Viva Leisure Ltd. · ASX:VVA
Viva Leisure — FY2020 Earnings Presentation
42 slides from Viva Leisure's earnings presentation, Aug 26, 2020
Slide 1: FY2020 Full Year Results Presentation
FY2020 FULL YEAR RESULTS PRESENTATION 26 AUGUST 2020 Viva Leisure Limited 1 FY2019 Results Presentation A S X : V VA
Slide 2: 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 been prepared by This presentation may contain certain ‘forward-looking statements’. Forward-looking statements include those
Slide 3: Presenting Today
Presenting Today Harry Konstantinou Managing Director & Chief Executive Officer Kym Gallagher Chief Financial Officer 3 FY2020 FULL YEAR RESULTS PRESENTATION
Slide 4: Contents
Contents 6. COVID-19 9. Performance Highlights 12. Financial Results 21. Outlook 29. Appendix 31. AASB 16: Leases Reconciliation 36. The Viva difference
Slide 5: Word from our CEO
Word from our CEO “ COVID-19 has affected the health club industry significantly after mandatory shutdown of facilities occurred on 23 March 2020, effectively reducing Viva Leisure’s income to zero. Since then, my Team and I have worked diligently to return the business to pre-COVID levels. The FY20
Slide 6: COVID-19
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Slide 7: COVID-19 Timeline
COVID-19 Timeline 23 March 2020 25 May 2020 12 June 2020 9 July 2020 Commonwealth As clarity on re-opening QLD locations re-open VIC metro locations Government started to come through, with restrictions close mandatory closure of accelerated all facilities refurbishments of closed locations and 13 J
Slide 8: COVID-19 Impacts
COVID-19 Impacts Revenue by Month ($m) Visits Average Member Visits (‘000) Visits Unique Members 6.0 600 80 Thousands Thousands 5.0 70 500 4.0 60 400 50 3.0 300 40 2.0 30 200 1.0 20 100 .0 10 0 0 Jan-20 Feb-20 Mar-20 Apr-20 May-20 Jun-20 Jul-20 Aug-20 ▪ Mandatory Shutdown for COVID-19 occurred 23 Ma
Slide 9: Performance Highlights
Performance Highlights 9 FY2019 Results Presentation
Slide 10: Performance Highlights
Performance Highlights REVENUE EBITDA* NPAT* EBITDA MARGIN* $40.9m $6.07m $1.43m 14.8% PCP 23.6% PCP (16.7%) PCP (54.6%) PCP 22.0% MEMBERS CLUB m2 LOCATIONS UTILISATION 94,196 75,038 79 61.7% Based on 2 members PCP 54,039 PCP 35,893 PCP 40 per square metre FY2020 result does not include any contribu
Slide 11: Operational Achievements
Operational Achievements 79 Locations (June 2020) Locations Opened Locations Locations (ACT) (NSW) 313 29 41 10 23 June 2019 June 2020 June 2019 June 2020 215 Locations Locations (QLD) (VIC) 60 79 82 98 98 29 40 0 10 1 5 IPO Jun-19 Dec-19 Jun-20 Aug-20 Jun-21 Estimate Jun-21 Estimate June 2019 June
Slide 12: Financial Results
Financial Results 1 FY2019 Results Presentation
Slide 13: FY2020 Full Year Results
FY2020 Full Year Results FY2020 FY2019* Profit and Loss ($m) Variance % Comments (Ex AASB-16) (Statutory) Revenue 40.89 33.08 23.6% • Revenue Growth of 23.6% despite COVID-19 impacts Operating Costs (34.82) (25.80) 35.0% • Expenses include >$1m in legal EBITDA 6.07 7.29 (16.7%) fees, in the main for
Slide 14: FY2020 Full Year Results (Pre and during COVID)
FY2020 Full Year Results (Pre and during COVID) 8 Months (July to February) 12 Months (July to June) Comments FY2020 FY2019 Variance FY2020 FY2019 Variance Profit and Loss ($m) • Revenue 61.9% higher in first 8 Underlying Underlying % Underlying Underlying % months of FY2020 than FY2019 Revenue 33.1
Slide 15: Financial Snapshot
Financial Snapshot Revenue ($m) EBITDA ($m) EBITDA margin(%) 40.9 7.3 33.1 6.1 21.6% 22.0% 5.2 24.1 15.8% 14.8% 20.7 3.3 18.4 10.0% 1.8 FY2016 FY2017 FY2018 FY2019 FY2020 FY2016 FY2017 FY2018 FY2019 FY2020 FY2016 FY2017 FY2018 FY2019 FY2020 15 FY2020 FULL YEAR RESULTS PRESENTATION
Slide 16: Member Snapshot
Member Snapshot Members by State 6% 11% Members VIC QLD 46% ACT 94,196 37% NSW Members by Brand 3% 54,039 Other 35,631 27% 29,124 FitnFast 25,218 26,754 67% Club Lime 3%, Hiit Republic FY2015 FY2016 FY2017 FY2018 FY2019 FY2020 16 FY2020 FULL YEAR RESULTS PRESENTATION
Slide 17: Member Growth
Member Growth 17 FY2020 FULL YEAR RESULTS PRESENTATION
Slide 18: Revenue Growth
Revenue Growth 18 FY2020 FULL YEAR RESULTS PRESENTATION
Slide 19: Balance Sheet
Balance Sheet Balance Sheet ($m) FY2020 FY2019 Highlights Cash 30.10 14.39 • Proceeds of Capital raises strengthened Receivables and other Current Assets 5.62 0.70 Balance Sheet Plant and Equipment 28.65 9.77 • Large investment in new clubs and Right of Use Assets 176.88 9.43 refurbishments with net
Slide 20: Cashflow
Cashflow Cashflows ($m) FY2020 FY2019 Highlights Opening cash 14.39 0.54 • Proceeds of capital raises allowing $43m to fund growth Cashflows from operations 3.04 7.34 • Acquisitions of Healthworks and FitnFast Investment in plant and equipment (17.33) (4.09) Acquisition of businesses (17.73) (7.12)
Slide 21: Outlook
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Slide 22: Locations
Locations Reaching more Australians 12 in fit-out 82 22 11 Locations under 16 Locations under Operating New locations negotiation for locations opening soon negotiation to lease acquire Our Club Lime and hiit republic Our pipeline of new locations Our pipeline never stops growing Building on our str
Slide 23: Our new boutique offering
Our new boutique offering ▪ Yoga, Pilates and Barre – 3 studios, 1 location, 1 membership ▪ Clean, white, natural fit-out ▪ First location in Belconnen, ACT goes into build September 2020 ▪ Expected to open in November 2020 ▪ Additional locations now being negotiated ▪ Pricing ▪ $59.90 per week, Gro
Slide 24: Average size of club
Average size of club 364 m2 Clubs Opened and Operating 13 (August 2020) Additional Clubs Opening Soon 10 Total Members 3,520 Average members per club 270 Average EBITDA margin 50.0% (within 6 months) Average Utilisation 49.9% (at 1.5 members per m2) First Club Opened March 2019 Average Revenue per m
Slide 25: Progress since acquisition
Progress since acquisition Acquisition Completed 13 February 2020 ▪ ACT (1 club) ▪ Fully converted to Club Lime, new fit-out and equipment Total Members 22,154 ▪ VIC (2 clubs) Clubs Acquired 13 ▪ Fully converted to Club Lime, new fit-out and equipment Clubs still trading as FNF 8 ▪ NSW (10 clubs) Av
Slide 26: Progress since acquisition announced
Progress since acquisition announced Acquisition Completed 21 August 2020 ▪ Commenced review of territories to determine opportunities and any competing locations (Plus –v- Viva locations) Total Members ~175,000 (Franchisee Members) ▪ Started to review IT systems to understand what immediate Clubs A
Slide 27: Opportunities for Growth
• Opportunities for Growth Status Comment Immediate Priorities (<12 months) Commenced identifying suitable Use the available runway and identified territories to roll-out new franchisee locations, both Corporate territories and non-Corporate Have commenced discussions Acquisition and conversion of e
Slide 28: Network Operation Centre (NOC)
Network Operation Centre (NOC) Introducing the Viva Leisure NOC ▪ First of its kind for a health club operator ▪ Built to operate 24/7, with up to 11 simultaneous operators at peak ▪ Provides 24/7 monitoring of all (82) locations via live CCTV footage, and telephone, network and system statistics. ▪
Slide 29: Q&A
2 FY2019 Results Presentation Q&A
Slide 30: Appendix
AASB 16 : Leases Appendix The Viva difference 3 FY2019 Results Presentation
Slide 31: AASB 16: Leases
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Slide 32: AASB Leases
AASB 16 Leases Impact of AASB 16 Leases at 30 June 2020 ▪ EBITDA impact – increase of $6.7m Profit & Loss ▪ NPAT impact – reduction of $7.7m ▪ Recognition of Right of Use Asset and Lease Liability ▪ Total Assets impact – increase of $205.1m Balance Sheet ▪ Total Liabilities impact – increase of $216
Slide 33: Statutory Reconciliation
Statutory Reconciliation Underlying & AASB 16 for the Full Year Ended 30 June 2020 FY20 AASB16 FY20 Profit and Loss ($m) Statutory Impact (pre AASB16) Revenue 40.89 0.00 40.89 EBITDA 15.73 (9.66) 6.07 Depreciation and Amortisation 17.01 (12.94) 4.07 EBIT (1.28) 3.28 2.00 Finance Costs 8.06 (7.30) 0.
Slide 34: Statutory Reconciliation
Statutory Reconciliation Underlying & AASB 16 as at 30 June 2020 FY20 AASB16 FY20 Balance Sheet ($m) Statutory Impact (pre AASB16) Cash 30.10 30.10 Receivables and other Current Assets 5.62 5.62 Plant and Equipment 28.65 16.04 44.69 Right of Use Asset 176.88 (176.88) - Intangibles 20.53 20.53 Deferr
Slide 35: Statutory Reconciliation
Statutory Reconciliation Underlying & AASB 16 for the Full Year Ended 30 June 2020 FY20 AASB16 FY20 Cashflows ($m) Statutory Impact (pre AASB16) Opening cash 14.39 14.39 Cashflows from operations 3.04 (9.66) (6.62) Investment in plant and equipment (17.33) (17.33) Acquisition of businesses (17.73) (
Slide 36: The Viva difference
3 FY2019 Results Presentation The Viva difference
Slide 37: The Viva Leisure Ecosystem
The Viva Leisure Ecosystem 96,000 members 4 States of Australia Unique Value Proposition One Membership Paying $15-$40 ▪ ACT ▪ Multiple brands Current per week ▪ New South Wales ▪ Multiple fitness options ▪ Club Lime ▪ Victoria ▪ Multiple opportunities ▪ hiit republic Growing ▪ Queensland for second
Slide 38: Acquisition timeline
Acquisition timeline 13 37 Acquisitions Locations 4 clubs 1 club 1 club 1 club 8 clubs 13 clubs AFM 2010 2018 2018 2019 2019 2020 2020 1 club 1 club 3 clubs 1 club 2 clubs 1 club 2020 & 2012 2018 2019 2019 2019 2020 beyond Various logos and images above are not the property of Viva Leisure Limited a
Slide 39: Fitness as a Service (FaaS) our data is what makes us different
Fitness as a Service (FaaS) our data is what makes us different The Viva Fitness as a Service (FaaS) model 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, sometimes requiring
Slide 40: The Viva business health is the new wealth
The Viva business health is the new wealth ▪ 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 75 different business sites, the majority of which are health clubs under th
Slide 41: Scalable business model fitness is an essential part of life
Scalable business model fitness is an essential part of life Viva Leisure’s hub and spoke model New concepts, new USP’s ▪ 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 rolls out new concept
Slide 42: Investment highlights not all health clubs are built the same
Investment highlights not all health clubs are built the same Growth opportunity Attractive member High quality facilities Technology focused Strong cash flow from proposition operator model ▪ Highly fragmented market with ▪ High levels of member ▪ Data driven site selection ▪ Technology focused dec