Viva Leisure Ltd. · ASX:VVA
Viva Leisure — FY2024 Earnings Presentation
50 slides from Viva Leisure's earnings presentation, Aug 14, 2024
Slide 1: FY2024 Full Year Results Presentation
FY2024 FULL YEAR RESULTS PRESENTATION 14 AUGUST 2024 ASX | VVA
Slide 2: Contents
FY2024 FULL YEAR CONTENTS HIGHLIGHTS 3 FINANCIAL RESULTS 8 CAPITAL ALLOCATION STRATEGY 16 GUIDANCE FY2024 19 STRATEGIC REFURBISHMENT PROGRAM 23 NEW BANKING FACILITIES 27 BUSINESS STRATEGY & OUTLOOK 29 APPENDIX 47
Slide 3: Highlights
FY2024 HIGHLIGHTS
Slide 4: Viva Leisure Reports Another Record Full-Year Profit
VIVA LEISURE REPORTS ANOTHER RECORD FULL-YEAR PROFIT Corporate Membership increased Revenue1 increased by 15.9% to $163.6 million, 10.0% to 200,067, and network driven primarily by strong organic growth membership up 6.5% to 372,354 Record EBITDA2 increased 21.0% to Corporate locations increased by
Slide 5: FY2024 Achievements
FY2024 ACHIEVEMENTS MULTIPLE SIGNIFICANT MILESTONES ACHIEVED ▪ The Hub, and Viva Pay launched across the entire Plus Fitness network in Australia (193 locations) and The Hub & Viva Pay launched New Zealand (2 locations), launching the technology and payment fees division of the business ▪ All 27 loc
Slide 6: Operational Progress Positions Viva For Growth
OPERATIONAL PROGRESS POSITIONS VIVA FOR GROWTH FY2024 HIGHLIGHTS FINANCIAL OPERATIONAL Revenue2 EBITDA2 Members1 Members1 (ex AASB-16) (Owned Locations) (All Locations) $163.6m $35.4m 200,067 372,354 Up 15.9% [FY23: $141.2m] Up 21.0% [FY23: $29.2m] Up 10.0% [FY23: 181,950] Up 8.5% [FY23: 343,325] NP
Slide 7: Financial Snapshot
FINANCIAL SNAPSHOT LOYALTY AND GROWING MEMBERSHIP DRIVING CONSISTENT GROWTH FY2020 REPRESENTS FIRST FULL YEAR AS LISTED COMPANY REVENUE ($M) EBITDA ($M) +15.9% +21.0% 163.6 35.4 CAGR CAGR +41.4% +55.2% 141.2 29.2 84.5 18.8 73.8 15.2 90.8 83.7 11.9 47.8 56.8 5.5 6.3 16.6 40.9 6.1 14.0 79.1 0.5 17.9 6
Slide 8: Financial Results
FINANCIAL RESULTS ASX | VVA FY2024 FULL YEAR RESULTS PRESENTATION 8
Slide 9: Revenue Growth ($M)
REVENUE GROWTH ($M) FULL YEAR REVENUE GROWTH [JUNE 2023 v JUNE 2024] 163.6 0.7 0.9 LEGEND 3.3 0.8 ▪ Pre FY2024 Clubs refers to locations which were operating prior to the +15.9% FY2024 period commencing 16.7 ▪ FY2024 Opened Clubs refers to locations opened during the financial year 141.2 ▪ FY2024 Ac
Slide 10: Member Base Continues To Grow
MEMBER BASE CONTINUES TO GROW INCLUDES CORPORATE & FRANCHISE NETWORK MEMBERS +6.2% 395 6 5% +7.5% 372 HIGHLIGHTS 17% 31% 6 ▪ Membership growth during 346 345 13% FY2024 was ~33,000, 3 4 however this reduced to 336 3 ~18,000 after the removal of 320 15,000 Fitness Passport 34% members. 298 297 389 ▪
Slide 11: Member Growth
MEMBER GROWTH MEMBER GROWTH IN CORPORATE OWNED LOCATIONS NOW OVER 200K +33.7% 223.2 LEGEND ▪ Pre FY2024 Clubs refers to locations which were operating prior to 23.1 the FY2024 period commencing 200.1 ▪ FY2024 Opened Clubs refers to locations 17.2 opened during the financial year 182.0 3.6 ▪ FY2024 A
Slide 12: Utilisation
UTILISATION RECORD UTILISATION ACROSS OWNED PORTFOLIO 72.6% HIGHLIGHTS Long term target is 75-80% average utilisation per location once a location becomes mature (ie: older than 24 months) 70.9% Utilisation refers to Viva estimated maximum capacity per location: • Health Clubs estimate 2.0 members p
Slide 13: Results Reflect Strong Growth
RESULTS REFLECT STRONG GROWTH PROFIT & LOSS FY2024 FY2023 VARIANCE VARIANCE (ex AASB16) (ex AASB16) $ % HIGHLIGHTS ▪ Revenue growth derived Revenue 163.6 141.2 22.4 15.9 mainly from organic growth Operating Costs (128.2) (112.0) (16.3) 14.5 ▪ EBITDA margin EBITDA 35.4 29.2 6.1 21.0 increased to 21.6
Slide 14: Balance Sheet
BALANCE SHEET CONTINUED INVESTMENT IN GROWTH ($m) FY2024 FY2023 Cash 22.3 6.8 Receivables and other Current Assets 5.1 4.4 HIGHLIGHTS P, P & E 63.6 60.0 ▪ Balance sheet strengthened Right of Use Assets 265.3 223.0 by capital raise successfully Intangibles 91.9 74.8 completed in June Deferred Tax 92.
Slide 15: Cash Flows
CASH FLOWS REINVESTMENT IN THE BUSINESS HAS BEEN THE FOCUS OVER THE YEAR ($m) FY2024 FY2023 HIGHLIGHTS Opening cash 6.8 10.1 Cashflows from Operations 59.4 53.1 ▪ Strong cash balance reflected from recent Investment in P,P,E and Intangibles (18.8) (19.2) capital raise with acquisitions still to Acqu
Slide 16: Capital Allocation Strategy
CAPITAL ALLOCATION STRATEGY
Slide 17: Cashflow Analysis
CASHFLOW ANALYSIS INVESTING IN OUR FUTURE CASHFLOW DETAILS ($M) FY2024 FY2023 Net Receipts from Customers / Payments to Suppliers 79.7 67.9 Rent Payments (43.1) (37.3) HIGHLIGHTS Net Interest on Senior Facility (2.6) (1.9) Debt Repayments (ex Property Leases) (14.4) (11.6) ▪ Strong growth in FCF pre
Slide 18: Capex Analysis
CAPEX ANALYSIS FY2024 CAPEX SUMMARY FOR PERIOD $M % OF REVENUE New Site Capex 5.9 3.6% COMMENTS ▪ Site Upgrade capex is the Site Upgrade Capex 7.3 4.5% gross amount spent on the refurbishment program Technology Capex 5.0 3.1% ▪ Funding was made available in H2 for the refurbishment program Total Exp
Slide 19: Guidance FY2024
GUIDANCE FY2024
Slide 20: FY2024 Guidance Milestones Achieved
FY2024 GUIDANCE MILESTONES ACHIEVED A YEAR OF CONSOLIDATION AND GROWTH FINANCIAL HIGHLIGHTS Revenue Guidance issued in February 2024 FY2024 achieved, notwithstanding difficult trading environment for various $163.6m industries. Guidance: $162m to $164m Target EBITDA margin in the range of 21% to 22%
Slide 21: Q4-FY2024 Run Rates
Q4-FY2024 RUN RATES A STRONG BASE ESTABLISHED FOR FY2025 Revenue Actual EBITDA Actual EBITDA Margin Actual Q4-FY2024 Q4-FY2024 Q4-FY2024 $43.2m $9.8m 22.7% Guidance Q4-FY2024: $42.5m to $43.5m Guidance Q4-FY2024: $9.5m to $10.0m Guidance Q4-FY2024: 22% to 23% COMMENTS Annualised, based on Q4-FY2024
Slide 22: FY2025 Upside Opportunities
FY2025 UPSIDE OPPORTUNITIES FY2024 HAS PROVIDED A STRONG PLATFORM FOR FURTHER UPSIDE IN FY2025 Opportunities include: Membership Growth, including greenfield locations, maturation Plus Fitness division continued franchisee site upgrades and of locations opened in FY2024, and possibly future roll-out
Slide 23: FY2024 Strategic Refurbishment Program
FY2024 STRATEGIC REFURBISHMENT PROGRAM
Slide 24: FY2024 Strategic Refurbishment Program
FY2024 STRATEGIC REFURBISHMENT PROGRAM ANNOUNCED IN AUGUST 2023 AND COMPLETED DURING FY2024 HIGHLIGHTS Estimated Actual The FY2024 Strategic Refurbishment program has achieved its targets ahead of management expectations Locations 27 27 Membership has increased for the strategically refurbished loca
Slide 25: Case Study: Strategic Refurbishment Locations
CASE STUDY: STRATEGIC REFURBISHMENT LOCATIONS PERFORMANCE FROM REFURB DATE TO TODAY Site Re-open Date Cash Cost of Refurb ($) Members at Re-open Members (1 Aug 2024) Approx ROI Site 1 (QLD) Nov-23 570,000 749 1,106 36.9% Site 2 (VIC) Feb-24 670,000 1,288 1,801 65.2% Site 3 (QLD) May-24 517,000 1,202
Slide 26: Club Lime Noosaville
CLUB LIME NOOSAVILLE BEFORE AND AFTER PHOTOS FROM STRATEGIC REFURBISHMENT PROGRAM +900 members in first 3 months Group Fitness removed providing more gym floor ASX | VVA FY2024 FULL YEAR RESULTS PRESENTATION 26
Slide 27: New Banking Facilities
NEW BANKING FACILTIIES COMMONWEALTH BANK
Slide 28: New Banking Facilities
NEW BANKING FACILTIES UNLOCKING SIGNIFICANT FREE CASH FLOW Key Facility Terms: An increase from a combined $118 million to $165 million The Facilities are to be syndicated, with Commonwealth Bank facility, plus a $50 million accordion facility acting as the Agent ▪ Facility A is a $130 million Revol
Slide 29: Business Strategy & Outlook
BUSINESS STRATEGY & OUTLOOK
Slide 30: Building A National Platform
BUILDING A NATIONAL PLATFORM FROM HUMBLE BEGINNINGS IN ONE STATE/TERRITORY TO NOW COVERING SIX 185 Locations* HIGHLIGHTS 4 National platform provides basis to serve a larger 32 addressable market and extract operating efficiencies. 22 ▪ Large addressable market ▪ Improved procurement ▪ Talent acquis
Slide 31: Competitive Landscape
COMPETITIVE LANDSCAPE SIGNIFICANT OPERATOR IN THE MARKET 566 Viva Leisure now owns and operates the second-largest network in Australia (353) and with a total of 185 corporate locations this also positions the company as the nation’s second-largest owner in the industry. 353 Diagram represents ~50%
Slide 32: IHRSA 2023 Global Report
IHRSA 2023 GLOBAL REPORT Number of Members Number of Locations Rank Brand HQ Members (‘000) Rank Brand HQ Locations 1 Planet Fitness USA 17,000 1 Anytime Fitness USA 5,143 2 HiLeFit China 10,000 2 Xponential Fitness USA 2,641 3 Anytime Fitness USA 3,900 3 Planet Fitness USA 2,410 4 Smart Fit Brazil
Slide 33: ARPM, Utilisation, Inflation & Interest Rates
ARPM, UTILISATION, INFLATION & INTEREST RATES THE ROBUST FITNESS INDUSTRY +19.4% 8.0 17.0 $16.65 16.5 Highlights 7.5 $16.13 7.0 16.0 ▪ Utilisation (members in each club) increased $15.57 $15.67 $15.42 $15.40 15.5 over the quarters from 67.4% to 72.6% 6.5 $15.26 15.0 6.0 $14.44 14.5 ▪ ARPM (Average R
Slide 34: Member Growth
MEMBER GROWTH WHERE OUR MEMBER GROWTH COMES FROM? Source of New Members Annual Growth Profile +18.3% +10.0% 100.0% 100.0% 100.0% 215.0 17.2 15.0 13.3% 200.0 +13.9% 34.4% 16.0 37.4% 181.7 14.1% 11.4 +26.7% 159.6 10.7 14.2% 10.8% 24.4 72.6% 126.0 9.2 51.4% 51.8% 2022 2023 2024 2022 Organic Acquired 20
Slide 35: Plus Fitness Franchise Network
PLUS FITNESS FRANCHISE NETWORK GOING FROM STRENGTH TO STRENGTH IMPRESSIVE GROWTH Current Network: 205 Locations New Territories Secured Total Territories Secured 195 2 8 21 30 Australia New Zealand India Between July 2023 and June 2024 Pre-DA, In DA, In Build or Pre-Opening Locations in new design N
Slide 36: Our Strategy
OUR STRATEGY 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 Anticipating t
Slide 37: The Hub And Viva Pay
THE HUB AND VIVA PAY TECHNOLOGY UPDATE CAPITALISING ON OUR TECH LARGEST INVESTMENT IN IT WENT LIVE IN FY2024: 100% of franchised network operating from the Hub and Viva Pay. Technology Fees, and Payment processing fees now being received. New technology products and modules nearing launch, which wil
Slide 38: Capitalising On Our Tech Platform
CAPITALISING ON OUR TECH PLATFORM OUR FULLY INTEGRATED SOLUTION IS ONLY GOING TO GET BETTER CAPITALISING ON OUR TECH PLATFORM DELIVERING EXCEPTIONAL SERVICE New Modules New Products New modules being developed will replace New products using the Hub as a backbone to third-party products used by Viva
Slide 39: Supp Society
SUPP SOCIETY LAUNCHING NEXT WEEK DIVERSIFYING OUR INCOME STREAMS FOCUSED ON OUR MEMBERS: Marketed directly to our network of ~400,000 members Using existing technology including digital signage, SMS, mail-outs, in-club advertising offers and in-app promotions Drop-ship arrangement with one of the la
Slide 40: Portfolio Of Brands
PORTFOLIO OF BRANDS A Multi-dimensional Fitness Business That Operates In All Segments Of The Fitness Market. Fitness Segments: In addition Boutiques Express Viva Labs Viva Pay Digital Standard Big Box The Hub Signage Franchise HVLP Online Supplements ASX ASX||VVA VVA FY2024 FULL YEAR RESULTS PRESEN
Slide 41: Zoo Fitness – Our HVLP Offering
ZOO FITNESS – OUR HVLP OFFERING CONTINUING TO SERVICE ALL SEGMENTS OF THE MARKET Key Points Opportunity Viva’s buying power on equipment will ensure a better member HVLP (High Value, Low Price) still in its infancy in Australia experience, with better equipment at an attractive price point Limited l
Slide 42: Zoo Fitness – Our HVLP Offering
ZOO FITNESS – OUR HVLP OFFERING <$10 $14-$19 $14-$27 $40+ ASX | VVA FY2024 FULL YEAR RESULTS PRESENTATION 42
Slide 43: ASX | VVA FY2024 FULL YEAR RESULTS PRESENTATION
ASX | VVA FY2024 FULL YEAR RESULTS PRESENTATION 43
Slide 44: ASX | VVA FY2024 FULL YEAR RESULTS PRESENTATION
ASX | VVA FY2024 FULL YEAR RESULTS PRESENTATION 44
Slide 45: ASX | VVA FY2024 FULL YEAR RESULTS PRESENTATION
ASX | VVA FY2024 FULL YEAR RESULTS PRESENTATION 45
Slide 46: Contact Us
CONTACT US Email: investor.relations@vivaleisure.com.au Harry Konstantinou CEO & Managing Director Kym Gallagher CFO ASX | VVA
Slide 47: Appendix
APPENDIX
Slide 48: Viva's Expanding Portfolio
VIVA’S EXPANDING PORTFOLIO TARGETING ALL SEGMENTS REBALANCE CLUB LIME CLUB LIME HIIT REPUBLIC PLUS FITNESS GROUNDUP PSYCLE LIFE PILATES & YOGA AQUATICS SEGMENT Health Clubs Boutique Health Clubs Boutique Boutique Boutique Aquatics High quality facilities, Medium quality High quality facilities, Low
Slide 49: Statutory Reconciliation & Normalisations
STATUTORY RECONCILIATION & NORMALISATIONS UNDERLYING & AASB16 FOR FY2024 FY2024 AASB16 FY2024 COMMENTS ($M) ▪ Removal of amortisation of Statutory Adjustments Impact (pre AASB16) Right of Use Asset Revenue 162.6 1.0 - 163.6 ▪ Removal of finance charges against rental liabilities Expenses (87.3) 2.6
Slide 50: 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