Leejam Sports Co. · TADAWUL:1830
Leejam Sports — H1 2019 Earnings Presentation
41 slides from Leejam Sports's earnings presentation, 2019
Slide 1: Leejam Sports Company Investor Presentation H1 2019
Leejam Sports Company Investor Presentation H1 2019
Slide 2: Table of Contents
Table of Contents Page 1. Company Profile 3 2. Board Members 20 3. Financial Performance 22 4. Outlook FY 2019 38 5. Q&A 41 CONFIDENTIAL 2
Slide 3: 1. Company Profile
1. Company Profile CONFIDENTIAL 3
Slide 4: Largest Fitness center operator in the MENA Region
Largest Fitness center operator in the MENA Region An indigenous and localized Proud Saudi Brand 134 incl. 30 female 244k Operational Fitness Centers Active Members (30 June 2019) (30 June 2019) Added 10 centers in H1 2019 Added 27k members (net) in H1 2019 18% 9th Female members of total member bas
Slide 5: Other Key Metrics
Other Key Metrics 436M SAR 365M SAR 89M SAR 72M SAR Revenues Revenues Net Income Net Income (H1 2019) (H1 2018) (H1 2019) (H1 2018) 20% growth 23% growth 213M SAR 136M SAR 49.5M SAR 39.7M SAR EBITDA EBITDA Net Income Net Income (H1 2019) (H1 2018) (Q2 2019) (Q1 2019) 56% growth on reported basis QoQ
Slide 6: Participated in Fitness Events in H1 2019
Participated in 10 Fitness Events in H1 2019 Basketball Championship Extreme FT Championship Strongest Man Championship Football Championship MOH event CONFIDENTIAL 6
Slide 7: Participated in Fitness Events in H1 2019
Participated in 10 Fitness Events in H1 2019 Partnership with Amir Khan Swimming Championship Squash Championship Tahadi event Walking is healthy event Swimming for children CONFIDENTIAL 7
Slide 8: Macro KSA Environment
Macro KSA Environment Government initiatives aim at supporting the health and fitness sector Indicator Male Female Total Prevalence of obesity 31% 42% 34% As part of the Vision 2030, the Saudi Government Prevalence of diabetes 17% 21% 19% plans to promote a healthier lifestyle among its citizens wit
Slide 9: Diverse Brand Portfolio to Serve the Market
Diverse Brand Portfolio to Serve the Market Male Brands Female Brands Other Brands EXPRESS CONFIDENTIAL 9
Slide 10: Key Milestones
Key Milestones - Start Planning - First “Fitness - Introduction of - The Company - Investcorp - Intro of PT - Launch of Phase Time” Fitness Time opens its 50th acquires 25.1% - UAE launch female fitness - First “Fitness standalone Pro category fitness center stake in Leejam - Exclusive centers Time”
Slide 11: Leejam 3.0 6 Key Pillars
Leejam 3.0 Goal: To be Top 10 Fitness Company in the World and be Employer of Choice in KSA 6 Key Pillars to Enhance achieve Leejam 3.0 Customer Open Door Experience in the next 3 years Policy Invest In Improved Our People Corporate Governance Grow & Leverage Exceed Technology Shareholders Expectati
Slide 12: Market Leader with Strong Scale Advantage
Market Leader with Strong Scale Advantage Strong geographical footprint with presence in 29 cities Fitness Centres Evolution Geographic Footprint (as of 30 June 2019) Arar (1) (130) ● ● Sakakah Hafr (1) Al Batin (4) ● Tabuk ● (1) (3) Ha’il ● (1) ● Buraydah ● Jubail Yanbu Saihat ● (4) (2) Madinah ● U
Slide 13: Segmented Concept, Recognised Brand (1/3)
Segmented Concept, Recognised Brand (1/3) Key Features Males Males Males Male Females Females Females Targeted at (age) 25yrs+ 16yrs+ 16yrs+ Junior 25yrs+ 16yrs+ 16yrs+ # of Fitness Centres1 – KSA 3 50 41 4 - 24 5 # of Fitness Centres1 – UAE - 1 2 0 - - 1 12-month Price (SAR)2 8,925* 4,988* 3,255* 3
Slide 14: Segmented Concept, Recognised Brand (2/3)
Segmented Concept, Recognised Brand (2/3) State-of–art Spacious Facilities with a Customized Service Offering Available in each center to Competitions and tournaments assist with equipment use, organised on a regular basis Floor fitness regime etc. Special for members Trainers Events >1100 Flo
Slide 15: Segmented Concept, Recognised Brand (3/3)
Segmented Concept, Recognised Brand (3/3) Corporate Business The Company delivers services to corporate partners under the Fitness Time Wellness umbrella Fitness Time is an attractive partner for large corporate clients given its country wide footprint in 29 cities in KSA & UAE Opportunity to
Slide 16: Performance since IPO (Sept 2018)
Performance since IPO (Sept 2018) Net Income ACCOLADES: (SAR million) Consecutive growth in results post IPO LY on Sept 10, 2018. Leejam 3.0 in place with 6 key pillars. Opening of 23 centers over last 10 month (17% of our entire portfolio since 2005). New initiatives include launch of GEMs
Slide 17: Other Significant Accolades
Other Significant Accolades Cover page story by CBI “IHRSA” magazine on LEEJAM 3.0 in April 2019 issuance & Article coverage in CEO magazine by Khaleej Times CONFIDENTIAL 17
Slide 18: Other Significant Accolades (contd.)
Other Significant Accolades (contd.) PNU the largest Fitness center in the world – operated by Fitness Time CONFIDENTIAL 18
Slide 19: Other Significant Accolades (contd.)
Other Significant Accolades (contd.) Shaikh Mohammad Bin Rashid Award – in 2015 CONFIDENTIAL 19
Slide 20: 2. Board Members
2. Board Members CONFIDENTIAL 20
Slide 21: Board Members
Board Members Ali Al-Sagri Hamad Al-Sagri Dr. Mohammed Al-Kinani Chairman Board Member (Executive ) Board Member (independent) Hisham Al-Khaldi Vice Chairman & MD Board Member (independent) Tareq Al-Angari Abdulelah Al-Nemr Hessah Al-Sagri Board Member (independent) Board Member (independent) Board
Slide 22: 3. Financial Performance
3. Financial Performance CONFIDENTIAL 22
Slide 23: H1 Revenue and Net Income
H1 Revenue and Net Income Revenue Key Messages: (SAR million) H1 CY Revenue was 20% higher vs. LY, mainly due to: # of Fitness Centres 115 134 - new Male Centres 2 6 10 new centers openings in CY, - new & Converted Female Centres 6 4 ramping-up of 22 non-LFL centers opened LY, In MSR LFL gro
Slide 24: QoQ Growth (Q2 vs. Q1)
QoQ Growth (Q2 vs. Q1) Revenue (SAR million) Key Messages: # of Fitness Centres 119 134 115 134 QoQ growth continues with 17% revenue growth vs Q2 - new Male Centres 2 5 0 1 LY( LFL growth and ramping up of centers) - new & Converted Female Centres 1 3 5 1 Q2 revenue increased by net SR 1.7M com
Slide 25: Revenue Break-Down
Revenue Break-Down Revenue by Type Center Revenue by Brand (%, H1 2019) (%, H1 2019) No. of centers by category H1 2019 2018 2017 2016 FT Men 53 49 50 48 PRO Men 43 41 42 40 Plus Men 3 4 4 3 Junior 4 4 8 9 Basic 0 0 0 1 Kidizenia 1 2 0 1 FT Female 24 20 4 0 PRO Female 6 6 4 0 Source: Company Total 1
Slide 26: H1 2019 vs. H1 2018 Revenue Bridge
H1 2019 vs. H1 2018 Revenue Bridge `In SR 000 3% Key Messages: Increase in LFL revenue mainly driven by higher LFL subs. income by 12% vs. H1 LY. Non- LFL includes 22 centers opened during 2018. Increase in PT revenue mainly due to roll-out of additional PT centers (CY: 92 vs. LY: 70) and impr
Slide 27: H1 2019 P&L
H1 2019 P&L `In MSR Key Messages: H1 LY H1 CY ∆% H1 Net income was higher by 23% vs. LY due to increase in number of Centers # (EOP) 115 134 17% operating centers, resulting in 20% growth of revenue. Average # Of Centers 118 132 11% Increase in revenue was mainly due to; Revenues 364.5 436.3 20%
Slide 28: Q2 vs Q1 2019 P&L
Q2 vs Q1 2019 P&L `In MSR Key Messages: Q1 CY Q2 CY ∆% Q2 witnessed 15% EBIDTA and 25% Net income growth vs Q1 CY. Centers # (EOP) 134 134 0% Average # Of Centers 131 132 1% Q2 CY Net income was higher by SR 10M driven by revenue growth of 1% net, lower cost of revenue mainly attributable to cos
Slide 29: H1 2019 vs. H1 2018 Net Income Bridge
H1 2019 vs. H1 2018 Net Income Bridge `In SR 000 Key Messages: GP of male centers improved mainly due to LFL growth of 12% vs. H1 LY. Female centers continue to contribute significantly towards the overall company profitability. However in CY, ramp up period extended to ave. 6 months & subs. inc
Slide 30: Financial Impact of Centers opened in Q4 2018 & H1 2019
Financial Impact of Centers opened in Q4 2018 & H1 2019 `In SR 000 No. of Centres 11 10 Ave. No. of Centres 11 6.7 GP Margin % 27% (30%) Q4 LY Openings H1 CY Openings Q4 LY Openings H1 CY Openings H1 Final Impact (Ave. Per center) (Total Net profit) Key Messages: 11 centers opened during Q4 LY of
Slide 31: COGS & SG&A
COGS & SG&A COGS (SAR million) Key Messages: 5% increase in average COGS / center is mainly due to higher operational cost of female centers (15-20% higher female salaries vs. male counterpart), depreciation under IFRS 16, consumables, repairs, rising government levies and cost of outsourced clean
Slide 32: Balance Sheet
Balance Sheet Total Assets (SAR million) Key Messages: Increase in total assets by 53% is due to transition to IFRS 16, where the Company recognized right- of-use assets of SR 863.6M and corresponding lease liability of SR 966M (net). Adjustment to opening retained earnings was SR 94M under modi
Slide 33: Key Ratios
Key Ratios Key Ratios Q3 2018 Q4 2018 Q1 2019 Q2 2019 Key Messages: ROE 25% 25% 30% 30% Growth in ROE from Q1 2019 was mainly due to adjustment of retained earnings / equity by SR 94.5M ROI 15% 15% 10% 10% upon application of IFRS 16 under modified retrospective ROA 11% 11% 8% 8% approach. ROCE 17
Slide 34: Loans & Finance Charges
Loans & Finance Charges Loans and Finance Charges (SAR million) IFRS 16 SR 16.3M Key Messages: YOY Increase in loans to support center expansion, offset by payments made. Approximate 50-60% split by managing the portfolio between floating & fixed rated borrowings. Weighted average cost of borr
Slide 35: Cash Generation & Returns
Cash Generation & Returns Cash Flow From Operations (SAR million) Cash flow / EBITDA 66% 35% 102% Dividend Declared and Pay-out (SAR million) Dividend Ratio 60% 60% 60% . • Company continues to pay 60% dividend of distributable income (54% of net income). • Board meeting scheduled end of the month f
Slide 36: H1 2019 Male & Female Segments
H1 2019 Male & Female Segments Female Centers continue to make Material Contribution in H1 2019 Female Centers Openings H1CY Female centers Ramp-up Evolution Revenue and Gross Profit per centre (SAR million) Gross Margin 49% 37% 26% 40% CONFIDENTIAL 36
Slide 37: Male vs. Female Centers Performance
Male vs. Female Centers Performance Based on last 6 months performance Revenue and Gross Profit per centre (SAR million) Gross Margin, average 40% - 55% 30% - 35% CONFIDENTIAL 37
Slide 38: 4. Outlook FY 2019
4. Outlook FY 2019 CONFIDENTIAL 38
Slide 39: Outlook FY 2019
Outlook FY 2019 Tentative Guidance: Leejam 3.0 in full swing. No. of centres Growth H1 revenue & net income witnessed 20% & 23% growth vs. LY, despite ramping- up of 21 centers opened in last 9 months. The momentum is expected to continue during 2019, with revenue growth of 12-15% driven by: f
Slide 40: Disclaimer
DISCLAIMER Leejam Sports Company makes no representation or warranty of any kind, express, implied or statutory regarding this document or the materials and information contained or referred to on each page associated with this document. The material and information contained on this document is pro
Slide 41: Q&A
CONFIDENTIAL 41
Leejam Sports Company — H1 2019 Earnings Presentation on 6ix