Viva Leisure Ltd. · ASX:VVA
Viva Leisure — Merger or Acquisition (December 2019)
39 slides from Viva Leisure's merger presentation, Dec 2, 2019
Slide 1: Acquisition of FitnFast, Trading Update & Capital Raising
For personal use only A C Q U I S I T I O N O F F I Tn FA S T, T R A D I N G U P D AT E & C A P I TA L R A I S I N G 1 2 December 2019
Slide 2: Important Notice and Disclaimer
Important Notice and Disclaimer Important Notice and Disclaimer No investment or financial product advice For personal use only This presentation has been prepared by Viva Leisure Limited ("Viva Leisure") in relation to the acquisition by Viva The information contained in this presentation does not
Slide 3: Important Notice and Disclaimer (continued)
Important Notice and Disclaimer (continued) For personal use only Financial data Effect of Rounding All dollar values are in Australian dollars ($ or AUD) unless stated otherwise. All references starting with “FY” refer to A number of figures, amounts, percentages, estimates, calculations of value a
Slide 4: Agenda
Agenda 1. Executive Summary For personal use only 2. Transaction Overview 3. Strategic Rationale 4. Financial Metrics 5. Trading Update 6. Equity Raising Overview & Timetable 7. Business Overview 8. Foreign Selling Restrictions 9. Key Risks 4 Acquisition, Trading Update & Capital Raising NOT FOR DIS
Slide 5: Executive Summary
5 For personal use only EXECUTIVE SUMMARY
Slide 6: Executive Summary
Executive Summary ▪ Viva Leisure has agreed to acquire 13 FitnFast Health Clubs (“FnF”) located in the ACT (1), New For personal use only South Wales (10) and Victoria (2) Acquisition Overview ▪ In FY19 FnF (13 clubs) produced revenue of $17.9 million and EBITDA1 of $3.6 million ▪ Viva Leisure to pa
Slide 7: Executive Summary
Executive Summary For personal use only ▪ Well located club portfolio, conducive to Viva Leisure’s hub and spoke model ▪ Fits Viva Leisure’s stated strategy to expand Strategic rationale ▪ Highly complementary fit in terms of geography and customer demographic ▪ Opportunity to realise further revenu
Slide 8: Transaction Overview
For personal use only TRANSACTION OVERVIEW 8
Slide 9: Overview of FnF
Overview of FnF1 For personal use only ~200 Employees 13 acquired locations Established in 2010 by Tony de Leede 60% Casual ACT (1), NSW (10), VIC (2) Original Fitness First Australia Managing Director VIC ACT 13% 7% NSW 80% ~21,500 Members Members by Average revenue Location $14.80/pw per member No
Slide 10: Overview of FnF – NSW Locations
Overview of FnF – NSW Locations Comments For personal use only Sydney ▪ No overlap of locations ▪ New geographic areas reached ▪ Opportunities for hub and spoke to occur in multiple locations Wollongong ▪ Overlap in location at Shellharbour ▪ FnF location likely to be re-branded to something other t
Slide 11: Overview of FnF – ACT and Victoria Locations
Overview of FnF – ACT and Victoria Locations Comments For personal use only Melbourne ▪ New geographic areas reached ▪ Opportunities for hub and spoke to occur in multiple locations ▪ Forrest Hill will complement new Nunawading location currently under development ▪ Opportunity for hub and spoke on
Slide 12: Head Office Additional Executive Support
Head Office Additional Executive Support Harry Konstantinou For personal use only (CEO) Kym Gallagher Sean Hodges Angelo (CFO) (COO) Konstantinou (CTO) Comments Accounts Assistant Human Resources IT Admin & Support Head Office Executive Support (+3) Increased in FY20 to support the Marketing (+3) co
Slide 13: Strategic Rationale
For personal use only STRATEGIC RATIONALE FINANCIAL RESULTS 1
Slide 14: Strategic Rationale
Strategic Rationale ▪ Fits Viva Leisure’s stated strategy of expansion For personal use only Acquisition supports ▪ Strengthens Viva Leisure’s reach into new territories via established locations with loyal plan to grow membership base ▪ Significant opportunity to implement Viva Leisure’s hub and sp
Slide 15: Strategic Rationale (continued)
Strategic Rationale (continued) For personal use only Combined Group Health Clubs, Boutique Functional Health Clubs, Functional Fitness Product Offering Fitness, Boutique Cycling Studios, (within Club), Aquatic Facilities, Swim School Yoga and Barre facilities (within Club) Boutique, Express, Standa
Slide 16: Forecast FY20 Members by State
Forecast FY20 Members by State For personal use only FnF Acquisition VIC ACT 12% 9% Actual as at October 2019 Estimate as at June 2020 (pre-acquisitions) NSW 79% NSW VIC QLD 22% 3% 12% VIC 8% ACT 46% Healthworks Acquisition NSW ACT 34% 75% QLD 100% 16 Acquisition, Trading Update & Capital Raising NO
Slide 17: Financial Metrics
1 For personal use only FINANCIAL METRICS
Slide 18: Financial Metrics
Financial Metrics For personal use only Viva Leisure Synergy Notes FnF FnF pro forma FnF est. (FY20) ($ millions) Synergies (FY19) (FY19) Contribution1 (FY19) Revenue ▪ $750k equates to 975 new Income 17.9 0.8 18.6 4.5 members or 4.5% growth in member base Operating Costs2 14.3 (0.4) 13.9 3.6 Operat
Slide 19: Trading Update
1 For personal use only TRADING UPDATE
Slide 20: Geographical Coverage opened and secured locations
Geographical Coverage opened and secured locations For personal use only Health Clubs Boutiques 70 15 As at 30 November 2019, includes open locations, secured locations not yet open, Healthworks and FnF locations First hiit republic location opened in March 2019 20 Acquisition, Trading Update & Capi
Slide 21: Forecast FY20 Members Guidance
Forecast FY20 Members Guidance For personal use only 21 Acquisition, Trading Update & Capital Raising NOT FOR DISTRIBUTION OR RELEASE IN THE UNITED STATES
Slide 22: Forecast FY20 Clubs
Forecast FY20 Clubs For personal use only 22 Acquisition, Trading Update & Capital Raising NOT FOR DISTRIBUTION OR RELEASE IN THE UNITED STATES
Slide 23: Forecast FY20 Revenue Guidance
Forecast FY20 Revenue Guidance For personal use only ~85.0 June 2020 Run Rate Revenue 23 Acquisition, Trading Update & Capital Raising NOT FOR DISTRIBUTION OR RELEASE IN THE UNITED STATES
Slide 24: Forecast FY20 EBITDA Guidance
Forecast FY20 EBITDA Guidance For personal use only ~21.0 June 2020 Run Rate EBITDA Note 1: EBITDA excludes impacts of AASB16 24 Acquisition, Trading Update & Capital Raising NOT FOR DISTRIBUTION OR RELEASE IN THE UNITED STATES
Slide 25: Equity Raising Overview & Timetable
For personal use only EQUITY RAISING OVERVIEW & TIMETABLE 2
Slide 26: Equity Raising Overview
Equity Raising Overview For personal use only ▪ Fully underwritten institutional placement (“Equity Raising” or “Placement”) to professional and sophisticated investors to raise $20.0 million (the “Offer”) Offer Structure ▪ Major shareholder, SHJA Management Pty Ltd (entities associated with Harry K
Slide 27: Sources and Uses of Funds
Sources and Uses of Funds For personal use only Sources Sources and Uses of Funds ($ millions) • Capital raise of $20.0 million via underwritten institutional placement Sources of Funds • Debt funding through CBA Senior Facility to assist with purchase (up to 50% LVR) Capital raising 20.0 Source and
Slide 28: Equity Raising Timetable
Equity Raising Timetable For personal use only Event Date¹ Trading Halt Monday, 2 December 2019 Announcement of Completion of Equity Raising Pre Market Open, Tuesday, 3 December 2019 Trading Halt Lifted, Trading Recommences Pre Market Open, Tuesday, 3 December 2019 Settlement of New Shares Issued Un
Slide 29: Business Overview
2 For personal use only BUSINESS OVERVIEW
Slide 30: The Viva Business
The Viva Business health is the new wealth Our Brands For personal use only ▪ Viva Leisure Limited (“Viva Leisure”) operates in the health and leisure industry in Australia, originally commencing operations in January 2004 with one facility and now operating 55 different business sites, the majority
Slide 31: Scalable Business Model
Scalable Business Model fitness is an essential part of life Viva Leisure’s hub and spoke model New concepts, new USP’s For personal use only ▪ Viva Leisure operates what it calls a ‘hub and spoke’ model with larger (big box) health clubs being supported by smaller (standard, express As Viva Leisure
Slide 32: Investment Highlights
Investment Highlights not all health clubs are built the same Growth opportunity Attractive member High quality facilities Technology focused Strong cash flow from For personal use only proposition operator model ▪ Highly fragmented market with ▪ High levels of member ▪ Data driven site selection ▪
Slide 33: Introducing FaaS
Introducing FaaS our data is what makes us different The Viva Fitness as a Service (FaaS) model For personal use only Viva Leisure’s Model Traditional Model Pricing ▪ Affordable, no contract, no joining fee ▪ Expensive locked-in pricing model with joining fees ▪ Paper based, completed in person, som
Slide 34: What's coming up
What’s coming up opportunities to continue delivering profitable growth For personal use only New Locations New Revenue Growing our portfolio of locations Generating more from our extensive organically and by acquisition and loyal membership base growing pipeline Digital Membership Offering Leveragi
Slide 35: Foreign Selling Restrictions
For personal use only FOREIGN SELLING RESTRICTIONS 3
Slide 36: Foreign Selling Restrictions
Foreign Selling Restrictions This document does not constitute an offer of new ordinary shares (“New Shares”) of the Company in any jurisdiction in which it Singapore would be unlawful. In particular, this document may not be distributed to any person, and the New Shares may not be offered or This d
Slide 37: Key Risks
3 For personal use only KEY RISKS
Slide 38: Key Risks
Key Risks This section outlines some of the key risks associated with an investment in Viva Leisure shares, together with risks relating Acquisition accounting specifically to the acquisition and participation in the Institutional Placement. This is not an exhaustive list of the relevant In accounti
Slide 39: Key Risks (continued)
Key Risks (continued) Reputational damages General risks Viva Leisure's reputation could be adversely impacted if it suffers from any adverse publicity. Examples of adverse publicity For personal use only include health and safety issues or incidents affecting members, poor maintenance of equipment,