Gym Group Plc · LSE:GYM
Gym — The Gym Group — FY2024 Earnings Presentation
44 slides from Gym's earnings presentation, Mar 12, 2025
Slide 1: Full Year Results 12 March 2025
Full Year Results 12 March 2025
Slide 2: Overview, Financial Results, Growth Plan, Summary & Outlook
OROROMS Overview Financial Results Next Chapter Growth Plan - Progress Report Summary & Outlook
Slide 3: Will Orr, Chief Executive Officer
Will Orr Chief Executive Officer
Slide 4: A strong 2024
A strong 2024 Membership up 5% to 891k (2023: 850k) Yield up 7% vs 2023 Strong cash generation Free cash flow of £37.5m, up 39% YoY Net debt reduced by £5.1m since Dec 2023 1. Like-for-tke revenue vs 2023 includes all sites open as at 31 December 2021 ©) the gym group Revenue up 11% to £226.3m (2023
Slide 5: Luke Tait, Chief Financial Officer
Luke Tait Chief Financial Officer
Slide 6: Financial summary
Financial summary (2023: £(8.3)m) (2023: £27.0m) 7 (Dec 2023: £(66.4)m) Average Members ) ( aRPMM ( Revenue ) Noviaticod Ret! (LNR) tess 906k £20.81 £226.3m £47.7m +4% +7% +11% 424% +34k vs PY +£1.31 vs PY +£22.3m vs PY +£9.2m vs PY (2023: 872k) (2023: £19.50) (2023: £204.0m) (2023: £38.5m) JW Ne S
Slide 7: Group adj. EBITDA LNR of £47.7m
Group adj. EBITDA LNR! of £47.7m £m 2024 2023 YoY % £m Revenue 2263 204.0 223 1% Cost of Sales (2.9) (2.8) (0.1) (4%) Gross Profit 223.4 201.2 22.2 1% Site Costs? (Excl. Normalised Rent) (109.6) = (104.7) (4.9) (5%) (2.6) Central Costs (Excl. Normalised Rent) (26.5) (21.0) (5.5) (26%) Normalised Ren
Slide 8: LFL revenue growth of 7%
LFL revenue growth of 7% LFL! ARPMM (£) Average Standard headline rate (£) 2150 £25.00 r) members 2100 +7% {0} £24.00 t 1 % 2050 “#157 20.00 £23.00 19.50 £2200 yield 19.00 £2100 107% 1850 18.00 £20.00 1750 £19.00 17.00 £18.00 1650 16.00 £17.00 @ the gym group 2022 1. Like-for-tke revenue vs 2023 inc
Slide 9: Site costs inflationary pressures...
Site costs inflationary pressures... Offset by cost optimisation initiatives...
Slide 10: Strong cash flow generation
Strong cash flow generation £m 477 442 (0.8) Group Adj. Movementin Maintenance& FreeCashFlow Non-Underlying Netintereston FreeCashFlow Expansionary Refinancingfees © EBTShare — Cash Flow Before EBITDA LNR Working Capital Enhancement Before Non- Costs Bank Debt & Non- Capex Purchase & Share Movement
Slide 11: 12 new sites opened in 2024 vs 6 in 2023
12 new sites opened in 2024 vs 6 in 2023 High proportion of Greater London sites (8) Investment in Tech & Data to deliver the Next Chapter growth initiatives Maintenance & enhancement capex spend of 5% of revenue in 2024 (2023: 5%) as we continue to invest in existing sites
Slide 12: Bank facility
£m Bank facility! Bank borrowings Cash & cash equivalents Bank net debt Non-property lease indebtedness Non-Property Net Debt? Adjusted Leverage? Fixed Charge Cover? 2024 90.0 (610) 30 (58.0) (33) (61.3) 1.3x 1.9x
Slide 13: Combined £90m facility
• Combined £90m facility: • £45m of Term Loan and £45m of RCF • Maturing in June 2027 (plus two 1-year extension options) • Existing tier 1 banking syndicate remains in place; equal share (HSBC, Barclays, NatWest) • Improved interest terms – min. annual margin of 2.75% (was 2.85%) above SONIA • Quar
Slide 14: Mature site ROIC
Mature site ROIC! 27% ( increased 25% QWo Roic by 4pp to 25% 21% ° ° C, i=) 27% ROIC - ° 2023 @ 30% ROIC target
Slide 15: 24 25 26 27 28 29 30 31 32 33
1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33
Slide 16: Current trading
OD Current trading Rollout Ollo EBITDA LNR guidance
Slide 17: Will Orr, Chief Executive Officer
Will Orr Chief Executive Officer
Slide 18: Investment case: sustained growth from free cash flow
Slide 19: Low cost driving new highs in gym penetration
Low cost driving new highs in gym penetration Change 2012 - 24 15.9% Total +3.8 ppts 146% 15.1% £5.9bn ‘o ; Gym Market Size y . Rest of Penetration Market -0.2 ppts 3.5% CAGR 2012-24 (% of Population) 2012 2022 2023 2024 10.7 Low Cost Gym Members ced aie II 26% 2% 28% +24 ppts © 2.9% CAGR 2012-24 (%
Slide 20: Full Year Results
Full Year Resuit
Slide 21: Increasing influence of Gen Z strengthens our tailwinds
Gen Z:1997-2012 (13-28 years old) Increasing influence of Gen Z strengthens our tailwinds Gen Z is becoming a key part of the gym market, with positive attitudes to fitness Generation Split: UK Population & TGG Average Members! Silent Gen Baby Boomer Gen X 40% Millennial 21% GenZ Gen Alpha UK Popula
Slide 22: Fitness increasingly seen as high priority spend
Fitness increasingly seen as high priority spend % of consumers looking to cut back in the next 3 months, by category! 1 4 ' | Children Petfood Fitness & | Longstay Short stay Tv / music Home & Health& Takeaways Clothing Eating / ‘clothing/care _/care wellbeing | holidays holidays Technology subscri
Slide 23: Members visiting more frequently
Members visiting more frequently +120bps 53.5% 52.3% Higher proportion scoring us 5/5 [ +170bps 1 55.5% 57.2% FY 23 FY 24 FY 23 FY 24
Slide 24: A clear plan: The Next Chapter
Aclear plan: The Next Chapter Drive like-for-like revenue and Create funds for future growth generate cash options wn, ae | Accelerate rollout of quality sites Broaden our growth Strengthen the core © the gym group FuleorResuts-2028 24
Slide 25: 2024 Key Initiatives
2024 Key Initiatives Optimise new member prices Reduce our existing member price gap Drive volume through Off-Peak and Saver products Innovate in promotions for profitable volume Better monetise features and add-ons Become the #1 brand locally Strengthen Harness ad-tech to enhance efficiency the cor
Slide 26: Pricing headroom remains an opportunity
Pricing headroom remains an opportunity Continued opportunity to price ahead of inflation Value for money maintained despite increasing prices Simon-Kucher Price / Value Map (Latest View Aug 2024) Headline Rate (Dec 23-24) Value for money (0 to 10) High Position on the chart continues aD £2453 to in
Slide 27: Strong gains as we unlock clear opportunity for yield growth
pA Strong gains as we unlock clear opportunity for yield growth Key Wins in 2024 New Member Pricing Further narrowed the gap to competition in headline rates and We remain cheaper in competing locations joining fees, supported by 3 tier membership architecture Average difference to The Gym Group in
Slide 28: Building momentum in marketing efficiency & effectiveness
Building momentum in marketing efficiency & effectiveness Key Wins in 2024 Dynamic Creative Initial use of real-time ad-tech delivering benefits in marketing effectiveness, volume & revenue through more relevant content Website Conversion Programme A/B testing programme established and delivering re
Slide 29: Consistency driving improvements in ad campaigns
Consistency driving improvements in ad campaigns 51% 46% 42% yo% 41% 44% 42% 38% Oct-23 Feb-24 Oct-24 Oct-23 Feb-24 Oct-24 Oct-23 Feb-24 Oct-24 “based on off-peak starting price point
Slide 30: Initial retention initiatives gaining traction
Initial retention initiatives gaining traction Key Wins in 2024 Early Life CRM Built on success ininitial email engagement with segmented approach by member demographic App Upgrade Range of new app features launched & gaining traction. +159k more members engaged with our Workouts Hub H2 YoY Acquire
Slide 31: The Next Chapter
The Next Chapter Drive like-for-like revenue and generate cash ae | Accelerate rollout of quality sites Broaden our growth Strengthen the core © the gym group FulYeorResuts-2028 31
Slide 32: New sites opened in 2024
Orpington London Euston Road Manchester Oxford Road Welwyn Garden City London Plaistow Dudley East Ham Barking Road London Bromley By Bow London Surbiton Gillingham London Shepherd’s Bush London Elephant & Castle
Slide 33: Translating into strong initial performance
Translating into strong initial performance 2024 sites are performing well ahead of historical average Key Drivers of Out-Performance Member Volume vs 2022 Average Curve, as at 31 Jan == Benchmark: 2022 average site performance oy, —= Weeks Disciplined focus on Improved launch strong location types
Slide 34: New Site targets by year, 2024 - 2026
New Site targets by year, 2024 - 2026 Opportunities to improve performance further in 2025 c.50 new sites over 3 years © with an average 30% ROIC 18-22 14-16 'e 12 2024 2025 2026
Slide 35: The Next Chapter 2025 builds on momentum, with more to come
The Next Chapter 2025 builds on momentum, with more to come Continuation of 2024 Initiatives: Ne Unlock pricing opportunity for new & existing members Support volume through geo- targeted marketing, Off-Peak and Saver Marketing ROI optimisation Further strengthen early-life engagement & retention Di
Slide 36: Will Orr, Chief Executive Officer
Will Orr Chief Executive Officer
Slide 37: Summary & Outlook
Summary & Outlook Large market with structural growth tailwinds Advantaged business model Multiple LFL growth opportunities and significant white space FY24 EBITDA LNR of +24%; mature site ROIC target of 25% achieved early, further progress expected in 2025 Accelerating self-funded rollout, averagin
Slide 38: Q&A
Slide 39: Appendix
group Appendix Full Year Resuits-2024 39
Slide 40: Business KPIs (5 year)
Business KPIs (5 year) Financial (£m) 2024 2023 2022 2021 2020 YoY Revenue 226.3 204.0 729 106.0 80.5 1% Group Adj. EBITDA LNR 477 38.5 38.0 5.7 (10.2) 24% Free Cash Flow SID 27.0 16.7 2.0 (16.6) 39% Expansionary Capital Expenditure 278 16.4 43.0 29.0 218 70% Non-Property Net Debt 613 66.4 76.0 44)
Slide 41: IFRS16 charges are currently £2.4m higher than cash rent
IFRS16 charges are currently £2.4m higher than cash rent Depreciation & Interest vs Property Payments IFRS 16 - Annual Charge FY 2024 £m Right of use asset depreciation 27.0 Property lease interest 15.0 Total 42.0 Property lease payment 39.6 Variance 24 240,000 220,000 200,000 180,000 160,000 140,00
Slide 42: Mature site economics
Mature site economics Include landlord contri s AND rent-free periods to take right commercial decision Rent-free periods previously exc! 200bps on ROIC in FY24 Strict 30% ROIC hurdle on all n lential and Focus on quality sites in Urban Greater London areas 1 Fixed property costs includes normalised
Slide 43: Definition of non-statutory measures
Definition of non-statutory measures Average Revenue Per Member Per Month (‘ARPMM’) Revenue divided by the average number of members divided by the number of months in the period Group Adjusted EBITDALNR Operating profit before depreciation, amortisation, share based payments and non-underlying item
Slide 44: Forward-looking statement disclaimer
Forward-looking statement disclaimer This presentation and information communicated verbally to you may contain certain projections and other forward-looking statements with respect to the financial condition, results of operations, businesses and prospects of The Gym Group ple. These statements are