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. Second Quarter 2022 Financial 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 the star one. Thank you. Thomas Allen, Chief Financial Officer, you may begin your conference.

Thank you for joining us today to discuss the Membership Collective Group's second 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 quarterly report on Form 10Q filed on May 18, 2022. Any forward-looking statements represent our views only as of today, and we assume no obligations to update any forward-looking statements if our views change. By now, you should have access to our second quarter 2022 earnings release, which can be found at membershipcollectivegroup.com in the news and events section. Additionally, we have posted our second quarter 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 as a substitute for or in isolation from our GAAP results. Reconciliation to the most comparable GAAP measures are available in today's earnings press release. With that, I'll remind everyone that during our last earnings call, we highlighted our six strategic priorities. They are, first, global expansion of Soho House, Second, enhancing the value of our Soho House membership. Third, House Foundations, our ESG platform. Fourth, operational excellence while delivering profits and free cash flow. Fifth, growing new membership brands and profit streams. And sixth, driving a great digital experience. I will now pass on to Nick Jones, our founder and CEO, to discuss how we progress against the first three pillars, Then Andrew Carney, our president, will discuss the next three before I get into results and guidance.

Good morning, and thank you very much for joining us today. I'd like to welcome Thomas to the team. Excited to have you on board, and we're very pleased to be reporting another good quarter of growth in a very complicated operating environment. But let's start with the expansion of the sewer houses. As you know, we talked about nine new solar houses this year, and we are on track to deliver that. So far, we have opened five. The first one we opened was Nashville in North America. Very strong membership demand, I'm really pleased to say. We've already got around 2,000 members. We then opened the Brighton Beach House. It's our first ever sewer house on the coast in Britain. Brighton is a very creative city and already a lot of our members live there. We then opened Holloway House, which is in West Hollywood, California. It's our fourth site in LA. The reason why we opened it is that our members from all around the world kept saying they wanted rooms in West Hollywood, and we've been able to deliver them, and there's been a great response to them. Back in July, we opened Sewer House Copenhagen, which is our first house in Scandinavia. An incredibly exciting market for us. It's such a great city, Copenhagen, full of great people, and the membership applications are really flying in. Also in July, we opened Little House in Ballam. I can see you all going, where's Ballam? Well, Ballam is in South London. And the reason why we opened a Little House in Ballam is a lot of our members live in the area. And this was in response to a lot of people sort of working from home more and us wanting to just do what our members wanted. And we expect to expand more into local neighbourhoods in the future. The four remaining houses to open this year are the Miami Pool House. We already have the Beach House in Miami, which is one of our top performing houses. We have a huge amount of demand as more and more people have moved down to Miami since the pandemic. It's located in a great creative neighborhood. So we're really excited about that opening. And also we have our second house in Scandinavia opening towards the end of the year in Stockholm. We already have a huge amount of Cities Without Houses members and it's in a converted church. Towards the end of the year we're opening in Mexico City, a really exciting time for us because this is our first house in Latin America. It's in a great building, an old general's house. And it's going to be a big club with a swimming pool and pool house. And we are very excited to be entering that market. And then right at the end of the year, we're opening Bangkok. This is further expansion for us into Asia. Incredibly vibrant city and excited to keep making our membership global. CWH, Cities Without Houses, is... really key for us to support our new pipeline of houses. We have added another 10 new cities as part of our CWH program this quarter, including Nairobi, Manila, and San Diego. And we're even more confident about our international growth in the future with this program. Next, I want to talk about enhancing membership value, something I and the team wake up every morning and think, how can we make life better for our members? Because membership is at the heart of what we do. We know our members love new houses, and they grow the value and demand of their membership. They're so pleased of all the new openings that we've done this year. And all our new houses have seen a very strong membership demand locally from the start. We also love putting on great experiences outside our houses for our members. For instance, this year we had the regular Soho House Festival in West London and also we did the Soho Desert House at Coachella and our members loved seeing the houses out on the road. All of this added 11,000 new Soho House members since the last quarter. And we now have 142,000 members. And we're on target to hit 160,000 to 165,000, which will be fantastic. And also the thing which I'm super proud of is our retention. And that remained at around 95%, despite obviously the concerns of a tougher economic environment and increases in our membership fees. Finally, I want to talk about House Foundations. We published our first ESG report in May, and we're making good progress in line with our targets. With our environmental goals, we've committed to reducing impact on the planet. We are pleased with the progress we've made on waste reduction. The number of houses now separating food waste has increased by 20%, meeting our 2022 target. Our social programmes are at the heart of what Sewer House is all about. We saw continued growth in our mentorship and fellowship programs, where we can make a real impact by helping people from less privileged backgrounds gain access to the creative industry through our brilliant members. And we have launched both programs in 17 new cities this year. We now support 815 mentees and fellows, which is a 70% increase since the end of last year. I'd love to now pass to Andrew to discuss the other pillars.