Basic-Fit N V Ord

Hello and welcome to the Basic Fit 2024 half-year results conference call and webcast. Please note that today's conference is being recorded and for the duration of the call, your lines will be on listen only. However, you'll have the opportunity to ask questions at the end of the call. If you require assistance at any point, please press star zero and you'll be connected to an operator. I will now turn the call over to your host for today's conference, Richard Picard, Head of Investor Relations. Sir, you may begin.

Well, thank you, François, and good afternoon and welcome to our conference call, everyone, during which we will discuss our results over the first half of 2024. With me today are René, our CEO and CFO, Hans van der Aar. This call is being broadcast live on our website and a recording of the call will be available shortly afterwards. As usual, I would like to point out that safe harbor applies. We will start with René, who will discuss the highlights and the operational developments, followed by a more detailed look at the financial results from Hans. After these prepared remarks, we will open the call for questions. Also, the call will finish no later than 3 o'clock, and with that, René, I would like to hand over to you.

Thank you, Richard, and welcome everyone for joining today's call. We achieved a strong set of results in the first half of the year. a period in which there were still macroeconomic and geopolitical challenges. During the first six months, we expanded our club network to 1,537 clubs and our membership base to 4.1 million. Compared to a year ago, our revenue increased by 17% to 584 million euro, and thanks to a larger base of mature clubs in our network, In combination with an increased focus on overhead costs, we could increase our underlying EBITDA less rent at a faster pace of 26% to 139 million euro. Let's go to the next slide on club openings. In the first half of the year, we grew our club network by a record of 135 clubs. Year on year, this represents a growth of 234 clubs, or 18%. With the four-year guidance of our network growth to around 1,575 clubs, we will open a more limited number of clubs in the second half of the year. In 2023, the growth of our network was more evenly spread across the first and the second half of the year. This year, the net growth of our network in the first six months is 78% based on the four-year guidance. Our Spanish network recorded the highest net growth of 62 clubs, or 45%, reaching 201 clubs. I will provide more details about Spain and the integration of the RSG Spain clubs on the next slide. In France, we added 53 clubs to our network, reaching a total of 834 clubs. Compared to a year ago, our French network increased by 116 clubs. which is an increase of 16%. In our newest growth market, Germany, we opened 12 clubs, increasing our German presence to a total of 24 clubs. Compared to a year ago, our German network has grown by 18 clubs. What we observe is that the clubs in Germany that we have opened in 2024 are showing stronger growth trends after opening compared to the clubs we opened last year. Although it is still early days and we still have limited brand equity in the region where we operate, I believe that a stronger trend is the result of applying our learnings and increased brand awareness. One does not make an impact in a local market with just one club. But once people see that you are becoming a logical and affordable choice, thanks to our cluster strategy, Trends will improve. In the first half of this year, we opened our first club in Berlin, Frankfurt, and second club in Bremen and Cologne. Lastly, our Benelux club network increased by eight clubs, with four opening in the Netherlands and four in Belgium. Let's go to the next slide about the RSG Spain integration. Last December, we announced the exciting news that we reached an agreement with the RSG Group for the acquisition of RSG Spain. At the end of March, we announced the finalization of the acquisition, and more recently, we finalized the sale of the five Holmes Place clubs that were part of the original 47 club deal. This means that on balance, we have acquired 42 McFit clubs. Nearly all of these clubs will be rebranded and refurbished as a basic fit club. by the start of the important sales season in September. On the slide, you can see where the 42 clubs are located. We have a regional approach when it comes to conversion, and we are well underway in the Madrid and Barcelona clusters. At the moment, at the end of July, we have already successfully converted 19 clubs, and four clubs are currently in the process of being converted. On the next slide, You can see some pictures of a few recently converted McFit clubs. Our team in Spain is doing a remarkable job with regard to the pace and efficiency of the conversion process. As you can see on this slide, these clubs look like brand new BasicFit clubs and are a good and welcome addition to the BasicFit network in Spain. Let's move to the next slide on membership growth. In the first half of the year, we increased our membership base by almost 300,000 to 4.1 million. Compared to a year ago, our membership base increased by almost half a million members, or 13%. We recorded membership growth in all our countries, with the strongest performance in the Benelux countries and Spain. In Germany, as I explained in a previous slide, we see a gradually improving membership growth trend. notably with the newer clubs as we continue to build brand equity. Market condition in France remained somewhat challenging during the first half of the year. The second quarter, however, showed some improving growth trends in France. In our Q1 trading update, we announced the implementation of new management structure in France, in which we separated the responsibilities for club expansion and club operations. We have also divided the country in separate regions, with each region being overseen by its own dedicated business manager. To further improve the membership experience, we continue to invest in the quality of the clubs, including the offering of massage chairs and longer opening hours, which we are currently testing in different clubs and in different regions. The uptake of the premium membership by joiners remained around 50%. Premium membership accounted for 43% of our total membership base at the end of the first half. Note that our total membership base, including the new RSG Spain members, who do not have a premium membership, excluding these new members, the penetration rate would have been 44%. Although we are only about halfway the conversion of all McFIT clubs in Spain, so far membership trends post conversion are better than we expected. Let's go to my last slide before I hand it over to Hans. As we have explained at the time of our full year 2023 result, in our club rollout plans for 2024, we have taken into account the cash flow and macro developments. With year-to-date 143 net openings today, we now operate a network of 1,545 clubs. As I explained before, our club network growth is screwed towards the first half of this year. This automatically means that a more limited number of openings are planned for the second half of the year. With that in mind, we confirm our club growth target for 2024 to around 1,575 clubs compared to 1,402 clubs at the start of the year. For the full year, we expect the average CAPEX for a newly built club to increase slightly to around 1.25 million euro from 1.18 million euro in 2023. The small increase reflects a combination of modest cost inflation and fewer regional club openings in France than in 2023. This concludes my part of the presentation. I now hand it over to Hans for the financial review.