basic-fit reports strong revenue growth with...

25AUGUST2016–H12016RESULTS

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BASIC-FIT REPORTS STRONG REVENUE GROWTH WITH SIGNIFICANT OPERATING LEVERAGE

H1FINANCIALHIGHLIGHTS

Revenuegrewby29%yearonyearto€124million AdjustedEBITDAgrewyearonyearby39%to€37million AdjustedEBITDAmarginof30%(H12015:28%) Adjustednetearnings1of€3.5million(H12015:€3.1million) Significantlyreducednetdebtto€176millionandaleverageratioof2.5(YE2015:€255million;4.2timesnetdebt/LTMadjustedEBITDA)

H1OPERATIONALHIGHLIGHTS Numberofclubsgrewto368;increaseof30clubsinH12016,ofwhich19inFrance Totalmembershipsgrewto1.116million;increaseof28%yearonyear Strongdemandforpersonaltrainersanddaypasses;otherrevenueup33% Sportswaterbeingmadeavailableinallcountries;nowsoldin92%ofourclubs

OUTLOOK Forthemediumtermwereiterateourguidanceofover20%revenuegrowthwithsignificantoperatingleverage

Forfullyear2016weexpecttoreportrevenueofaround€260millionandadjustedEBITDAofatleast€80million

Weareconfidenttoopenbetween65and75clubsthisyear

ReneMoos,CEOBasic-Fit:Basic-Fithadastrongfirsthalfoftheyearinwhichwecontinuedtodeliversubstantialgrowthofourbusinessandfurtherimprovedouroperatingmargins.

AfterthesuccessfulIPOinJune,thesimultaneousdeleveragingandwiththenewcreditfacilitiesinplacewehavesubstantiallyimprovedourcapitalstructure.Thiswillenableustocontinuetoexecuteourgrowthstrategyandfurtherdeleveragegoingforward.

Inthefirsthalfoftheyearweadded30clubstoournetworkandinJulyandAugust-to-dateweopenedanadditional13clubs.Withthestrongpipelineofclubsunderconstructionweareconfidenttodeliverontheclubopeningtargetofbetween65-75clubsthisyear.Theseclubswillcontributetoourmediumtermtargettoachieveareturnoninvestedcapitalonmatureclubsofatleast30%.

Note:AdjustedclubEBITDA,adjustedEBITDA,netadjustedearningsandleverageratioarenotameasureoffinancialperformanceunderIFRS.WeapplyadjustedEBITDAandadjustednetearningstoexcludetheeffectsofcertainexceptionalitemsandone-offsthatarenotindicativeofourunderlyingperformance.Theadjustmentsrelateprimarilytonon-cashpre-openingcostsandone-offchargeslinkedtotherefinancingandthelistingofthecompany.1Netearningsadjustedforamortisation,interestonshareholderloans,exceptionalitemsandone-offsandtherelatedtaxeffects.


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FINANCIALANDBUSINESSREVIEW

REVENUEInthefirsthalfof2016,revenuegrewby29%to€124millioncomparedto€96millioninthesameperiodlastyear.Thegrowthismainlytheresultofhigherfitnessrevenue.Otherrevenuecontributedaswell(up29%and33%respectively).Thecontinuedexpansionofthenumberofclubsinournetworkandtheadditionofmembersinourexistingclubscontinuedtobethemaindriversfortheincreaseoffitnessrevenue.Theincreaseofotherrevenuewasmainlytheresultofhigherdemandforandincreasedavailabilityofpersonaltrainersandhighersalesofdaypasses.

Totalsarebasedonnon-roundedfigures

AllcountriesshowedstrongrevenuegrowthcomparedtoH12015.InFrancewehavedeliveredrevenuegrowthof156%,whichismainlyexplainedbyourexpansionstrategywhichhasastrongfocusonFrance.InFranceweincreasedthenumberofclubsby32comparedtoayearago.InBelgium,theNetherlands,SpainandLuxembourgweadded19,12,9and2clubs

KeyfiguresUnaudited-in€millions H1'16 H1'15 change

Totalrevenue 123.8 96.1 29%Fitnessrevenue 121.3 94.2 29%Otherrevenue 2.5 1.9 33%Operatingexpenses (70.1) (56.1) 25%AdjustedclubEBITDA 53.6 40.0 34%Totaloverheadexpenses (16.5) (13.3) 24%AdjustedEBITDA 37.2 26.7 39%Exceptionalitems (6.9) (1.9)EBITDA 30.2 24.8 22%Depreciation&Amortisation (31.6) (23.3)Operatingprofit (1.3) 1.5Netresult (26.1) (12.1)

Adjustednetearnings* 3.5 3.1 13%

AdjustedEPS* 0.11 0.10 4%* Beforeamortisation,interestonshareholderloans,exceptionalitemsandone-offsandtherelatedtaxeffectsTotalsandchangepercentagesarebasedonnon-roundedfigures

GeographicrevenueandclubssplitUnaudited-revenuein€millions

Clubs Revenue Clubs Revenue

Netherlands 140 48.9 128 39.3Belgium 148 52.2 129 43.7Luxembourg 8 4.1 6 3.7France 44 9.4 12 3.7Spain 28 9.2 19 5.7Total 368 123.8 294 96.1

H12016 H12015


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respectivelytothenetwork.

Therolloutofadd-onproductswentwellintheperiodandcontributedpositivelytotheaveragefitnessrevenuepermemberpermonthwhichincreasedby3%to€19.51comparedto€18.90inthefirsthalfof2015.Wecontinuedtomakesportswateravailableinmoreclubsinmorecountries.Attheendoftheperiod,92%ofourclubssellsportswater,whichis94clubsmorethanattheendofH12015.WeintroducedthesportswaterinFranceinMayandaftercloseofthehalfyearalsoinSpain.OurLIVEGXclasses,whicharecomplementingourvirtualgroupclasses,havealsobeenmadeavailableinmoreclubsandcurrentlyweoffertheseclassesinnearly60%ofourclubs.

OPERATINGRESULTOnaclublevel,totaloperatingexpensesincreasedto€70millioninH12016from€56millioninH12015,whichismainlytheresultofthegrowthinthenumberofclubs;theaverageoperatingexpensesperclubwerereducedbyonepercent.ThegrowthofrevenueoutpacedthegrowthofoperatingexpensesandasaresultwesawtheadjustedclubEBITDAmarginimprovefurtherby170bpsto43%.

Overheadexpensesincreasedto€17millionfrom€13million.ThisismainlyexplainedbytheincreaseofinternationaloverheadcostsduetothefurtherprofessionalisationoftheorganisationinthecontextoftherecentlistingonEuronextAmsterdam.

InH12016,adjustedEBITDAincreasedby39%to€37millionfrom€27millioninH12015.TheadjustedEBITDAmarginincreasedby220bpsto30%,showingtheoperationalleverageofourbusinessmodel.

EXCEPTIONALITEMSIntheperiodexceptionalitemstotalled€6.9millioncomparedto€1.9millioninthefirsthalfof2015.TheincreaseismainlytheresultoftheexpensesrelatedtotheIPO(€4.9million).

INTERESTANDNETDEBTInJuneweenteredintoanewfacilitiesagreementwithsignificantlyimprovedtermsandusedthebankloanandtheproceedsofthePrimaryOfferingintheIPOtodeleverageandimproveourcapitalstructure.Werepaidtheoutstandingseniorfacilities,themajorityofourfinancialleasesandwerepaidinfullourshareholderloans.Attheendoftheperiodournetdebtwas€176millioncomparedto€255million(excludingshareholderloan)attheendoflastyear,representingaleverageratio2of2.5.

Thefinanceexpensesinthefirsthalfoftheyearswere€32millioncomparedto€17millioninthesameperiodin2015.Theincreaseismainlytheresultofcosts(€12million)relatedtotheearlyrepaymentofpriorloansandleasecommitments.Thefinanceexpensesincludethe

2Netdebt/LTMadjustedEBITDA


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interestcostsonshareholderloansof€11millioninH12016and€10millioninH12015,whichwewillnolongerincurunderthecurrentcapitalstructure.

Asaresultofboththereduceddebtandinterestrates,weexpecttheinterestexpensestobesignificantlylowergoingforward.Theweightedaverageinterestrateisexpectedtobebetween2.5%and3.0%goingforward.

ADJUSTEDNETEARNINGSThenetresultinthefirsthalfoftheyearwasminus€26millioncomparedtominus€12millioninH12015.Adjustedforamortisation,interestonshareholderloans,exceptionalitemsandone-offsandtherelatedtaxeffectsearningswere€3.5millioninH12016comparedto€3.1millioninH12015.Thetransactioncosts,representingthemainiteminexceptionalitems,arerelatedtotheIPO.Thepre-openingcostsinexceptionalitemsaremainlynon-cashleasecostsincurredaheadofopeningaclub.Theone-offcostsarelinkedtotherefinancingandearlyrepaymentofourfinancialleasesandareincludedininterestexpensesintheP&L.

EQUITYTotalequityattheendoftheperiodwas€310millioncomparedtominus€24millionattheendof2015.TheimprovementistheresultoftheuseofproceedsoftheIPO.

On10June,Basic-FitbecamelistedonEuronextAmsterdam.TheexpensesrelatedtotheIPOtotalled€20million,whichisinlinewiththeestimatedamountintheprospectus.Oftheamount,€15millionisbookedagainstequityandtheremaining€4.9millionrunsthroughtheprofitandlossaccountinexceptionalitems(seealsoExceptionalItemsabove).

Reconciliationnetresulttoadjustednetearnings

Unaudited-in€millions H1'16 H1'15

Netresult (26.1) (12.1)

Amortisation 8.1 7.3Exceptionalitems 6.9 1.9Pre-openingcosts 0.7 0.1Transactioncosts 4.9 -Otherexceptionalcosts 1.4 1.8Interestonshareholderloans 10.9 10.4One-offcosts 12.4 -Breakagecostrelatedtoearlyrepayment 7.8 -Amortisationofcapitalizedfinancecost 4.6 -Taxeffects(23%) (8.8) (4.5)Adjustednetearnings 3.5 3.1Totalsarebasedonnon-roundedfigures


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WORKINGCAPITALWorkingcapitalattheendoftheperiodwas€74millionnegativecomparedto€88millionnegativeattheendof2015.Asapercentageof(LTM)revenue,workingcapitalincreasedtominus32%fromminus43%.WhenadjustedforIPOrelatedeffects,workingcapitalwas€62millionnegativeorminus27%ofLTMrevenue.Thisiswithinthetargetedrangeofbetweenminus25%andminus30%.

CAPITALEXPENDITUREMaintenancecapexinH12016was€7.3millioncomparedto€7.2millioninthesameperiodlastyear.Maintenancecapexwillbefrontloadedthisyearandonaperclubbasis,weexpectittobearound€35thousandthisyear.

Expansioncapexintheperiodwas€41millioncomparedto€38millioninthesameperiodlastyear.Theincreaseismainlyexplainedby€8.4millionofprepaidexpensesfortherelativelylargenumberofclubsthatwereopenedsoonaftercloseoftheH1period.Inaddition,theexpansioncapexincludestheexpenses(€2.7million)foranacquiredclubandtheconversionofapreviouslyacquiredclub.In2015,wespent€3.9milliononclubsthatwereopenedin2016.Onthe30clubsthatwebuiltandopenedinthefirsthalfoftheyear,wespentonaverage€1.09millionperclub.Thesizeoftheclubsthatweopenedthepastsixmonthswasonaverage15%biggerthantheaverageofourexistingnetwork.

One-offcapexwas€11millioncomparedto€10millionlastyear.Wehavenowfinalisedtheplannedrefurbishmentprogrammeandnofurtherone-offcapexinthisprogrammeisexpected.

Othercapexamountedto€2.2millionandconsistedprimarilyofrelocationcostsforourinternationalheadquartersandheadquartersinBelgiumandFrance(€1.7million).€0.5millionrelatedtosoftwaredevelopmentcosts.

CASHFLOWThecashgeneratedfromoperationsintheperiodwas€11millioncomparedto€13millioninthesameperiodlastyear.Thisismainlyexplainedbythechangeintradeandotherpayablesasweaimtoreduceournegativeworkingcapital.

Netcashflowsfromoperatingactivitieswereminus€6.1millioncomparedto€7.0millioninH12015.The€13milliondecreaseismainlyexplainedbythehigherinterestexpenses(€3.4million)and(€7.8million)earlyrepaymentsfees.Asmentionedintheinterestandnetdebtparagraph,wehaveanewfacilityinplacewithimprovedtermsandtheearlyrepaymentfeesareaone-offitem.


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Thenetcashoutflowfrominvestingactivitieswas€52millioncomparedto€37millioninthesameperiodlastyear.The€13millionincreaseisexplainedbyhighercapex,ofwhich€9millionistheresultofachangetonolongerusefinancialleasesandcreditorstopurchaseequipment.

Thenetcashflowfromfinancingactivitieswere€43millioncomparedto€16millioninthesameperiodlastyear.TheincreaseistheresultoftheproceedsoftheIPOandtherefinancing.

OUTLOOKWiththe43clubsthatweaddedtothenetworkyeartodate(30inH12016and13inJulyandAugust-to-date)andthestrongpipeline,weareconfidenttoopenbetween65and75clubsin2016.Weexpecttoreportrevenueofaround€260millionandadjustedEBITDAofatleast€80millionforthefullyear.

Forthemediumtermwereiterateourguidanceofover20%revenuegrowthwithsignificantoperatingleverage.

FORMOREINFORMATIONBasic-FitInvestorRelationsinvestor.relations@basic-fit.comFINANCIALCALENDARTradingupdate: 27October2016Fullyear2016results: 23March2017WARNINGABOUTFORWARD-LOOKINGSTATEMENTSSomestatementsinthispressreleasemaybeconsidered’forward-lookingstatements’.Bytheirnature,forward-lookingstatementsinvolveriskanduncertaintybecausetheyrelatetoeventsanddependoncircumstancesthatmayoccurinthefuture.Theseforward-lookingstatementsinvolveknownandunknownrisks,uncertaintiesandotherfactorsthatareoutsideofourcontrolandimpossibletopredictandmaycauseactualresultstodiffermateriallyfromanyfutureresultsexpressedorimplied.Theseforward-lookingstatementsarebasedoncurrentexpectations,estimates,forecasts,analysesandprojectionsabouttheindustryinwhichweoperateandmanagement'sbeliefsandassumptionsaboutpossiblefutureevents.Youarecautionednottoputunduerelianceontheseforward-lookingstatements,whichonlyspeakasofthedateofthispressreleaseandareneitherpredictionsnorguaranteesofpossiblefutureeventsorcircumstances.Wedonotundertakeanyobligationtoreleasepubliclyanyrevisionstotheseforward-lookingstatementstoreflecteventsorcircumstancesafterthedateofthispressreleaseortoreflecttheoccurrenceofunanticipatedevents,exceptasmayberequiredunderapplicablesecuritieslaw.


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INTERIMCONDENSEDCONSOLIDATEDSTATEMENTOFCOMPREHENSIVEINCOME


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INTERIMCONDENSEDCONSOLIDATEDSTATEMENTOFFINANCIALPOSITION


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INTERIMCONDENSEDCONSOLIDATEDSTATEMENTOFCASHFLOWS

basic-fit reports strong revenue growth with...

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