Viva Leisure Ltd. · ASX:VVA
Viva Leisure — FY2022 Earnings Presentation
40 slides from Viva Leisure's earnings presentation, Aug 18, 2022
Slide 1: FY2022 Full year results presentation
FY2022 Full year results presentation 18 AUGUST 2022 ASX | VVA
Slide 2: Contents Page
CONTENTS PAGE FY2022 HIGHLIGHTS 3 FINANCIAL RESULTS 7 COVID IMPACTS 18 FY2023 OUTLOOK 21 BRANDS & SEGMENT UPDATE 28 APPENDIX 35 2
Slide 3: Highlights
_ wy HIGHLIGHTS FY2022 FULL YEAR RESULTS PRESENTATION
Slide 4: H2-FY2022 Guidance Milestones Met
H2-FY2022 GUIDANCE MILESTONES MET FY2022 HIGHLIGHTS FINANCIAL HIGHLIGHTS ▪ H2 FY2022 revenue $56.8m Revenue EBITDA* Margin above guidance range reflects H2-FY2022 H2-FY2022 successful execution of $56.8m 16.4% acquisition growth plans Guidance $54-56m Guidance: 15-17% ▪ As COVID restrictions lifted
Slide 5: Operational Progress Positions Viva For Growth
OPERATIONAL PROGRESS POSITIONS VIVA FOR GROWTH FY2022 HIGHLIGHTS FINANCIAL OPERATIONAL Revenue EBITDA* Members Members (ex AASB-16) (Owned Locations) (All Locations) $90.8m $5.5m 159,546 320,161 Up 8.5% [FY21: $83.7m] Down 53.8% [FY21: $12.0m] [FY21: 126,006] [FY21: 298,376] NPAT* Statutory NPAT Uti
Slide 6: Performance Highlights
PERFORMANCE HIGHLIGHTS FY2022 HIGHLIGHTS Annual# Monthly# Daily# Revenue Run Rate Revenue Run Rate Revenue Run Rate $124.5m $10.2m $341,138 Direct Revenue, excl System-wide Sales Direct Revenue, excl System-wide Sales Direct Revenue, excl System-wide Sales Average Revenue# LFL Membership+ System-wid
Slide 7: Financial Results
ANCIAL RESULTS ” FY2022 FULL YEAR RESULTS PRESENTATION
Slide 8: FY2022 Results Reflect Impact of COVID During H1-FY2022
FY2022 RESULTS REFLECT IMPACT OF COVID DURING H1-FY2022 PROFIT & LOSS H1 FY 2022 H2 FY 2022 FY 2022 FY 2021 Variance HIGHLIGHTS (ex AASB16) (ex AASB16) (ex AASB16) (ex AASB16) ▪ Club closures in H1 led to a significant reduction in Revenue 34.0 56.8 90.8 83.7 8.5% revenue and EBITDA Operating Costs
Slide 9: Revenue Exceeds Pre-COVID Levels
REVENUE REVENUE EXCEEDS PRE-COVID LEVELS Monthly Revenue Run Rate ($m) Annualised Revenue Run Rate ($m) 11 18% 130 +52% HIGHLIGHTS 10 120 110 June 2022: 9 100 ▪ Revenue slightly 8 lower in June over 90 7 May due to one less 80 day in the month 6 70 ▪ Viva calculates 5 60 monthly revenue on 4 50 a da
Slide 10: Revenue Growth ($M)
REVENUE GROWTH ($M) MONTHLY REVENUE GROWTH [DEC 2021 V JUN 2022] 10.25 0.08 0.72 LEGEND ▪ Pre FY2022 Clubs refers to locations which were operating prior to the FY2022 period commencing 0.26 +22% ▪ FY2022 Opening Clubs refers to locations opened during the financial year ▪ FY2022 Acquisitions refers
Slide 11: Average Revenue Per Member Per Week ($)
AVERAGE REVENUE PER MEMBER PER WEEK ($) CONTINUES TO INCREASE EACH MONTH +8% 15 14.64 14.59 HIGHLIGHTS 14.28 13.95 14.01 14 13.49 13.42 ▪ 8% increase in average weekly rate 12.82 since re-opening in November 2021 13 post latest COVID lockdowns 12 11.78 ▪ Higher yielding membership 11 options (Hiit R
Slide 12: Member Base Continues To Grow
MEMBER BASE CONTINUES TO GROW EXPANSION INTO WESTERN AUSTRALIA & 4% MEMBERS LOWER RELIANCE ON ACT MEMBERSHIP BY STATE 17% +7% 34% ACT 320,161 NSW 298,376 297,211 11% VIC 275,272 QLD WA 34% MEMBERS 94,196 BY SEGMENT 54,039 35,631 Viva Owned 29,124 50% 50% Plus Fitness (AU/NZ) FY2017 FY2018 FY2019 FY2
Slide 13: Member Growth
MEMBER GROWTH CONTINUED MEMBER GROWTH IN CORPORATE OWNED LOCATIONS 159,546 LEGEND 23,158 ▪ Pre FY2022 Clubs refers to locations which were operating prior to the FY2022 period commencing ▪ FY2022 Opening Clubs refers to locations opened during the financial year ▪ FY2022 Acquisitions refers to 4,950
Slide 14: Utilisation
UTILISATION RECORD UTILISATION ACROSS OWNED PORTFOLIO 75% 74% HIGHLIGHTS 73% 72% ▪ June 2022 achieved record portfolio utilisation approaching 70% 71% 70% ▪ Utilisation refers to Viva estimated maximum capacity per 69.3% location: 69% ▪ Health Clubs estimate 2.0 members per square metre 68.0% ▪ Hiit
Slide 15: Balance Sheet
BALANCE SHEET CONTINUED INVESTMENT IN GROWTH ASPIRATION DESPITE H1-FY2022 COVID IMPACTS ($m) FY 2022 FY 2021 Cash 10.1 17.3 HIGHLIGHTS Receivables and other Current Assets 4.3 4.6 ▪ Large investment in P, P & E 52.0 51.7 acquisitions with 25 new Right of Use Assets 224.4 204.9 clubs acquired Intangi
Slide 16: Cash Flows
CASH FLOWS PRUDENT CASH MANAGEMENT HAS BEEN A PRIORITY OVER THE YEAR HIGHLIGHTS ($m) H1 FY2022 H2 FY2022 FY2022 FY2021 Opening cash 17.3 16.4 17.3 30.1 ▪ ~$20m invested in 25 acquired clubs Cashflows from Operations 2.6 25.2 27.9 25.4 ▪ $12.3m invested in PPE, the Investment in P,P,E and Intangibles
Slide 17: Inflation Impacts
INFLATION IMPACTS STRONG FY2023 BUDGET TO ASSIST WITH INFLATION IMPACT INCOME Comments: ▪ Despite inflationary pressures, Viva has planned accordingly with total Member Fee Increases Increases increase in cost base of 6.5% (like for like) for FY2023 April 2022 4.5% ▪ Revenue increases via member fee
Slide 18: Covid Impacts
FY2022 FULL YEAR RESULTS PRESENTATION
Slide 19: Covid Restrictions Created Significant Impact In H1-FY2022
COVID RESTRICTIONS CREATED SIGNIFICANT IMPACT IN H1-FY2022 REVENUE LOSS ESTIMATE IN H1-FY2022 ~$17M Closed 52% Jul to Oct 2021 HIGHLIGHTS ▪ Locations were on average closed 52% of the first four 100% 100% 100% months of the half year 72% 62% ▪ Locations were closed 35% 35% of the entire H1-FY2022 21
Slide 20: Covid Recovery
COVID RECOVERY LFL MEMBERSHIPS AND REVENUE 99,355 6,284 99,500 6,300 HIGHLIGHTS 99,000 6,200 ▪ Like for Like (LFL) 98,500 6,100 Membership and 98,000 Revenue up from +3.1% +8.3% pre-COVID 97,500 6,000 numbers 97,000 5,900 96,403 5,803 ▪ Across entire Viva 96,500 5,800 owned portfolio – 96,000 exclud
Slide 21: FY2023 Outlook
FY2022 FULL YEAR RESULTS PRESENTATION
Slide 22: Strong Pipeline Underpins Ongoing Growth In Locations
STRONG PIPELINE UNDERPINS ONGOING GROWTH IN LOCATIONS BOUTIQUE BRANDS TO FOCUS IN FY2023 152 Operating Locations 12 New Greenfield locations secured 12 Under negotiation for lease or to acquire All our brands continue to expand Focus of growth is with Viva Leisure’s Acquisition opportunities include
Slide 23: Chain Collective Group
CHAIN COLLECTIVE GROUP OUR FRANCHISING DIVISION Plus Fitness ▪ Roll-out of new design going well, handful of new clubs already operating under new corporate branding, and various existing clubs have refit to the new design already ▪ Currently ~20 new territories looking for locations to open ▪ Franc
Slide 24: Banking Facilities
BANKING FACILITIES INCREASED BANKING FACILITIES TO FUEL GROWTH Viva Leisure has agreed to the following increased banking facilities with the Commonwealth Bank of Australia: HIGHLIGHTS Available as at ▪ At an average 3.0x historical Facility Previous Limit New Limit 30/6/2022 normalised EBITDA, the
Slide 25: Scrip Acquisition Option
SCRIP ACQUISITION OPTION USING VVA SCRIP TO COMPLETE ACQUISITIONS The Viva Leisure Board has agreed to consider various future acquisitions to use VVA scrip and bank debt in place of cash and bank debt HIGHLIGHTS Management has agreed to terms with six individual Vendors for the following ▪ EBITDA M
Slide 26: Technology Upgrade
TECHNOLOGY UPGRADE THE HUB AND VIVA PAY Largest investment in IT upgrade now underway: ▪ New Project known as “the Hub”, currently operating with “the Portal” ▪ Expect to invest over $1m in development costs in FY2023 for the Viva Labs team ▪ Upgrading of existing systems to latest technology platfo
Slide 27: Innovative Micro-Gym Concept
INNOVATIVE MICRO-GYM CONCEPT NO STAFF, SMALL FOOTPRINT CONCEPT Micro-Gym Concept Explained: ▪ 150-200m2 target size HIGHLIGHTS ▪ 500-600 members ▪ No staff required within club ▪ Target price <$10 per week (Low Cost, Low Service) ▪ 1x area manager per 10 locations ▪ Low entry cost (Target: <$100k fi
Slide 28: Brands & Segment Update
BRANDS & SEGMENT UPDATE
Slide 29: Viva's Expanding Portfolio
VIVA’S EXPANDING PORTFOLIO TARGETING ALL SEGMENTS Rebalance Pilates Club Lime Club Lime Hiit Republic Plus Fitness GroundUp Psycle Life & Yoga Aquatics Segment Health Clubs Boutique Health Clubs Boutique Boutique Boutique Aquatics High quality High quality High quality Medium quality facilities, mid
Slide 30: Club Lime
CLUB LIME HEALTH CLUBS FY2023 GOALS ▪ With 94 Club Lime health clubs in Australia, it is the second largest non-franchised health club brand in the country ▪ Achieve >100 locations ▪ The largest non-franchised health club brand in Australia operates ▪ Upgrade ~10 locations to 97 locations new look a
Slide 31: GroundUp
GROUNDUP BOUTIQUE: PILATES, YOGA & BARRE FY2023 GOALS Our latest boutique offering ▪ Open third studio (currently under build in the ACT) ▪ Yoga, Pilates and Barre – 3 studios, 1 location, 1 membership ▪ Clean, white, natural fit-out ▪ Achieve 1,000 direct debit members across the first three studio
Slide 32: Rebalance Pilates & Yoga
REBALANCE PILATES & YOGA BOUTIQUE: PILATES & YOGA Our new franchised boutique offering FY2023 GOALS ▪ Yoga and Pilates ▪ Open first ACT location (opening end August 2022) ▪ Simple affordable fit-out suitable for franchising ▪ Finalise franchising setup and systems ▪ 8 corporate locations acquired in
Slide 33: Hiit Republic
HIIT REPUBLIC BOUTIQUE: FUNCTIONAL FITNESS Functional Training brand: ▪ Functional class based training FY2023 GOALS ▪ Achieve >30 operating ▪ 25 locations open (ACT, NSW, VIC and QLD) locations by EOFY ▪ 2 additional locations secured ▪ Finalise franchising setup and systems ▪ Multiple Unique Selli
Slide 34: Plus Fitness
PLUS FITNESS LOW COST, LOW SERVICE HEALTH CLUB FRANCHISE OFFERING Update: FY2023 GOALS ▪ Completed re-mapping of Australian territories and have commenced process of offering new territories for sale ▪ Achieve >20% of network operating with new design ▪ Back-office app and access control systems ful
Slide 35: Appendix
’ FY2022 FULL YEAR RESULTS PRESENTATION.
Slide 36: Financial Snapshot
FINANCIAL SNAPSHOT RECORD REVENUE AND HALF -YEAR EBITDA ACHIEVED REVENUE ($M) EBITDA ($M) 90.8 83.7 11.9 56.8 5.5 47.8 6.3 7.3 40.9 6.1 33.1 5.2 17.9 9.3 24.1 20.7 3.3 35.9 34.0 5.6 23.0 FY2017 FY2018 FY2019 FY2020 FY2021 FY2022 -3.8 FY2017 FY2018 FY2019 FY2020 FY2021 FY2022 Full Year H1 H2 Full Yea
Slide 37: Performance Highlights
PERFORMANCE HIGHLIGHTS H2-FY2022 CHARTS Annualised Revenue Run Rate Average Revenue Per Members (‘000) Locations ($m) Member per week+ 125 330 313 313 317 320 350 330 330 333 333 334 14.8 125.0 310 326 14.64 123 299 9 9 13 14 17 14.59 122.5 300 8 14.6 300 120.0 270 14.4 14.28 117.5 116 14.2 240 166
Slide 38: Member Visits ('000)
MEMBER VISITS (‘000) VISITATIONS CONTINUE TO INCREASE DESPITE COVID-19 INFECTIONS STILL IN THE COMMUNITY 1,800 HIGHLIGHTS 1,600 Based on days per month ▪ 1.7 million visits to facilities in June 2022 (30 days), was 1.5 million visits in April 2022 1,400 ▪ December 2021 visitations lower due to seaso
Slide 39: Statutory Reconciliation & Normalisations
STATUTORY RECONCILIATION & NORMALISATIONS UNDERLYING & AASB16 FOR FY2022 FY2022 AASB16 FY2022 ($m) COMMENTS Statutory Impact (pre AASB16) ▪ Rent expense excludes deferred rent Revenue 90.8 0.0 90.8 of prior periods Expenses (54.4) (30.9) (85.3) ▪ Removal of amortisation of Right of Use Asset EBITDA
Slide 40: Important Notice And Disclaimer
IMPORTANT NOTICE AND DISCLAIMER Important information Future performance The information in this presentation is general in nature and does not purport to be complete. It has This presentation may contain certain ‘forward-looking statements’. Forward-looking statements include been prepared by Viva