INTERIM BONDHOLDER UPDATE - 15 FEBRUARY 2021 INVESTOR PRESENTATION 15 FEBRUARY 2021 - PUREGYM
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Interim Bondholder Update
15 February 2021
Investor Presentation 15 February 2021
Disclaimer
Forward-looking statements
This presentation may include forward-looking statements. All statements other than statements of historical facts included in this presentation, including those
regarding the Group's financial position, business and acquisition strategy, plans and objectives of management for future operations are forward-looking
statements. Such forward-looking statements involve known and unknown risks, uncertainties and other factors which may cause the actual results, performance
or achievements of the Group, or industry results, to be materially different from any future results, performance or achievements expressed or implied by such
forward-looking statements. Such forward-looking statements are based on numerous assumptions regarding the Group's present and future business strategies
and the environment in which the Group will operate in the future. Many factors could cause the Group's actual results, performance or achievements to differ
materially from those in the forward-looking statements. Forward-looking statements should, therefore, be construed in light of such risk factors and undue
reliance should not be placed on forward-looking statements. These forward-looking statements speak only as of the date of this presentation. The Group
expressly disclaims any obligations or undertaking, except as required by applicable law and applicable regulations to release publicly any updates or revisions to
any forward-looking statement contained herein to reflect any change in the Group's expectations with regard thereto or any changes in events, conditions or
circumstances on which any such statement is based.
Use of non-IFRS financial information
Certain parts of this report contain non-IFRS measures and ratios. We believe that these measures are useful indicators of our ability to incur and service our
indebtedness and can assist certain investors, security analysts and other interested parties in evaluating us. Because all companies do not calculate these
measures on a consistent basis, our presentation of these measures may not be comparable to measures under the same or similar names used by other
companies. Accordingly, undue reliance should not be placed on these measures in this presentation. In particular, Adjusted EBITDA and Run-Rate Adjusted EBITDA
are not measures of our financial performance or liquidity under IFRS and should not be considered as an alternative to (a) net income/(loss) for the period as a
measure of our operating performance, (b) cash flows from operating, investing and financing activities as a measure of our ability to meet our cash needs or (c)
any other measures of performance under IFRS.
Investor Presentation 15 February 2021 2Interim bondholder update The group continues to perform in line with expectations during this latest extended closure period Q1 lockdown status • All geographies currently closed due to government restrictions • We are prudently managing on the basis of lockdowns being in place until at least 31 March • Current expectation is that Denmark and Switzerland are likely to open before UK • Rapid management actions are minimising cash burn • Government lobbying continues as well as proactive engagement with landlords Cash flow & liquidity in line with prior guidance (and burn rate 20%+ lower than lockdown 1) • Comprehensive balance sheet reset in 2020 provides ample headroom • £236m available liquidity as at end of December 2020 • £4.5m per week targeted total cash burn for the fully closed group1 • Equates to c. 12 months of liquidity (assuming a total closure across all geographies) • £37m of deferred liabilities as at 31 December 20201 Outlook remains positive • Underlying resilience of demand and business model well-proven in all 3 geographies • Ability to rebuild the business quickly once gyms are reopened is clear • We expect supply to leave the market creating further opportunities • Medium to long term outlook remains very positive Notes: 1. Total cash burn rate includes interest and committed Capex but excludes any settlements of the deferred liabilities from 2020 Investor Presentation 15 February 2021 3
£236m of available liquidity to manage ongoing disruption &
payment deferrals
Actual liquidity development and unaudited December 2020 position
£297m1 An additional
£1m £278m1 £3m £37m of
£266m1 One off cash outflows deferrals are
£20m £3m due to be
£12m settled in 2021
£236m1
Group EBITDA Settlement of £17m £2m
152 less interest deferred
£8m £3m
133 & payments from 121
maintenance Q2 lockdown Group EBITDA
capex 91
less interest
&
maintenance
Positive underlying capex
37 37 Group cash flow Ample liquidity
from which to
Reflects impact absorb the 2021
of 4 week Q1 lockdown
135 England & 135
Danish
98 98 lockdowns
10 10 10 10
Proforma Interest paid 8 week net Proforma Sept & Oct Growth Settlement of Liquidity at Nov & Dec Growth Exceptional Settlement of Unaudited
liquidity at cash flow liquidity at Cash Flow capex deferred 30-Oct-20 Cash Flow capex items deferred liquidity at
30-Jun-20 (before interest) 28-Aug-20 payments payments 31-Dec-20
Undrawn Overdraft Undrawn RCF Cash (Drawn RCF) Cash
Notes:
1. Liquidity includes Cash, undrawn Revolving Credit Facility commitments and undrawn Overdraft commitments and is subject to a £30m minimum liquidity test at prescribed intervals. Investor Presentation 15 February 2021 4Weekly operational cash burn is circa £1m better than lockdown 1
Average weekly cash burn (14 weeks) – Lockdown 1 (Q2 2020)
£m
Underlying operational cash burn for the fully closed group is circa £1m better in the current
Unmitigated Mitigation activity Underlying Q1 2021 lockdown than the initial lockdown in Q2 2020
operational operational
cash burn Government Operational cost cash burn
support compression This is a result of learnings from the original lockdown allowing faster implementation of
operational savings alongside a more flexible furlough scheme
Both these lockdown cash burn rates exclude the benefit of any deferrals and therefore include
(4.0) the impact of the full rent and tax payments that would normally fall due in the closed period
1.8
We remain in ongoing discussions with landlords (and Government) and we expect concessions
2.2 to be made on rent although it is not possible to quantify these at the current time
(8.0)
Targeted average weekly cash burn (13 weeks) – Lockdown 3 (Q1 2021)
£m This is our best estimate of total cash
out over an extended period, taking
Unmitigated Mitigation activity Underlying Committed Capex / Finance Underlying total into account all current capex
operational operational Other1 charges cash burn commitments and known interest
cash burn Government Operational cost cash burn (including financing)
support compression payments due each quarter
This £4.5m prudently assumes that no
(3.0) new deferrals are created as a result
2.6 of the new lockdown period and does
(0.5) (4.5)
not assume settlement of the £37m
(1.0)
of deferred items from 2020
2.4 Paid quarterly,
(8.0) interest averages Timing on these is unknown
circa £1.0m per week
Notes:
1. Includes committed growth Capex, Working Capital timings and small revenue benefits Investor Presentation 15 February 2021 5PureGym Group has both the experience and ample financial
reserves to deal with multiple national lockdowns
Response to the Q1 2021 lockdown Months of liquidity on hand (assuming a total lockdown across all geographies)
• Reduce growth capex
£236m
• Reduce maintenance & refurbishment capex
Cash burn assumption1 Months of liquidity on hand
• Operational cost reductions £91m
• Upweighted forbearance negotiations with landlords Unmitigated £9.0m/week c. 6 months of total lockdown
• Deferment of payments to suppliers Downside £5.5m/week c. 10 months of total lockdown
Risk
• Support from government (to the extent available):
‒ UK Rates holiday is ongoing until April 2021 c. 12 months of total lockdown
£135m
Current view £4.5m/week
‒ Furlough schemes maintained or extended in all geographies
‒ Danish and Swiss fixed cost cover Upside £3.0m/week c. 18 months of total lockdown
Opportunity
• Proactive government lobbying to further extend the Rates
holiday, reduce VAT on membership fees, extend the rent £10m
moratorium & support on “pain sharing” with Landlords Draft liquidity
Unaudited liquidity
31 Dec 2020
31 Dec 2020
Undrawn Overdraft Undrawn RCF Cash
Notes:
1. Includes interest but excludes any deferment activity, discretionary growth capex or the catch-up of deferred liabilities (£37m as at 31 December 2020). Investor Presentation 15 February 2021 6Investor Contact Details
PureGym
Town Centre House
Merrion Centre
Leeds LS2 8LY
Website: corporate.puregym.com
Email: ir@puregym.comYou can also read
