SPEAKER: REDOUANE ZEKKRI DATE: 09 / 11 / 2017
2004 THE START Redouane ZEKKRI MOTIVATION 2
2008 22 CLUBS 22 clubs in Belgium 3
2010 66 CLUBS +26 CLUBS 40 clubs in Belgium 4
2011 CONVERSIONS OF THE LESS PROFITABLE HEALTHCITY CLUBS 5
2013 1 TEAM 1 CONCEPT 6
2014 EXPANSION IN BELGIUM FRANCE AS NEXT FOCUS 7
2015 EXPANSION IN BELGIUM + START IN FRANCE 8
2016 EXPANSION IN FRANCE & NATIONAL COVERAGE IN BELGIUM 9
REDOUANE ZEKKRI International Strategy & Expansion Director / Managing Director France 2017 : 174 clubs in BeLux & 135 clubs in France More than 80 conversions made More than 250 clubs opened This was just the warm up Let s now see together how we will reach 600 clubs in France in the near future 10
AGENDA Expansion strategy Expansion process: what allows us to open 80 clubs in France per year? How is Basic-Fit increasing the fitness penetration? Competition: our competitive position Results Conclusion 11
STRATEGY FOR FRANCE Highly fragmented franchise focused fitness market. 65.000.000 inhabitants 8% fitness penetration rate is a great opportunity Expansion based on new openings and not acquisitions Plan & strategy were needed 12
EXPANSION STRATEGY Cities with more than 30.000 inhabitants Ile-de-France Region (excluding Paris) Paris Cities with less than 30.000 inhabitants (regional clubs)
EXPANSION STRATEGY REGIONS IN FRANCE Identifying all cities with more than 30K inhabitants is just a starting point to find out where we should go Detailed demographic analysis, ROI s & potential are analysed by our Business Control department. 14
EXPANSION STRATEGY NORD-PAS-DE-CALAIS Dunkerque Calais Tourcoing Boulogne-sur-Mer Roncq Wattrelos Marcq-en-Baroeul Roubaix Lille Villeneuve d Ascq Lens Noyelles-Godault Douai Arras Valenciennes Cambrai Maubeuge 26 CLUBS 15
EXPANSION STRATEGY NORD-PAS-DE-CALAIS : 26 CLUBS Club opened or contract signed Location in negotiation Still looking for a good location 1. Lille 185.000 inh. 2. Roubaix 97.000 inh. 3. Tourcoing 94.000 inh. Dunkerque Calais Tourcoing Boulogne-sur-Mer Roncq Wattrelos Marcq-en-Baroeul Roubaix Lille Villeneuve d Ascq Lens Noyelles-Godault Douai Arras Valenciennes Cambrai Maubeuge 4. Calais 77.000 inh. 5. Dunkerque 71.000 inh. 6. Villeneuve-d Ascq 65.000 inh. 7. Boulogne-sur-Mer 45.000 inh. 8. Douai 43.000 inh. 9. Wattrelos 43.000 inh. 10. Valenciennes 41.000 inh. 11. Arras 41.000 inh. 12. Marcq-en-Baroeul 37.000 inh. 13. Lens 36.000 inh. 14. Cambrai 34.000 inh. 15. Maubeuge 34.000 inh. 16
EXPANSION STRATEGY ALL IDENTIFIED CITIES WITH MORE THAN 30.000 INHABITANTS 17
EXPANSION STRATEGY GREEN: CLUB(S) ALREADY OPENED OR LEASE CONTRACT(S) SIGNED 18
EXPANSION STRATEGY RED: LOCATIONS IN NEGOTIATIONS 19
EXPANSION STRATEGY RED: LOCATIONS IN NEGOTIATIONS 20
EXPANSION STRATEGY 332 CLUBS COULD BE OPENED IN CITIES WITH MORE THAN 30K INH. 29 15 4 10 22 15 10 7 10 12 6 16 8 5 6 42 21 15 15 64 21
EXPANSION STRATEGY Cities with more than 30.000 inhabitants Ile-de-France Region (excluding Paris) Paris Cities with less than 30.000 inhabitants (regional clubs)
EXPANSION STRATEGY ILE-DE-FRANCE REGION: 8 DISTRICTS 12.000.000 INHAB. BELGIUM ÎLE-DE-FRANCE 11.300.000 inhabitants 12.000.000 inhabitants KM² 30.528 km² 12.000 km² (2,5x smaller) 370 inhabitants / km² 1.000 inhabitants / km² 23
EXPANSION STRATEGY OUR STRATEGY FOR REGION ILE-DE-FRANCE STEP 2 Val-d Oise STEP 1 YVELINES 1.419.000 inhabitants Yvelines PARIS Hauts-de-Seine Val-de-Marne Essonne Seine-Saint-Denis Seine-et-Marne PARIS 2.295.000 inhabitants HAUTS-DE-SEINE 1.592.000 inhabitants SEINE-SAINT-DENIS 1.552.000 inhabitants VAL-DE-MARNE 1.354.000 inhabitants SEINE-ET-MARNE 1.365.000 inhabitants ESSONNE 1.254.000 inhabitants VAL-D OISE 1.195.000 inhabitants 24
EXPANSION STRATEGY HAUTS-DE-SEINE - 175 km² - 1.592.000 INHABITANTS 21 20 29 34 26 30 33 32 25 31 23 24 22 19 27 28 18 14 16 17 15 13 12 11 9 10 5 8 7 2 35 6 3 1 4 36 1. Antony 2. Châtenay-Malabry 3. Sceaux 4. Bourg-la-Reine 5. Bagneux 6. Fontenay-aux-Roses 7. Le Plessis-Robinson 8. Clamart 9. Châtillon 10. Montrouge 11. Malakoff 12. Vanves 13. Issy-les-Moulineaux 14. Boulogne-Billancourt 15. Meudon 16. Sèvres 17. Chaville 18. Ville-d Avray 19. Saint-Cloud 20. Marnes-la-Coquette 21. Vaucresson 22. Garches 23. Rueil-Malmaison 24. Suresnes 25. Puteaux 26. Nanterre 27. Colombes 28. La Garenne-Colombes 29. Bois-Colombes 30. Courbevoie 31. Neuilly-sur-Seine 32. Levallois-Perret 33. Clichy 34. Asnières-sur-Seine 35. Gennevilliers 36. Villeneuve-la-Garenne 62,000 32,000 20,000 20,000 38,000 23,000 28,000 53,000 33,000 49,000 31,000 27,000 64,000 114,000 45,000 23,000 19,000 11,000 30,000 2,000 9,000 18,000 80,000 49,000 45,000 94,000 77,000 24,000 24,000 85,000 62,000 55,000 60,000 87,000 43,000 25,000 DETAILED MAP PER DISTRICT. 25
EXPANSION STRATEGY Cities with more than 30.000 inhabitants Ile-de-France Region (excluding Paris) Paris Cities with less than 30.000 inhabitants (regional clubs)
EXPANSION STRATEGY Region PARIS : 20 DISTRICTS 2.295.000 INHABITANTS. BRUSSELS PARIS 1.194.000 inhabitants 2.295.000 inhabitants KM² 161 km² 105 km² (35% smaller) 7.416 inhabitants / km² 21.857 inhabitants / km² 27
EXPANSION STRATEGY PARIS 2.295.000 INHABITANTS 1. EXPERIENCE IN THE FRENCH MARKET 2. BRAND RECOGNITION 3. ATTRACTIVE FINANCIAL RESULTS 4. IMPROVED MARKETING STRATEGY DISTRICTS INHABITANTS DISTRICTS INHABITANTS DISTRICTS INHABITANTS DISTRICTS INHABITANTS 1. 75015 2. 75018 3. 75020 4. 75019 5. 75013 237.127 199.519 194.771 185.953 183.713 6. 75017 7. 75016 8. 75011 9. 75012 10. 75014 170.077 166.552 153.461 144.719 140.799 11. 75010 12. 75005 13. 75009 14. 75007 15. 75006 92.494 60.273 59.427 56.325 43.479 16. 75008 17. 75003 18. 75004 19. 75002 20. 75001 39.175 35.666 27.689 21.914 17.165 28
EXPANSION STRATEGY STRATEGY FOR PARIS A lot of traffic A B 4,13M Travelers per day in Paris 364K Travelers per day in Brussels DIFFERENT CULTURE IN FRANCE METRO 2ND Most frequented metro system in Europe 29
EXPANSION STRATEGY DISTRICT 01 DISTRICT 02 METRO - 17 STATIONS METRO 18 STATIONS M 1 5 stations M 8 1 station M 3 5 station M 8 5 stations M 4 3 stations M 11 1 station M 4 3 stations M 9 4 stations M 7 4 stations M 12 1 station M 7 1 station M 14 2 stations RER R A 1 station R B 1 station R D 1 station 30
RESULTS OF 2 TEST CLUBS IN PARIS. AVERAGE MEMBERS +/- 2.500 HIGHER THAN IN THE OTHER CLUBS PARIS TEST 1 Opened in Q4 2015 5.723 members PARIS TEST 2 = GREAT RESULTS (Without brand recognition or big marketing investment) Opened in Q3 2016 6.767 members 31
EXPANSION STRATEGY Cities with more than 30.000 inhabitants Ile-de-France Region (excluding Paris) Paris Cities with less than 30.000 inhabitants (regional clubs)
CLUBS IN CITIES WITH LESS THAN 30.000 INHABITANTS? IN BELGIUM Areas with low population + Very limited fitness offer = Opening clubs the fitness penetration HOME Prospects are willing to travel CLUB up to 8 km or even 12 km to go to shops, cinema, Cities with less than 10.000 inhabitants = More than 3.500 members Apply the same strategy in France HOW TO OPEN REGIONAL CLUBS? LOCAL INTELLIGENCE (Regional coverage ) TECHNOLOGY (Business control analysis) ALREADY TESTED IN 2 CITIES IN FRANCE 33
EXPANSION STRATEGY STEP 4: CITIES WITH LESS THAN 30K INHAB. (REGIONAL CLUBS) X X X X X X X X X X X X X X X X X X X X X X X X 34
EXPANSION STRATEGY NORD-PAS-DE-CALAIS: ONLY 23 % REACHED BY THE WHITESPOTS OF OUR STEP 1. 943.000 Inhabitants reached 3.115.000 Inhabitants not reached 35
EXPANSION STRATEGY WE ONLY REACH 25% OF THE INHABITANTS WITH OUR 332 CLUBS. 12.847.000 38.652.000 Inhabitants reached Inhabitants not reached 36
STRATEGY ALREADY TESTED IN 2 CITIES IN FRANCE TEST 1 TEST 2 Analysis made Analysis made 5.500 INHABITANTS 15.500 INHABITANTS Opened in March 2017 Opened in March 2017 37 3.055 MEMBERS 2.720 MEMBERS
EXPANSION STRATEGY Conclusion & potential for French
EXPANSION STRATEGY CONCLUSION & POTENTIAL FOR FRANCE STEP 1: CITIES WITH MORE THAN 30K INHABITANTS STEP 2: ILE-DE-FRANCE REGION (EXCLUDING PARIS) OPPORTUNITY TO OPEN AT LEAST 600 CLUBS IN FRANCE 39 STEP 3: PARIS STEP 4: CITIES WITH LESS THAN 30K INHABITANTS
EXPANSION PROCESS 15 steps expansion process What allows us to open 80 clubs per year The first 3 steps of our expansion process Our expansion room
OUR EXPANSION PROCESS = 15 STEPS APPLIED IN ALL COUNTRIES 41
EXPANSION PROCESS 15 steps expansion process What allows us to open 80 clubs per year The first 3 steps of our expansion process Our expansion room
WHAT ALLOWS US TO OPEN 80 CLUBS PER YEAR? 1 EXPANSION STRATEGY & COMPETITION ANALYSIS 2 DETAILED WHITE SPOTS ANALYSIS 3 REAL ESTATE AGENTS WE HAVE A CLEAR OBJECTIVE & IMPLEMENTATION STRATEGY DYNAMIC MANAGEMENT APPROACH ENSURES QUICK POSITIONING AROUND NEW OPPORTUNITIES WE KNOW EXACTLY WHAT WE HAVE TO DO AND WHERE IMPORTANT TO DEFINE HOW WE CREATE OUR CLUSTERS OUR APPROACH PROVIDES A DETAILED UNDERSTANDING OF A NEW CITY/REGION WITHIN 2 WEEKS THIS ENSURES OUR EXPANSION MANAGERS ARE ABLE TO RAPIDLY ESTABLISH MARKET PRESENCE 43
EXPANSION PROCESS 15 steps expansion process What allows us to open 80 clubs per year The first 3 steps of our expansion process Our expansion room
EXPANSION PILOT ROOM 45
OUR EXPANSION FOLLOW-UP Our pilot room leads to : Transparency Full pipeline visibility Good Capex control and good cashflow management Great visibility for planning We have good discipline regarding our expansion strategy that ensures us : 46 To grow quickly (speed) To open clubs at the best locations To open clubs that will provide attractive financial results To maintain an efficient level of Capex to reach low breakeven points
FITNESS PENETRATION How is Basic-Fit improving the fitness penetration rate?
HOW IS BASIC-FIT IMPROVING THE FITNESS PENETRATION RATE? 1 OPENING CLUBS IN CITIES WITH LESS THAN 30K INHABITANTS 2 COMPLEMENTARY CUSTOMER PROPOSITIONS TEST 1 5.500 inhabitants Opened in March 2017 3.055 members TEST 2 15.000 inhabitants Opened in March 2017 2.720 members Opening clubs for the 38.000.000 inhabitants living in cities with less than 30K inhabitants is a huge opportunity 2015 30.000 members 2017 400.000 members More than 50% have never been members of a fitness club Customer proposition is complementary : Large clubs (1.500 m²) >< Small clubs Virtual group classes >< Live group classes Cluster strategy & Flexibility (FLEX membership) 48
COMPETITION Low-cost competitors in France & our competitive position. Why are we succesful in France? Our clubs are not impacted by market leaders
CREATION DATE (LOW-COST CHAINS WITH AT LEAST 5 CLUBS) Competitor A Competitor B Competitor C Les Cercles de la Forme Competitor D Gymstreet Competitor E Neoness Competitor F Competitor G Competitor H Competitor I Competitor J Competitor K Competitor L Competitor M Competitor N Basic-Fit 1995 1995 1996 2000 2002 2005 2007 2008 2009 2009 2009 2010 2012 2013 2013 2014 2015 2015 COMPETITOR A & COMPETITOR B 1 COMPETITOR C LES CERCLES DE LA FORME 2 3 50 *No-franchise gyms
NUMBER OF CLUBS (PRESALES CLUBS INCLUDED) Competitor A 320 Competitor B Basic-Fit Competitor C Competitor D Competitor E Competitor F Competitor G Competitor H Competitor I Neoness Competitor J Les Cercles de la Forme Competitor K Competitor L Competitor M Competitor N Gymstreet 165 153 108 92 85 60 50 50 43 29 22 22 17 16 8 7 4 Basic-Fit Neoness Cercles de la Forme Gym Street COMPETITOR A 1 COMPETITOR B 2 Non-franchise low-cost clubs 29 22 4 153 BASIC-FIT 3 80 openings in one year 51 *No-franchise gyms
SIZE OF THE CLUBS Basic-Fit Competitor A Neoness 1.500 m² 1.500 m² 1.500 m² BASIC-FIT COMPETITOR A / NEONESS GYMSTREET / COMPETITOR B Gymstreet Competitor B Les Cercles de la Forme Competitor C Competitor D 1.500 m² 1.500 m² 1.300 m² 1.000 m² 1.000 m² LES CERCLES DE LA FORME 2 1 COMPETITOR C 3 Competitor E 900 m² Competitor F Competitor G 800 m² 700 m² LET S TAKE A LOOK BACK AT THE NUMBER OF CLUBS Competitor H Competitor I Competitor J 700 m² 600 m² 500 m² COMPETITOR J 1 80 openings in one year Competitor K Competitor L Competitor M 500 m² 450 m² 400 m² COMPETITOR M 2 BASIC-FIT 3 Competitor N 300 m² 52 *No-franchise gyms
ADVERTISED MEMBERSHIP FEE Competitor A 4,95 Competitor B 9,95 Neoness 10,00 Competitor C 13,95 Competitor D Competitor E Competitor F 19,90 19,90 19,90 COMPETITOR A 1 Gymstreet Competitor G Competitor H 19,95 19,95 19,95 COMPETITOR B 2 NEONESS 3 Competitor I 19,95 Basic-Fit 19,99 Competitor J 29,90 Competitor K - Competitor L - Competitor M - Les Cercles de la Forme - Competitor N - 53 *No-franchise gyms
ACTUAL MEMBERSHIP FEE Competitor A Competitor B Basic-Fit Neoness Competitor C Competitor D Competitor E 19,90 19,95 19,99 22,00 29,90 29,90 29,90 COMPETITOR A 1 Advertised membership fee = Actual membership fee Competitor F Competitor G Gymstreet 29,90 29,90 29,90 COMPETITOR B 2 BASIC-FIT 3 Competitor H 29,95 Competitor I 29,95 Competitor J 29,95 Competitor K 33,00 Les Cercles de la Forme 35,00 Competitor L 44,00 Competitor M 44,00 Competitor N 49,00 54 *No-franchise gyms
FOLLOWERS ON FACEBOOK (NATIONAL PAGES) Basic-Fit 234K Competitor A 70K Competitor B 42K Competitor C 33K Neoness 27K Competitor D 25K Competitor E 17K Competitor F 14K Competitor G 12K Les Cercles de la Forme 12K Competitor H 11K Competitor I 6,7K Gymstreet 5K Competitor J 4K Competitor K 2,5K Competitor L 1,3K Competitor M - Competitor N - BASIC-FIT 1 COMPETITOR A 2 In a few months, we will have more followers than all other fitness chains together COMPETITOR B 3 55 *No-franchise gyms Some fitness chains work with local pages
COMPETITIVE POSITION OF BASIC-FIT = CREATED IN 2015 153 CLUBS 1.500 M² 19,99 234K followers The most recent fitness company 80 clubs opened in 1 year the biggest clubs in France Only 3 fitness companies are charging less than 20 /month the biggest Facebook community 56
COMPETITION Low-cost competitors in France & our competitive position. Why are we succesful in France? Our clubs are not impacted by market leaders
WHY ARE WE SO SUCCESFUL IN FRANCE? 1 Unique in France (International experience) Historical roll-out of new clubs Replicable model for new markets Unbeatable customer proposition (m2, family pass, GXR, ) OUR ADVANTAGES FACTS ABOUT BASIC-FIT FRANCE Higher average members/club Unique speed Territorial exclusivity is given to the franchisees Improves retention CLUSTER STRATEGY OUR SPECIFICATIONS Uncomplicated: pricing 19,99 / month Execution capabilities: online marketing focus, expansion, Scale Low break-even points : Technology Centralisation Execution capabilities 58
COMPETITION Low-cost competitors in France & our competitive position. Why are we succesful in France? Our clubs are not impacted by market leaders
OUR CLUBS ARE NOT IMPACTED BY MARKET LEADERS WE HAVE A UNIQUE CUSTOMER PROPOSITION CITY INHABITANTS COMPETITION BASIC- FIT MEMBERS CITY 1 60.000 Amazonia + Fitness Park (in the same streets) 3.663 + 3.967 (2 BF clubs opened in August 2015) CITY 2 60.000 Feel Sport (in the same street) 4.110 (BF club opened in December 2015) CITY 3 41.000 L Orange Bleue + Moving Exp (in the same street) 3.896 (BF club opened in December 2015) 60
RESULTS Expansion overview 2014-2017. Average members per club / opening year.
EXPANSION OVERVIEW 2014-2017 NUMBER OF FRENCH CLUBS 153 73 25 10 62 2014 2015 2016 2017 (PRESALES CLUBS INCLUDED)
RESULTS Expansion overview 2014-2017. Average members per club / opening year.
AVERAGE MEMBERS PER CLUB/ OPENING YEAR (Q3 2017) OUR CLUBS REACH MATURITY AFTER 2 YEARS NUMBER OF NEW CLUBS AVERAGE MEMBERS 41 3.875 3.841 3.399 3.123 Higher ramp up than the 2016 clubs 10 15 19 29 2.021 2014 2015 H1 2016 H2 2016 H1 2017 2014 2015 H1 2016 H2 2016 H1 2017 64
CONCLUSION
THIS IS JUST THE BEGINNING 2017 EXPANSION BY THE END OF 2017 HISTORICAL YEAR On track with GOOD PIPELINE VISIBILITY with opening of 80 clubs 62 OPENINGS BY THE END OF Q3 for the 2018 clubs > 75 locations confirmed GOOD STRUCTURE to keep control on everything Not impacted by competitors and FITNESS PENETRATION GROWTH is a big opportunity #3 FITNESS CHAIN in number of clubs GOOD RESULTS of our 2014, 2015 & 2016 clubs Opportunity to open at least 600 CLUBS #1 FITNESS CHAIN in number of members 66