Viva Leisure Ltd. · ASX:VVA
Viva Leisure — H1 FY2024 Earnings Presentation
36 slides from Viva Leisure's earnings presentation, Feb 15, 2024
Slide 1: H1 FY2024 Results Presentation
H1 FY2024 RESULTS PRESENTATION 15 FEBRUARY 2024 ASX | VVA
Slide 2: Contents
H1 FY2024 CONTENTS HIGHLIGHTS 3 GUIDANCE 8 FINANCIAL RESULTS 11 CAPITAL ALLOCATION STRATEGY 20 BUSINESS STRATEGY & OUTLOOK 24 APPENDIX 32
Slide 3: Highlights
H1 FY2024 HIGHLIGHTS
Slide 4: Viva Leisure Reports Another Record Half-Year Profit
VIVA LEISURE REPORTS ANOTHER RECORD HALF-YEAR PROFIT Corporate Membership increased+ Revenue increased by 17.3% over PCP to 9.8% from PCP to 180,071, and network $79.1 million, driven primarily by strong organic growth membership up 6.2% from PCP to 345,317 THE OUTSTANDING Record Half-Year EBITDA* i
Slide 5: Operational Progress Positions Viva For Growth
OPERATIONAL PROGRESS POSITIONS VIVA FOR GROWTH H1 FY2024 HIGHLIGHTS FINANCIAL OPERATIONAL Revenue EBITDA* Members1 Members1 (ex AASB-16) (Owned Locations) (All Locations) $79.1m $16.6m 180,071 345,317 Up 17.3% [HY23: $67.4m] Up 18.6% [HY23: $14.0m] Up 9.8% [HY23: 164,011] Up 6.2% [HY23: 325,028] NPA
Slide 6: Financial Snapshot
FINANCIAL SNAPSHOT LOYALTY AND GROWING MEMBERSHIP DRIVING CONSISTENT GROWTH FY2020 REPRESENTS FIRST FULL YEAR AS LISTED COMPANY REVENUE ($M) EBITDA ($M) 141.2 29.2 15.2 73.8 90.8 83.7 11.9 47.8 56.8 5.5 6.3 16.6 40.9 6.1 14.0 79.1 0.5 67.4 9.3 17.9 5.6 5.6 35.9 34.0 23.0 -3.8 FY2020 FY2021 FY2022 FY
Slide 7: H2 FY2024 Outlook And Priorities
H2 FY2024 OUTLOOK AND PRIORITIES H1 FY2024 CONSOLIDATION HAS SET FOUNDATIONS FOR A STRONG H2 KEY FOCUS Location Growth Focus on Profitable Growth Strong early H2 trading Delays in development approvals from Councils The strategic consolidation executed in H1 has Significant net growth in January acr
Slide 8: Guidance FY2024
GUIDANCE FY2024
Slide 9: FY2024 Guidance
FY2024 GUIDANCE A YEAR OF CONSOLIDATION AND GROWTH FINANCIAL HIGHLIGHTS Revenue Range Based on information currently available FY2024 and barring any unforeseen events, Viva Leisure provides this guidance for $162m to $164m the FY2024 year FY2023: $141.2m Target EBITDA margin in the range of 21% to
Slide 10: Q4-FY2024 Forecast Run Rates
Q4-FY2024 FORECAST RUN RATES Based on information currently available and barring any unforeseen events, Viva Leisure provides this run rate guidance for the Q4-FY2024 Revenue Range EBITDA Range EBITDA Margin Range Forecast Quarter 4 Forecast Quarter 4 Forecast Quarter 4 $42.5m to $43.5m $9.5m to $1
Slide 11: Financial Results
FINANCIAL RESULTS ASX | VVA H1 FY2024 RESULTS PRESENTATION 11
Slide 12: Revenue Growth ($M)
REVENUE GROWTH ($M) HALF YEAR REVENUE GROWTH [DECEMBER 2022 v DECEMBER 2023] 79.1 1.7 LEGEND 1.4 ▪ Pre CY2023 Clubs refers to locations which were operating prior to the +17.4% CY2023 period commencing 8.6 ▪ CY2023 Opened Clubs refers to locations opened during the calendar year 67.4 ▪ CY2023 Acquis
Slide 13: Member Base Continues To Grow
MEMBER BASE CONTINUES TO GROW INCLUDES CORPORATE & FRANCHISE NETWORK MEMBERS +3.2% 356 5% 5 346 3 345 HIGHLIGHTS 17% 31% 4 336 3 ▪ ~6,000 net new members 13% added in H1-FY2024 (prior to 320 withdrawal from Fitness Passport program) during a period of consolidation as part of 34% Strategic Review. 2
Slide 14: Member Growth
MEMBER GROWTH MEMBER GROWTH IN CORPORATE OWNED LOCATIONS CONTINUES +12.8% 185.0 LEGEND ▪ Pre CY2023 Clubs 4.9 refers to locations which were operating prior to 180.1 the CY2023 period commencing 7.6 ▪ CY2023 Opened Clubs refers to locations 172.4 opened during the calendar year 5.7 8.4 ▪ CY2023 Acqu
Slide 15: Utilisation
UTILISATION RECORD UTILISATION ACROSS OWNED PORTFOLIO 71.7% HIGHLIGHTS Long term target is 75-80% average utilisation per location once a 70.9% location becomes mature (ie: older than 24 months) Utilisation refers to Viva estimated maximum capacity per location: • Health Clubs estimate 2.0 members p
Slide 16: Results Reflect Strong Growth
RESULTS REFLECT STRONG GROWTH PROFIT & LOSS HY2024 HY2023 VARIANCE VARIANCE (ex AASB16) (ex AASB16) $ % HIGHLIGHTS ▪ Revenue growth derived Revenue 79.1 67.4 11.7 17.3 mainly from organic growth Operating Costs (62.5) (53.4) (9.1) 17.0 ▪ EBITDA margin EBITDA 16.6 14.0 2.6 18.6 increased to 21.0% des
Slide 17: Balance Sheet
BALANCE SHEET CONTINUED INVESTMENT IN GROWTH ($m) HY2024 FY2023 Cash 4.3 6.8 Receivables and other Current Assets 5.8 4.4 HIGHLIGHTS P, P & E 63.0 60.0 ▪ Significant re-investment in Right of Use Assets 233.8 223.0 our portfolio as part of the Intangibles 78.1 74.8 strategic plan Deferred Tax 81.6 7
Slide 18: Cash Flows
CASH FLOWS REINVESTMENT IN THE BUSINESS HAS BEEN THE FOCUS OVER THE YEAR ($m) HY2024 HY2023 HIGHLIGHTS Opening cash 6.8 10.1 Cashflows from Operations 27.7 24.6 ▪ Continued improvement in cash flows from Investment in P,P,E and Intangibles (10.7) (8.2) operations Acquisition of Businesses (1.5) (4.2
Slide 19: Group Margin
GROUP MARGIN LOCATION EBITDA ABOVE 40% ON AVERAGE GROUP MARGIN ($M) HY2024 HY2023 PCP GROWTH Revenue 79.1 67.4 17.3% LEGEND Expenses (Incl Rent) 45.5 38.8 17.4% ▪ Location EBITDA margin maintained above 40% Location EBITDA 33.6 28.6 17.3% Location EBITDA Margin 42.4% 42.4% - ▪ Reduction of corporate
Slide 20: Capital Allocation Strategy
CAPITAL ALLOCATION STRATEGY
Slide 21: Cashflow Analysis
CASHFLOW ANALYSIS INVESTING IN OUR FUTURE CASHFLOW DETAILS ($M) HY2024 HY2023 EBITDA (Pre-AASB16) 16.6 14.0 HIGHLIGHTS Debt and Interest Payments (Ex Property) (7.7) (6.6) Maintenance CAPEX (2.2) (2.0) ▪ Conversion of EBITDA to FCF consistent with Free Cash Flow (FCF) before Tax 6.7 5.4 previous per
Slide 22: Capex Analysis
CAPEX ANALYSIS HY2024 CAPEX SUMMARY FOR PERIOD $M % OF REVENUE COMMENTS New Site Capex 2.8 3.5% ▪ New site capex is Greenfield sites Site Upgrade Capex 3.4 4.4% ▪ Site upgrade capex is for significant one-off works of existing clubs identified to offer upside opportunity Total Expansionary Capex 6.2
Slide 23: Capital Allocation Principles
CAPITAL ALLOCATION PRINCIPLES RE-INVESTMENT GROWTH LEVERAGE Maintenance Capex Investment Leverage of into greenfield Target ~3% locations & 1.25x to 1.75x of revenue (Senior Debt + Equipment acquisitions Finance)/EBITDA Tech Capex Target Debt Facilities Target ~3% 24+ sites pa ~$27m of revenue Undra
Slide 24: Business Strategy & Outlook
BUSINESS STRATEGY & OUTLOOK
Slide 25: Strategic Review
STRATEGIC REVIEW VIVA’S PRIMARY OBJECTIVE IS TO PROVIDE AN IMPROVING RETURN TO SHAREHOLDERS This is achieved over the short and long-term by: Delivering Diversifying Capitalising on Our Portfolio of exceptional our income our tech Team Brands service & products streams Commercialising our Anticipati
Slide 26: FY2024 Update
FY2024 UPDATE THE UPGRADE AND REFURBISHMENT PROGRAM WAS THE FOCUS IN H1 12 Month 12 Month Additional Locations Target Cash Cost Member Member Growth EBITDA identified ROIC Increase Target % Target Target 27 $7.5m 5,200 19.4% $6.0m 80% 1,800 $2.0m Actual to Date 17 $3.4m achieved achieved PROGRESS UP
Slide 27: H2 Focused Strategic Growth
H2 FOCUSED STRATEGIC GROWTH H1 FOCUS WAS ON ACCELERATED REFURBISHMENTS AND REPURPOSING LOCATIONS 169 OPERATING LOCATIONS 10-15 Acquisitions (Locations) 21 New Greenfield locations secured 35 Under negotiation for lease Management anticipates completion Focus on Club Lime and GroundUp for New greenfi
Slide 28: The Hub And Viva Pay
THE HUB AND VIVA PAY TECHNOLOGY UPDATE LARGEST INVESTMENT IN IT UPGRADE NEARING GO-LIVE: Approximately 10% of locations now operating using the Hub and Viva Pay. Full deployment expected by Q4-FY2024 100% of Plus Fitness locations now utilising Viva Labs door controllers (deployed 300+ Viva built do
Slide 29: Plus Fitness Franchise Network
PLUS FITNESS FRANCHISE NETWORK GOING FROM STRENGTH TO STRENGTH IMPRESSIVE GROWTH Current Network: 204 Locations New Territories Secured Total Territories Secured 194 2 8 12 23 Australia New Zealand India Between July 2023 and February 2024 Pre-DA, In DA, In Build or Pre-Opening Locations in new desi
Slide 30: Contact Us
CONTACT US Email: investor.relations@vivaleisure.com.au Harry Konstantinou CEO & Managing Director Kym Gallagher CFO ASX | VVA
Slide 31: Appendix
APPENDIX
Slide 32: Viva's Expanding Portfolio
VIVA’S EXPANDING PORTFOLIO TARGETING ALL SEGMENTS REBALANCE CLUB LIME CLUB LIME HIIT REPUBLIC PLUS FITNESS GROUNDUP PSYCLE LIFE PILATES & YOGA AQUATICS SEGMENT Health Clubs Boutique Health Clubs Boutique Boutique Boutique Aquatics High quality facilities, Medium quality High quality facilities, Low
Slide 33: Fitness Passport Program
FITNESS PASSPORT PROGRAM CORPORATE MEMBERSHIP PROGRAM LOCATIONS DIRECT DIRECT LOCATIONS LOCATIONS MEMBERS PREVIOUS ARPM OFFERING MEMBERS MEMBERS ARPM CANCELLED REMAINING CANCELLED PER WEEK PROGRAM SIGNED UP PER WEEK 21 14 7 8,395 871 ~$2.80 $15.29 COMMENTS: BENEFITS ▪ The Fitness Passport corporate
Slide 34: Projects Being Delivered In FY2024
PROJECTS BEING DELIVERED IN FY2024 POTENTIAL ANNUAL EXPECTED PROJECT CONTRIBUTION ($M) COMMENCEMENT DATE COMMENTS ▪ Financial contributions expected to range 0.3 Q3-FY2024 Digital Signage across FY2024, with ON TARGET COMMENCED full contribution’s expected in FY2025 Q3-FY2024 ▪ Viva Hub and Viva Pay
Slide 35: Statutory Reconciliation & Normalisations
STATUTORY RECONCILIATION & NORMALISATIONS UNDERLYING & AASB16 FOR HY2024 HY2024 AASB16 HY2024 COMMENTS ($M) ▪ Removal of amortisation of Statutory Impact (pre AASB16) Right of Use Asset Revenue 79.1 0.0 79.1 ▪ Removal of finance charges against rental liabilities Expenses (42.4) (20.1) (62.5) EBITDA
Slide 36: Important Notice And Disclaimer
IMPORTANT NOTICE AND DISCLAIMER Future performance Important information This presentation may contain certain ‘forward-looking statements’. Forward-looking statements include those The information in this presentation is general in nature and does not purport to be complete. It has been prepared by