3Q24 3Q23 YoY YTD24 YTD23 YoY Revenue 2,475 2,453 0.9% 7,275 7,022 3.6% Gross Profit 377 412 -8.6% 1,193 1,148 4.0% Operating Expenses (278) (291) -4.2% (777) (779) -0.2% Operating Profit 99 121 -19.0% 416 369 12.8% Non Operating Income/(Loss) (17) (15) - (45)
Slide 31: Financial Summary
FINANCIAL SUMMARY NT$mn 2020 2021 2022 2023 Revenue 9,465 7,834 8,863 9,428 Gross Profit 2,217 1,031 1,426 1,551 Operating Expenses (992) (895) (941) (1,040) Operating Profit 1,225 136 485 511 Non Operating Income/(Loss) (954) (64) (122) (67) Pretax Income 271 72 363 444 Tax Expenses (230) (40) (60)
Slide 32: 3Q 2024 Balance Sheet
3Q 2024 BALANCE SHEET NT$mn 2024/9/30 % 2023/9/30 % Cash and cash equivalents 995 6% 293 2% Current financial assets at amortized cost 554 3% 930 5% Accounts and notes payable 148 1% 171 1% Current Assets 1,852 11% 1,534 9% Property, plant and equipment 5,681 33% 5,580 33% Right of use assets 9,011
Slide 33: 9M 2024 Cash Flow Statement
9M 2024 CASH FLOW STATEMENT NT$mn 9M24 9M23 Beginning Balance 424 785 Operating Cash Flow 1,769 1,755 Capital Expenditures (911) (710) Investments and Others 58 (33) Financing Cash Flow (346) (1,504) Ending Balance 995 293 34
Slide 34: Dividend Payout & Capex
DIVIDEND PAYOUT & CAPEX 5.86 5.50 5.50 2021 2022 2023 PAYOUT RATIO (%) 1912% 201% 167% DIVIDENT YIELD (%) 5.72% 5.72% 6.09% CAPEX (NT$ MN) 1,111 1,023 878 CAPEX TO SALES (%) 14% 12% 9% 1 . T he Board of Directors has ap p roved a 2023 cash dividend of NT $5.86/share, with the ex -dividend date set f
Slide 35: Appendix
Appendix 36
Slide 36: Disclaimer
Disclaimer 本簡報的資訊係根據當時之主、客觀因素，對過去、現在及未來之營運彙總與評估；其中含有前瞻性之論述，將受風險、不確定性及推論 所影響，部分將超出我們的控制之外，實際結論可能與這些前瞻性論述大為不同。 簡報中所提供之資訊 (包含對未來的看法)，並未明示或暗示地表達或保證其具有正確性、完整性及可靠性；亦不代表本公司、產業狀況及後 續重大發展之完整論述。 對未來的展望，反應公司截至目前為止之看法。這些若有任何變更或調整時，本公司並不負責隨時提醒及更新。 本簡報及其內容未經本公司書面許可任何第三者不得任意取用。 37