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. First Quarter 2022 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, just press star one. Thank you. Greg Feely, Director of Investor Relations. You may begin your conference.

Thank you for joining us today to discuss the Membership Collective Group's first quarter 2022 financial results. 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 annual report on Form 10-K filed on March 16th. 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 first quarter 2022 earnings release, which can be found at membershipcollectivegroup.com in the News and Events section. Additionally, we've posted our Q1 2022 earnings presentation, which can also be found in the News and Events section on our site. During the call, we also refer to certain non-GAAP financial measures, These non-GAAP measures should be considered in addition to and not a substitute for or in isolation from our GAAP results. Reconciliations of the most comparable GAAP measures are available in today's earnings press release.

Hello, everyone, and welcome to the MCG Q1 2022 earnings presentation. My name is Nick Jones. I'm the CEO and founder of Sowerhouse and the MCG. I want to start by giving you an overview of our Q1 performance. And it's good news. We had a good start to the year. January was problematic because the pandemic was still affecting our house openings. But by the end of January, all our houses were open, apart from in Hong Kong. And we saw a really strong recovery. Our members were very keen to get back to the houses, and they also very much enjoyed the fact that they didn't have to wear masks, there wasn't social distancing and life seemed to be getting back to normal. That was really good to see and our members events were hugely popular with all our members globally and it really felt like for the first time it was back to similar levels of what we were in 2019. We had exceptional membership growth in the quarter with 16,000 new members. The demand for members continues with the MCG waitlist at an all-time high of 79,000. We saw continued growth in recurring membership revenues, up 45% versus Q1 2021, and 12% versus the prior Q4 2021. Pretension remains at pre-COVID-19 levels. We opened Two Sower houses in the quarter and are on track to open nine this fiscal year. I've got to say, the new houses we're opening, they're some of the best we've ever done. They really feel fantastic. I've got to thank our design team for just doing such an amazing job. Our in-house revenue saw strong recovery, up 440% versus Q1 2021. even April this year, was 14% up on 2019 levels, which is very, very positive. We delivered adjusted EBITDA of 2.3 million, which was up 25.1 million versus Q1 2021. And I am excited to announce that today we will be introducing 2022 guidance on the back of the Q1 performance and momentum in Q2. I just want to talk about membership because it's something I wake up every day and think about. What I think about is two things. A, how do I look after our existing members better? And B, how do I add more members? And what really makes our members super happy is when we open new houses in new, exciting cities. And membership is at the center of Sowerhouse, and Sowerhouse is at the center of the MCG. And I've been acquiring and retaining members for 27 years. The more global we get, the more exciting it gets, not just as a membership group of people, but also the different countries add such flavor and interest into our global membership. Recurring membership revenues underpin our business. In Q1 this year, we added 10,000 new members, which is the best we've ever done. Our wait list is sitting at 79,000, which again is the highest it's ever been. And the retention of our members is higher than I've ever known it in 27 years. So naturally, we are very confident we will hit our membership target, which will be 40,000 new Sowerhouse members by the end of the year. We're on track to open nine new Sower houses this year. You know, we've successfully opened Nashville and Brighton in Q1, and we've opened Holloway House, which is in West Hollywood, California, this month. And again, I just want to stress, these are fantastic houses. The new members are so excited about them, and also the existing members who visit them just think, my membership has got better. We're also adding... new houses into four new countries. In the second part of this year, Scandinavia is going to get two, one in Copenhagen and one in Stockholm. Those members globally, when you look at what we have on CWH, which is our Cities Without Houses members, are very, very strong cities. And then later in the year, we're going to Mexico City, and then we're going to Bangkok. And what is happening is So our house membership is becoming truly global with interesting members. Just a little bit more about Cities Without Houses, because Cities Without Houses is what it says on the tin. It's a city where we don't have a house, but we have a membership base. And currently, we are in 72 cities where we have membership representation, we have membership committees, and we have members. And within those cities, we put members events on and those members travel to cities where there are houses and use them. But also what they do is really show us that the city they live in really requires a physical house and they help us find that physical house. They help us find the local developing partner and they are incredibly loyal to the house when it opens. Our new houses and the ones I've just spoken about, they're all in interesting buildings. They're all what I believe are fantastic spaces. And they're on our asset light model where the local developer pays for everything. Each one has a local design feel because it's for the local membership. The design inspiration always comes from the building and the city. And that also runs through into everything we do on our houses. There's a global opinion, but a local decision. And our houses work on our houses being super successful with the local members. And we offer a home away from home for our global members. When our global members visit these cities, they don't want to visit a house which feels like it was designed for every city in the world. They want to visit a house which feels like local to the city they're visiting. And I'm incredibly confident that our pipeline of between 8 and 10 sewer houses per year is achievable. And this gets us to 85 houses by 2027. Our members will love that. I'm also very excited about other openings within the MCG portfolio. We got the NED opening in New York for the first time. Members have been asked, London members, New York members have been asking when are NEDs coming there for a very long time. And the early uptake of membership is super impressive. And we got exciting plans for the future for the NED.