Xp Factory Plc · LSE:XPF
Xp Factory — Investor Day (March 2025)
68 slides from Xp Factory's investor day presentation, Mar 5, 2025
Slide 1: Capital Markets Day, 5th March 2025
CAPITAL MARKETS DAY, 5TH MARCH 2025
Slide 2: Disclaimer
DISCLAIMER XP FACTORY The information contained in this document (“Presentation”) has been prepared by XP Factory plc (the “Company”). This Presentation has not been approved by an authorised person in accordance with Section 21 of the Financial Services and Markets Act 2000 and therefore it is bein
Slide 3: Full recording and presentation online
FULL RECORDING AND PRESENTATION ONLINE XP FACTORY Please note, this is a condensed version of the Capital Markets Day presentation A full recording of the event is available via Investor Meet Company, https://www.investormeetcompany.co m/meetings/xp-capital-markets-day 3 CAPITAL MARKETS DAY 2025
Slide 4: Industry Trends and XPF Position
INDUSTRY TRENDS AND XPF POSITION Richard Harpham CEO
Slide 5: Meet the Team: CEO
MEET THE TEAM CEO Richard Harpham Chief Executive Officer • Joined XP Factory (formerly Escape Hunt) on its Admission to AIM in 2017 • Harris + Hoole – CFO, and then Managing Director, responsible for its turnaround • Pret A Manger 4 years as Global Head of Strategy • Strategic and financial positio
Slide 6: Capital Markets Day Agenda
CAPITAL MARKETS DAY AGENDA PRESENTATIONS Richard Harpham Industry Trends and XP Factory Position CEO Dominic Richards Use of Data and Site Learnings Strategy and Corporate Finance Director Andrew Jacobs & Sarah Lloyd-Baker Brand Experience Evolution COO CCO & CMO Graham Bird Financial Targets CFO Q&
Slide 7: Two complementary experiential brands
OUR BRANDS TWO COMPLEMENTARY XP FACTORY EXPERIENTIAL BRANDS 7 CAPITAL MARKETS DAY 2025
Slide 8: Brand Detail: Escape Hunt
BRAND DETAIL • UK roll out commenced in 2018 • Market leader in Escape Rooms • 26 O&O sites (23 of which UK) • 21 Franchise sites, all int’l • Escape Rooms, City Hunts, Play at home / digital • Catalogue of > 30 games developed in house • Games repeatable, modular and flexible by design • 99% averag
Slide 9: Brand Detail: Boom
BRAND DETAIL • First site opened in 2020, acquired by XP Factory in 2021 • Market leader in Competitive Socialising • 26 O&O sites (25 of which UK) • 5 Franchise sites, all UK • Multi-experience proposition (inc. AR axes, AR Darts, Karaoke, Shuffleboard) + Curated cocktails, live DJs, events • Low c
Slide 10: Brand Propositions Recap
BRAND PROPOSITIONS RECAP XP FACTORY ESCAPE HUNT BOOM Typical size of site ~3,500 sq ft ~10,000 sq ft Game / drink / food split 95%/5%/0% 45%/50%/5% Average spend pp (inc F&B) ~£25 ~£25 2024 # of customers 500,000 2,000,000 Male vs female split 47% / 53% 53% / 47% Corporate share of revenue ~7% ~15%
Slide 11: Brand Propositions Recap
BRAND PROPOSITIONS RECAP XP FACTORY ESCAPE HUNT BOOM Typical size of site ~3,500 sq ft ~10,000 sq ft Game / drink / food split 95%/5%/0% 45%/50%/5% Average spend pp (inc F&B) ~£25 ~£25 2024 # of customers 500,000 2,000,000 Male vs female split 47% / 53% 53% / 47% Corporate share of revenue ~7% ~15%
Slide 12: Brand Propositions Recap
BRAND PROPOSITIONS RECAP XP FACTORY ESCAPE HUNT BOOM Typical size of site ~3,500 sq ft ~10,000 sq ft Game / drink / food split 95%/5%/0% 45%/50%/5% Average spend pp (inc F&B) ~£25 ~£25 2024 # of customers 500,000 2,000,000 Male vs female split 47% / 53% 53% / 47% Corporate share of revenue ~7% ~15%
Slide 13: National Spread Underpins UK Runway
NATIONAL SPREAD UNDERPINS UK RUNWAY XP FACTORY 13 CAPITAL MARKETS DAY 2025
Slide 14: Experiential Leisure: A Growing Industry
EXPERIENTIAL LEISURE A GROWING INDUSTRY XP FACTORY INDUSTRY MEGATRENDS: • Experiences over goods INDUSTRY GROWTH, 2024 • Remote work driving 7.0% increased importance 6.0% of “IRL” social events 6.0% • Socialising centred 5.0% around entertainment 4.0% Growth in experiential 3.0% venues, in place
Slide 15: Market Leader in Experiential Leisure
MARKET LEADER IN EXPERIENTIAL LEISURE XP FACTORY • EH and Boom are the UK COMPETITIVE SOCIALISING # OF ESCAPE ROOM # OF UK ROOMS1 market leaders in Escape UK SITES1 140 Room and Competitive 30 Socialising 120 25 • Scale advantages 100 • Repeatable, modular sites 20 80 and products that can be replic
Slide 16: Market Leading Customer Experience
MARKET LEADING CUSTOMER EXPERIENCE XP FACTORY • Scale and learnings help to drive market leading product and AVERAGE REVIEW SCORE BY BRAND proposition 5.0 4.9 4.9 4.9 • Reflected in top tier 4.9 4.8 4.8 4.8 4.8 reviews for each 4.8 4.8 4.8 4.7 4.7 4.7 brand 4.7 4.7 4.6 4.7 4.6 4.6 4.6 4.6 4.5 4.5 4.
Slide 17: EH Emerged a Winner in a Consolidating Industry
EH EMERGED A WINNER IN A CONSOLIDATING INDUSTRY • Escape Room industry has experienced a full cycle 1. Initial expansion with rapid industry growth NUMBER OF ESCAPE ROOM COMPETITOR SITES BY OPENING YEAR (INDICATOR OF GROSS ADDITIONS) 1 2 3 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024
Slide 18: EH Emerged a Winner in a Consolidating Industry
EH EMERGED A WINNER IN A CONSOLIDATING INDUSTRY • Escape Room industry has experienced a full cycle 1. Initial expansion with rapid industry growth NUMBER OF ESCAPE ROOM COMPETITOR SITES BY OPENING YEAR 2. Consolidation started prior to (INDICATOR OF GROSS ADDITIONS) covid as weaker, sub-scale opera
Slide 19: Increasingly Attractive to Landlords
INCREASINGLY ATTRACTIVE TO LANDLORDS • As industry leader in a AVERAGE TOTAL LANDLORD INCENTIVE (CAP CON + RENT FREE) PER SITE growing industry, we are BY ESCAPE HUNT COHORT increasingly attractive to £160,000 landlords £140,000 • Built up demonstrable reputation and customer £120,000 experience ove
Slide 20: Leadership Reflected in Unit Economics
LEADERSHIP REFLECTED IN UNIT ECONOMICS XP FACTORY TYPICAL SITE BOOM (TIER 1 ESCAPE HUNT LOCATIONS) Market position #1 #1 Average review score 99% 97% Revenue per site ~£600k ~£2m EBITDA margin ~40% ~20% Gross Build cost £600k ~£1m Landlord incentive ~£150k ~£300k Net ROCE ~50% ~60% 20 CAPITAL MARKET
Slide 21: Culture of Continuous Improvement
CULTURE OF CONTINUOUS IMPROVEMENT LEARNINGS •Best practice (marketing, operations, product etc.) •Incremental revenue streams (drinks, outdoor, corporate / schools etc) •Site selection, site layout EFFICIENCY Case study; Escape Hunt •2+ games per games master, aided by automation improvement •Shorte
Slide 22: LFL Unit Economics Improvement
LFL UNIT ECONOMICS IMPROVEMENT Self driven improvement observable in site level P&L: AVERAGE 2018 SITE 2019 2024 GROWTH DRIVERS Best practice, incremental Revenue £490,000 £660,000 35% revenue streams, awareness, • Unit economics at the 7 original EH sites some new games have improved sharply Labour
Slide 23: Learnings to Drive Improvements
LEARNINGS TO DRIVE IMPROVEMENTS Boom at an earlier stage of the lifecycle, learnings being applied and driving OXFORD STREET ESTIMATED MARGINAL CONTRIBUTION improvements e.g.: (INC. ASSOCIATED F&B) PER SQ M BY GAME LANE • Game mix and capacity to unlock pent up demand (e.g. Oxford St incremental lan
Slide 24: Strategy Targets: FY28
STRATEGY TARGETS FY28 targets: Market leading position and exceptional unit economics drive £90m revenue confidence in strategic plan to (run rate at year end: £100m) accelerate growth £13m pre-IFRS EBITDA (Group EBITDA margin 15%) 24 CAPITAL MARKETS DAY 2025
Slide 25: Thank you
Thank you Richard Harpham CEO
Slide 26: Use of Data & Site Learnings
USE OF DATA & SITE LEARNINGS Dominic Richards Strategy & Corporate Finance Director
Slide 27: Meet the Team: Strategy & Corporate Finance
STRATEGY & MEET THE TEAM CORP. FINANCE Dominic Richards Strategy and Corporate Finance Director • Joined XP Factory in 2023 • Hedge Fund investor 2015-2023, focused on mid-cap European equities • Investment Partner at Rye Bay Capital; ~$1bn Hedge Fund • Pensato Capital (acquired by RWC Partners); ~$
Slide 28: Market Leader = Data
MARKET LEADER = DATA XP FACTORY • 30 Boom / 23 EH UK sites • ~2m Boom / ~0.5m EH annual COMPETITIVE SOCIALISING # OF ESCAPE ROOM # OF UK ROOMS1 customers UK SITES1 140 30 Uniquely positioned to 120 understand: 25 100 • Optimal location for 20 each brand 80 15 • Optimal site format 60 • Customer da
Slide 29: Site Indicators
SITE INDICATORS XP FACTORY • Internal site model incorporating learnings from Site Proxy Catchme Demogra Affluence phics (avg Tourist visits Student population Corporate Naturally Competition passing Visibility of Passenger traffic Nighclubs / site / and proximity of bars within Outdoor broad range
Slide 30: Site Location Learnings
SITE LOCATION LEARNINGS “MICRO” LOCATION (WHERE WITHIN THE “MACRO” LOCATION (WHICH TOWN / CITY) TOWN / CITY) Strong performance across a wide range of: “Destinational”; large catchment area, most • Affluences visits are pre-booked Can be successful in less visible locations with • Catchment popula
Slide 31: Consistent Performance Across EH Sites
CONSISTENT PERFORMANCE ACROSS EH SITES • Consistent performance across a broad spectrum of sites 2024 EH SITE EBITDA MARGINS, ALL UK MATURE SITES 60% 57% • All sites strongly profitable 52% 52% 51% 51% 49% 49% 50% 46% 45% 44% 44% 42% 39% • 18 out of 20 mature sites above 40% 36% 34% original target
Slide 32: Improving Returns for Successive Cohorts
IMPROVING RETURNS FOR SUCCESSIVE COHORTS • Speed to maturity and ROCE have been improving with successive cohorts, aided by: AVERAGE NET RETURN ON CAPITAL BY EH COHORT 70.0% • Impact of learnings on speed of ramp up, build 60.0% cost and profitability 50.0% • Increased landlord incentives 40.0% 30.0
Slide 33: Case Study: Worcester
CASE STUDY: WORCESTER • Worcester EH opened in August 2024 • Worcester “macro” location • Worcester average salary £34.4k (UK avg £35.4k) • City population ~100k (smallest EH catchment) 33 CAPITAL MARKETS DAY 2025 Source: ONS
Slide 34: Case Study: Worcester
CASE STUDY: WORCESTER • Worcester EH opened in August 2024 • Worcester “macro” location • Worcester average salary £34.4k (UK avg £35.4k) • City population ~100k (smallest EH catchment) • “Micro” location • Centrally located in a high footfall centre, but: • 2nd floor, recessed – low naturally passi
Slide 35: Worcester Competitive Environment
WORCESTER COMPETITIVE ENVIRONMENT • EH’s exceptional content and higher build and maintenance budgets vs competition are reflected in relative: WORCESTER AVERAGE MONTHLY REVIEWS AND REVIEW SCORE • Customer numbers (e.g. ~6x review SINCE OPENING frequency as a v. rough proxy) 160 140 Avg # of reviews
Slide 36: Worcester Competitive Environment
WORCESTER COMPETITIVE ENVIRONMENT • EH’s exceptional content and higher build and maintenance budgets vs competition are reflected in relative: WORCESTER AVERAGE MONTHLY REVIEWS AND REVIEW SCORE • Customer numbers (e.g. ~6x review SINCE OPENING frequency as a v. rough proxy) 160 99.4% 100% • Review
Slide 37: Encouraging Initial Performance
ENCOURAGING INITIAL PERFORMANCE REVENUE BY WEEK AFTER OPENING • Initial Worcester performance in line £14,000 with the 2022/23 cohort (and ahead of prior cohorts) £12,000 £10,000 • Likely to translate above average Weekly revenue £8,000 EBITDA and ROCE £6,000 £4,000 £2,000 £- 1 2 3 4 5 6 7 8 9 10 11
Slide 38: EH can be successful across a wide variety of sites
EH can be SUCCESSFUL ACROSS A WIDE VARIETY of sites • Secondary / tertiary sites as well as premium locations • Potential to be opportunistic on location at attractive terms 38 CAPITAL MARKETS DAY 2025
Slide 39: EH Runway
EH RUNWAY • Exceptional performance across site bands, implies longer runway than initially thought • Now potential for >100 sites mid term (originally >50), sense checks: SHORT TERM ILLUSTRATIVE • ~100 UK towns and cities with TARGET: population >100k • Potential for multiple in certain 8-10 NEW SI
Slide 40: Site Location Learnings
SITE LOCATION LEARNINGS “MACRO” LOCATION (WHICH TOWN / CITY) “MICRO” LOCATION (WHERE WITHIN THE TOWN / CITY) Exceptional performance in: More spontaneous bookings and walk-ins; increased importance of: • Large catchment populations • Site visibility • Population dense urban areas with inbound catchm
Slide 41: Strong Unit Economics
STRONG UNIT ECONOMICS • “Tier 1” defined as premium footfall locations within large catchment cities; 9 mature locations 2024 EBITDA / ROCE – average for “Tier 1” sites £800,000 90% • Exceptional unit economics £700,000 80% Site EBITDA or net capital employed 70% £600,000 61% • ~£450k average EBITDA
Slide 42: Case Study Oxford St
CASE STUDY OXFORD ST • Tier 1 location • Highly visible site, high footfall • Central location, proximity to local transport links, large inbound traffic • Strong corporate demand • Basement locations are more challenging for traditional retail lower rent Strong utilisation through the week Si
Slide 43: Continuous Improvement
CONTINUOUS IMPROVEMENT • Growth driven by continuous self improvement e.g.: OXFORD ST BOOM, ROLLING 52 WEEK, INDEXED 200 190 • Additional assets to unlock R52w indexed revenue, 1/1/2023=100 180 pent up demand 170 • Operational learnings 160 150 • Reorientation of site 140 • Corporate sales initiativ
Slide 44: Case Study – Cambridge
Case study – Cambridge • Prime location in a secondary city • Incorporates cumulative learnings 2nd strongest opening performance in the estate 44 CAPITAL MARKETS DAY 2025
Slide 45: Boom Runway
BOOM RUNWAY • Prioritise premium, high footfall locations in the short term given exceptional returns historically SHORT TERM ILLUSTRATIVE TARGET: FY28 targets: • ~35-40 sites 2-4 NEW SITES • ~£60m revenue • ~20% EBITDA margin P.A. 45 CAPITAL MARKETS DAY 2025
Slide 46: Summary
SUMMARY • Market leadership gives access to the large data pool • Data used to drive decisions • Ongoing site improvements • New site openings • Learnings have driven the FY28 strategy • Accelerated EH roll-out • Focus on prime Boom locations 46 CAPITAL MARKETS DAY 2025
Slide 47: Thank you
Thank you Dominic Richards Strategy & Corporate Finance Director
Slide 48: Brand Experience Evolution
BRAND EXPERIENCE EVOLUTION Andrew Jacobs COO Sarah Lloyd-Baker CCO & CMO
Slide 49: Site Selection
Aad MOOa td va Filiva Woods Site Selection
Slide 50: Smart Site Evaluation Optimises Selection
SMART SITE EVALAUATION OPTIMISES SELECTION DETAILED DATA DRIVEN 12 STEP FRAMEWORK Screen target cities Speak to local agents, Analyse individual Site visit Headline financial terms based on quantitative identify potential opportunities based on modelled model opportunities key criteria Dates agreed
Slide 51: Site Pipeline Funnel
SITE PIPELINE FUNNEL Jan to Date (2 months) Analysed Terms modelled, Returns criteria Sites in legal based on key Visited remain in active Sites signed met; offer made negotiations criteria discussions # locations (Boom +EH) 23 17 10 6 4 1 • Lots of opportunity – large number of attractive sites bei
Slide 52: Thank You
Thank You Andrew Jacobs COO Sarah Lloyd-Baker CCO & CMO
Slide 53: Financial Targets
FINANCIAL TARGETS Graham Bird CFO
Slide 54: Meet the Team: CFO
MEET THE TEAM CFO Graham Bird Chief Financial Officer • Joined as CFO in January 2020 • Chartered accountant, qualified with Deloitte in London • Founding employee at Gresham House plc • Established and managed successful strategic equity business unit • Focus on quoted and non-quoted equity investm
Slide 55: Strong and Profitable Financial Performance
STRONG AND PROFITABLE FINANCIAL GROWTH PERFORMANCE REVENUE GROWTH ADJUSTED EBITDA (PRE-IFRS 16) 70.0 GROWTH 7 ~60 6.4 • Aggressive growth over the past 5 60.0 6 years 5.1 5 • Continued revenue growth 50.0 reflecting site expansion and 45.8 4 LFL growth 40.0 3 2.6 • Improvement in EBITDA £m reflectin
Slide 56: Pre-IFRS Reporting Closer Matches Cash
PRE-IFRS REPORTING CLOSER MATCHES CASH XP FACTORY • XP focuses on UK GAAP as this closer matches cash; rent is IFRS TO UK GAAP PROFIT BRIDGE, FY24 consistent across the lifetime of 6.0 the lease • IFRS 16 interest 5.0 disproportionately higher in early leases 4.0 • This tends towards zero as 2.5 lea
Slide 57: EBITDA as a Proxy for Cash Generation
EBITDA AS A PROXY FOR CASH GENERATION XP FACTORY • We believe pre-IFRS EBITDA after maintenance capex is the best CASH GENERATION 15M TO MAR 2024 proxy for underlying cash profit 12.0 • Rent considered as an operating cash cost (vs 9.9 0.5 included in depreciation and 10.0 interest under IFRS 16) •
Slide 58: Maintenance Capex Below Depreciation
MAINTENANCE CAPEX BELOW DEPRECIATION XP FACTORY • Maintenance capex assumption of ~3% of sales based on detailed breakdown of expected replacement cycles CASH GENERATION 15M TO MAR 2024 • Current maintenance 7.0 capex levels are below this 6.3 expected long-term level 6.0 due to a young estate • Thi
Slide 59: Strong Historic Cash Generation
STRONG HISTORIC CASH GENERATION XP FACTORY Cash generation 15m to Mar 2024 9.0 • Strong cash generation from 8.0 1.5 0.0 7.6 operations, typically ahead -0.4 of EBITDA reflecting cash 7.0 6.3 0.1 6.3 5.9 rent free periods and WC 6.0 -1.3 cycle -0.4 5.0 £m 4.0 • Young estate means 3.0 maintenance cap
Slide 60: Strategic Plan: £90m Revenue, £13m Pre-IFRS EBITDA
STRATEGIC PLAN Increase revenue by 50%+ and double EBITDA by Mar 2028 • Bank financing enables acceleration of expansion plans • Consistently strong returns from Escape Hunt and site economics has increased size of the opportunity in the UK Vision for the year to March 2028 • £90m revenue Learnings
Slide 61: Strategy Implementation
STRATEGY IMPLEMENTATION XP FACTORY Site expansion Unit economics Head Office costs • Escape Hunt – accelerate expansion • Investing in data and systems, • Operational leverage on head office; implementing key learnings built to manage a larger scale of sites • Target avg 8-10 new EH sites per year •
Slide 62: Targets Illustration
TARGETS ILLUSTRATION XP FACTORY FRANCHISE xpfactory ~£60m turnover @ ~20% ~£1.5m - £2.0m Head office fixed costs ~£30m turnover @~40% EBITDA EBITDA contribution 10% - 12.5% of sales ~35-40 sites ~50-60 sites Contained costs +2-4 premium sites p.a. (+~8-10 p.a.) Capex~£900k / site Capex~£600k / site
Slide 63: Targets Will Drive Strong Cash Generation
TARGETS WILL DRIVE STRONG CASH GENERATION XP FACTORY • The strategic plan will deliver a business with strong ILLUSTRATIVE CASH GENERATION FY28 underlying free cash flow 14.0 generation; 12.0 • Business will be in a strong position to consider capital 10.0 allocation strategies e.g.: • Dividend poli
Slide 64: Summary
SUMMARY • Strong historic cash generation and profitable growth drives confidence in strategy • FY28 targets: £90m revenue, £13m EBITDA whilst maintaining Net Debt ~1.0x EBITDA • Resulting cash generative business will be in a strong position to consider capital allocation options 64 CAPITAL MARKETS
Slide 65: Thank you
NN adv aa MOOa Uva Jiliva Wooa Thank you = Graham Bird Grat A | “mtn is
Slide 66: Summary & Q&A
SUMMARY & Q&A Richard Harpham CEO
Slide 67: Summary
SUMMARY XP FACTORY • As the market leader, XP Factory is well positioned to succeed in a growing industry • Scalable, cash generative business founded on exceptional unit economics • Significant “white space” opportunities identified for both brands and are being proactively pursued • Brand and prod
Slide 68: Capital Markets Day, 5th March 2025
CAPITAL MARKETS DAY, 5TH MARCH 2025