Soho House & Co Inc

Good morning. My name is Rob, and I will be your conference operator today. At this time, I would like to welcome everyone to the Membership Collective Group Inc. Fourth Quarter and Full Year 2021 Results Conference Call. All lines have been placed on mute to prevent any background noise. After the speaker's remarks, there will be a question and answer session. If you would like to ask a question during this time, simply press star followed by the number one on your telephone keypad. If you would like to withdraw your question, again, press star 1. Thank you. Greg Feeley, Director of Investor Relations. You may begin your conference.

Some of today's statements may be forward looking and actual results may differ materially due to a number of risks and uncertainties, including those discussed in our most recent quarterly report on Form 10Q filed on November 17th, 2021. Any forward looking statements represent our views only as of today, and we assume no obligation to update any forward looking statements if our views change. By now, you should have access to our fourth quarter and full year financial fiscal 2021 earnings release, which can be found at membershipcollectivegroup.com in the news and events section. Additionally, we have posted our fiscal 2021 earnings presentation, which can also be found in the news and events section on our site. During the call, we refer to certain non-GAAP financial measures. These non-GAAP measures should be considered in addition to and not as a substitute for or in isolation from our GAAP results. Reconciliation to the most comparable gap measures are available in today's earnings press release.

Hello, everyone. I'm Nick Jones, founder and CEO of MCG. I am delighted to welcome you all to the fourth quarter earnings call for the MCG, this time from London. But we'll be in the US next week and we'll be happy to see you all. I'm going to take you through some of the highlights for the fourth quarter and for the year. before handing over to Andrew, our President, for a focus on our core Sowerhouse business and growing membership despite the pandemic and macro headwinds of the last year. Hemera, our CFO, will follow with a detailed overview for the numbers before concluding remarks and opening up any questions. First though, a recap on our value proposition. What makes MCG special? We are the only global membership platform with a proven experience of delivering reoccurring revenues over the last 26 years. Our membership growth is stronger than ever. In fact, we are on track to beat our Q1 year membership target by 25%. We have always had a member-first focus, and this has seen us increase demand for our membership base year on year during 2021. Our waitlist grew even during COVID. Our members were incredibly loyal. Both retention and frozen members are now back to pre-pandemic levels. We have a large, addressable global market. and that will continue with a North American focus to our development plans, alongside our first two houses in Scandinavia and a further house in Asia. We now aim to target opening at least eight to ten new server houses every year and have increased our development pipeline to nine this year. As you know, Q4 was a quarter with its challenges. Business was really strong in October and November, before the new variant disrupted business in December, during what normally is our best time of year. But looking ahead, we are confident that as the world finally emerges from COVID, we can deliver on our plans. The majority of our future houses are an asset-light development model. which means we can expand significantly whilst conserving cash and providing a path forward to generate free cash flow. Of course, MCG is not immune to the continued pressures from rising inflation. But we have countered this by increasing pricing, including our Every House membership, which was last reviewed in 2019. We also see great potential to scale our high margin brands like Soho Home, which our members love because it means they can bring the house home and Soho Connect, which is going to be our digital membership where members will be able to connect with each other globally. This is launching later this year. 2021 was a challenging year for us all due to the various COVID restrictions throughout the year. In fact, We estimate that our houses only operated at approximately 40% capacity, and that was with all the masks and the social distancing which went with it. Combined with the inefficiencies of opening and closing numerous times and staff shortages, it made the year difficult for our teams and members. That said, I believe we delivered a strong set of results. It's hard to believe that our IPO was only eight months ago, raising $388 million to strengthen our balance sheet and the huge effort our team dedicated to achieving this during a pandemic. I really want to thank them a lot. At the end of 2021, MCG had approximately 156,000 members in total across the Americas, UK, Europe and Asia. Our total MCG membership grew by 37,000 during 2021 with 11,000 of those joining in the final quarter and that's despite delaying some December intakes because of the new variant. Our sewer house retention rate has not only remained high but is now back to 2019 levels. 2021 was a record year for all our membership applications from all geographies. With the year end, MCG waitlist is now at over 70,000. The value of a sewer house membership continued to increase as our portfolio expanded with the opening of another six sewer houses, four of which were in new countries for us. Our members love nothing more than new house opening. In 2022, We have increased our development pipeline to nine and have already had a great start to the year with the opening of Nashville, Brighton later this month and Holloway House in West Hollywood in April. Our members love products associated with Soho House and this leads to a higher spend per member of costs. Our complementary businesses such as Soho Home and Soho Works which grew significantly last year. We saw strong year-on-year EBITDA improvement during the quarter and full year and believe this improving momentum will continue. A little more detail on the exciting openings for 2022. Nashville, which opened last month, is centered around local art and live entertainment. They love music there. Featuring 47 bedrooms, indoor and outdoor performance spaces, a large swimming pool, Screening Room, Asoa Health Club and our first ever Club Chaconis. We have welcomed over a thousand new members since opening and our wait list increasing every week. It's going to be one of the best houses. Brighton Beach House on the south coast of the UK is located in one of the most creative, progressive cities. So it seemed like a natural step to open a house there. Our membership applications are incredible and are very, very strong. Holloway House in West Hollywood will follow shortly afterwards. It has 34 bedrooms, which our West Coast members and people who visit the West Coast have been asking for for a while. We'll host several Oscar parties and other private events at the end of March before fully opening to members in April. For the remainder of 2022, we have houses opening in London, Miami, Stockholm, Copenhagen, Mexico City and Bangkok to reach the nine I've just mentioned, and we'll update you each quarter on our progress. We plan to open our second Scorpio site in Tulum in Mexico towards the end of this year, as well as the NED Nomad in New York, expected to open in the summer of 2022. This growth is what MCG is all about, continually increasing the value of our memberships by adding new access and experiences for all our members. And with that, I will hand over to Andrew.