World Gym Corporation · TWSE:2762
World Gym — World Gym Taiwan (World Fitness Services Ltd.) — Investor Presentation (April 2024)
40 slides from World Gym's investor presentation, April 2024
Slide 1: World Fitness Services Ltd.
World Fitness Services Ltd. April 2024 (2762 TT/TW) STRICTLY PRIVATE AND CONFIDENTIAL
Slide 2: Company Introduction
Company Introduction 2
Slide 3: Investment Thesis
INVESTMENT THESIS SIZEABLE AND SCALABLE RETURN ON INVESTED CAPITAL PREDICTABILITY LEADERSHIP Growth 3
Slide 4: World Gym at a Glance
WORLD GYM AT A GLANCE 2001 Founded The Largest Gym Operator in Taiwan 2024 Listed 2x larger than 2nd competitor by revenue Revenue Breakdown (2023) Taiwan Market Share Landscape (2023) Membership Personal Training By Revenue 20% 49% 50% 55% Financial Performance 25% (NT$mn) 9,465 8,863 9,428 By Memb
Slide 5: Built Through 20 Years of Unprecedented Growth
BUILT THROUGH 20 YEARS OF UNPRECEDENTED GROWTH • Started club acquisition • In 2017, CDIB invested a from other local • 14 new clubs opened in minority's sake in WGT operators, while total, including the 2nd • 54 new clubs including 38 full continuing club opening ELITE format club service, 13 Expre
Slide 6: Our Clubs Offerings
OUR CLUBS OFFERINGS World Gym Regular (91) World Gym Express (25) FITZONE (3) As of Feb. 2024 6 Notes: 1. Return on Invested Capital
Slide 7: Our Fitness Class
OUR FITNESS CLASS Cardio & Sculpt Dance International System Static Stretching Basic Happy Life Indoor Cycling Small Group Course FITZONE1 7 Notes: 1. Only available in the 3 Fit Zone clubs
Slide 8: With a Broad Portfolio Across Taiwan
WITH A BROAD PORTFOLIO ACROSS TAIWAN City # of Clubs 台北地區 (Taipei) 48* 桃園地區 (Taoyuan) 11 新竹地區 (Hsinchu) 4 苗栗地區 (Miaoli) 3 Headquarter (Taichung) 台中地區 (Taichung) 20 彰化地區 (Changhua) 3 嘉義地區 (Chiayi) 1 台南地區 (Tainan) 9 高雄地區 (Kaohsiung) 10 基隆地區 (Keelung) 1 宜蘭地區 (Yilan) 2 花蓮地區 (Hualien) 1 屏東地區 (Pingtung) 4
Slide 9: Highly Formulaic Process When Opening Clubs
HIGHLY FORMULAIC PROCESS WHEN OPENING CLUBS Location Selection & Permitting Design & Construction Pre-sale Club Opening Lease Negotiation • Clear site selection strategy • Maintained good • Experienced club design • Tightly executed, time- • Well-planned Grand Opening and rigorous internal relations
Slide 10: Proven Pre-Sale Process as Backbone of Success
PROVEN PRE-SALE PROCESS AS BACKBONE OF SUCCESS Approach 4 Pre-sale PROCESS 5 Club Opening Results • 10,000+ names and numbers of interested • Social media outreach Lead Generation local consumers • Street marketing Weeks ahead of Pre-sale Center Opening • Generating hundreds of appoints / day for •
Slide 11: Robust Member Growth with Strong Visibility
ROBUST MEMBER GROWTH WITH STRONG VISIBILITY Members Breakdown by Type of Membership Member Breakdown By Age Group 4% Dec 2018 Dec 2023 Age CAGR # of Members % # of Members (000’) % (000’) Monthly Dues 438k Prepaid Below 24 5 1.53% 39 7.99% 50.81% 96% 25-34 92 28.22% 152 31.15% 10.56% Monthly Dues Me
Slide 12: Best-in-Class Personal Training
BEST-IN-CLASS PERSONAL TRAINING Personal Training Key Facts Personal Training Revenue Evolution (NT$mn) Personal Training Revenue as % of Total Revenue 10,000 50% 50% 8,000 46% 47% 39% 6,000 42% 43% 4,391 4,473 4,694 40% 40% 3,783 4,000 3,531 2,660 1,775 2,047 2,000 0 of current active members have
Slide 13: Most Professional Workout App in Taiwan
MOST PROFESSIONAL WORKOUT APP IN TAIWAN 30K 8 50 700 Subscription 8 Major Themes Sports Types Videos Existing Member Non-Member Corporate For 1 month For 1 month For 1 month NT$69 NT$110 NT$0 Free 30 Days Trial Free 14 Days Trial Access to all videos and Access to all videos Access to all videos and
Slide 14: 24/7 Connection with Our Members
24/7 CONNECTION WITH At CLUB OUR MEMBERS Customize Workout Body Analyzer Group Sessions Check QR Code Check In Towel Services Locations Check At ANYWHERE Strength Stretching Dance Studio Gym and Boot camp Cardio Yoga and Meditation Family WOW and WG Studio 14
Slide 15: AI Motion Risk Detection
AI MOTION RISK DETECTION World Gym has introduced AI motion risk detection, which allows professional fitness trainers to analyze data and apply fitness training to improve posture. 15
Slide 16: Experienced Management Team
EXPERIENCED MANAGEMENT TEAM The WGT management team has been working seamlessly together for around a decade, driving the company to grow from less than 10 clubs a decade ago to the current undisputed market leader in Taiwan with over 100 clubs. • Chairman, President & Founder of • Joined WGT in 201
Slide 17: Our Capabilities Create Barriers to Entry
OUR CAPABILITIES CREATE BARRIERS TO ENTRY Scale Brand Network Real Estate Digital New Services Culture 17
Slide 18: Industry and Competitive Landscape
Industry and Competitive Landscape 18
Slide 19: Favorable Industry Tailwinds
FAVORABLE INDUSTRY TAILWINDS Rising Health And Aging Population Increasing Social Rising Entry Exercise Driving Fitness Network Sharing on Barriers for New Awareness Industry Growth Fitness Gym Operators Over the past few years, the Prevalence of social media and Large gym chains providing a
Slide 20: Taiwan Fitness Market Snapshot
TAIWAN FITNESS MARKET SNAPSHOT Taiwan Fitness Clubs Market Size Taiwan Fitness Penetration Rate – By Population NT$, in millions Population of Sports Population Rate of attending Penetration Population attending Year Participation engaged in private rate 20,000 1,200 above aged 15 private fitness Ra
Slide 21: Taiwan Competitive Landscape
TAIWAN COMPETITIVE LANDSCAPE Taiwan Presence Since 2001 2005 2008 2012 2015 2000 # of Clubs 1191 722 13 7 6 5 # of Clubs (2024 Target) ~130 792 -- -- -- -- # of Members ~440k1 ~254k2 -- -- -- -- Market Share (%) 55%1 25%2 -- -- -- -- Full-service Type Low-cost high value Full-service Full-service Fu
Slide 22: Taiwan Remains Under-Penetrated on a Global Level
TAIWAN REMAINS UNDER-PENETRATED ON A GLOBAL LEVEL Low gym penetration and density in Taiwan suggests tremendous growth potential. Fitness Market Size (2021) Fitness Membership Penetration (2021) (US$ mm) (%) 25.0% 35,033 21.2% 20.0% 16.7% 15.3% 15.0% 13.6% 3,944 3,943 10.0% 2,945 7.3% 2,831 2,580 5.
Slide 23: Global Benchmarking
GLOBAL BENCHMARKING World Gym’s superior monetization model allows the company to generate industry- leading club and member productivity. And also industry-leading unit economics with a faster payback period of 2-2.5 years. Source: Company website and filings, credit and research reports, market in
Slide 24: Even the US Penetration Continues to Grow
EVEN THE US PENETRATION CONTINUES TO GROW US Fitness Membership Penetration US Health & Fitness Club Membership 25.0% (in millions) 21.2% 70 20.0% 65 16.7% 15.3% 15.0% 13.6% 60 10.0% 55 7.3% 5.9% 5.8% 50 5.0% 3.4% 3.3% 3.0% 45 0.0% 1 2 40 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 Source: EIU
Slide 25: WGT Well-Positioned in an Underpenetrated Market
WGT IS WELL-POSITIONED TO BENEFIT FROM AN UNDERPENTRATED MARKET Gym Market Penetration Rate WGT has a dominant share in a low penetrated market 21% 16% 12% 4% 4% 1 US UK FR+NL+BE LatAm Taiwan Market Share of Top Players 22% 19% 20% 13% 49% US UK FR+NL+BE1 LatAm Taiwan Source: IHRSA, Ministry of Fina
Slide 26: Company Outlook and Strategy
Company Outlook and Strategy
Slide 27: Overview of Growth Strategy
OVERVIEW OF GROWTH STRATEGY Significant Whitespace Remains in World Gym Franchise Licenses in Place Additional Growth from Ancillary 1 2 3 Taiwan Fitness Market for Asia Markets Expansion Products and Services Cross-sell Taiwan has a highly attractive fitness market, Markets where the master lic
Slide 28: Organic Growth in Taiwan Capturing Significant Whitespace
ORGANIC GROWTH IN TAIWAN CAPTURING SIGNIFICANT WHITESPACE Significant whitespace remains in Taiwan fitness market, implying a strong growth potential for WGT. Region: Taoyuan, Hsinchu, Miaoli Region: Taipei Metro Area Population: 3.8 million Population: 7.0 million 2028 Fitness Membership Penetratio
Slide 29: Detailed Analysis Remains Fundamental to Our Club Opening
DETAILED ANALYSIS REMAINS FUNDAMENTAL TO OUR CLUB OPENING Nearby Retail Stores Population Age Distribution Fitness Traffic Penetration Convenience Competitor Retail Stores 29
Slide 30: Acquisitions Opportunities and Regional Market Potential
ACQUISITIONS OPPORTUNITES AND REGIONAL MARKET POTENTIAL Additional domestic and international opportunities outside of the current business plan could further accelerate the growth of WGT. Attractive Strategic Rationale Potential Growth Levers Consolidation opportunities in Taiwan as the No.1 player
Slide 31: World Gym Shop
World Gym Shop The World Gym Shop sells a variety of sports items such as sportswear, protein powder, water bottles, gym bags, boxing gloves, and other accessories. Additionally, World Gym Shop energy protein drinks, members can quickly replenish protein within 30-60 minutes after exercise, which ca
Slide 32: Financial Information
Financial Information
Slide 33: Recovering from COVID-19 Impact
RECOVERING FROM COVID-19 IMPACT We suffered the most when the Taiwan government implemented a level-3 alert from May to July 2021, which shut down gym activities nationwide. Our business has since been recovering toward pre-COVID levels. Monthly Dues Per Gym Personal Training Revenue Per Gym (NT$ th
Slide 34: Financial Summary
FINANCIAL SUMMARY NT$mn 2020 2021 2022 2023 Revenue 9,465 7,834 8,863 9,428 Gross Profit 2,217 1,031 1,426 1,551 Operating Expenses (992) (895) (941) (1,040) Operating Profit 1,226 136 486 511 Non Operating Income/(Loss) (954) (64) (122) (67) Pretax Income 272 72 363 444 Tax Expenses (230) (40) (60)
Slide 35: 4Q23 Income Statement
4Q23 Income Statement NT$mn 4Q23 3Q23 4Q22 YoY QoQ Revenue 2,406 2,453 2,237 7.5% -1.9% Gross Profit 403 412 324 24.7% -2.2% Operating Expenses (261) (291) (256) Operating Profit 142 122 67 111.5% 16.6% Non Operating Income/(Loss) (8) (15) (19) Pretax Income 134 106 48 177.4% 25.8% Tax Expenses (29)
Slide 36: 2023 Balance Sheet
2023 Balance Sheet NT$mn 2023/12/31 % 2022/12/31 % Cash and cash equivalents 424 3% 785 4% Current financial assets at amortized cost 637 4% 869 5% Accounts and notes payable 160 1% 133 1% Current Assets 1,367 8% 1,899 11% Property, plant and equipment 5,539 33% 5,749 33% Right of use assets 9,107 5
Slide 37: 2023 Cash Flow
2023 Cash Flow NT$mn 2023 2022 Beginning Balance 785 1,517 Operating Cash Flow 2,383 2,312 Capital Expenditures (878) (1,023) Investments and Others 239 (509) Financing Cash Flow (2,105) (1,512) Ending Balance 424 785 37
Slide 38: Dividend Payout & CAPEX
Dividend Payout & CAPEX 5.78 5.42 5.42 2021 2022 2023 PAYOUT RATIO (%) 1912% 201% 186% DIVIDENT YIELD - - 5.1% (%) CAPEX (NT$ MN) 1,111 1,023 878 CAPEX TO SALES (%) 14% 12% 9% 1. T he Board of Dire c tors ha s a pprove d a 2023 cash dividend of NT$5. 78/share, subject to approval at the upcoming AGM
Slide 39: Appendix
Appendix
Slide 40: Disclaimer
Disclaimer 本簡報的資訊係根據當時之主、客觀因素，對過去、現在及未來之營運彙總與評估；其中含有前瞻性之論述，將受風險、不確定性及推論 所影響，部分將超出我們的控制之外，實際結論可能與這些前瞻性論述大為不同。 簡報中所提供之資訊 (包含對未來的看法)，並未明示或暗示地表達或保證其具有正確性、完整性及可靠性；亦不代表本公司、產業狀況及後 續重大發展之完整論述。 對未來的展望，反應公司截至目前為止之看法。這些若有任何變更或調整時，本公司並不負責隨時提醒及更新。 本簡報及其內容未經本公司書面許可任何第三者不得任意取用。 40
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