Taking the temperature on reopening around Europe - 10th June 2020, 13:00 CEST
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Taking the temperature on reopening around Europe 10th June 2020, 13:00 CEST
Moderator:
Herman Rutgers, EuropeActive Ambassador
Participants:
Introduction Glenn Earlam, CEO, David Lloyd Leisure
Juan del Rio Nieto, CEO, VivaGym Group
Martin Seibold, CEO, LifeFit Group
David Stalker, President, EuropeActive
Glenn Earlam CEO, David Lloyd Leisure, UK
CONTENTS § Company Overview § Closure Timeline § Member Engagement § Our People § Digital Offering § Re-Opening § Consumer Attitudes § Sector Long Lasting Changes
COMPANY OVERVIEW
CEO INTRO DAVID LLOYD CLUBS OVERVIEW
UK 100
Glenn Earlam
Germany 9
CEO Holland 7
Belgium 2
Spain 2
Ireland 1
Italy 1 No. of locations
France 1
5 Years
Previous experience :
123 665k 10k
Locations Members Employees
Europe’s largest health & fitness Acquired German fitness & spa chain
operator by revenue Meridian group – Jan 2020
DL CLOSURE TIMELINE
All DL locations closed by 20th March
DL CLOSURE TIMELINE
All members set to ‘Free Freeze’ status from the
20th March
W/c 17th Feb W/c 24th Feb W/c 2nd Mar W/c 9th Mar W/c 16th Mar No Subscriptions taken during closure period
Members will be credited for lost subscription
days and expired retail activity (eg PT vouchers,
swim/tennis tuition, etc)
New DL@Home App launched to members
providing fitness content/live classes.
First club closure, Next wave of European Rest of Europe closures;
Malaspina Milan - 24th Feb closures;
§ Germany (x9) – 16th Mar
§ Spain (x2) – 14th Mar DL@Home free to all members
§ Holland (x7) – 17th Mar
§ Belgium (x2) – 15th Mar
§ Ireland (1) – 18th Mar
§ France (1) – 15th Mar
§ All UK (100) – 20th Mar
MEMBER ENGAGEMENT DL regularly engage members through communications using segmental email, social media and app push notifications. Over 60k app users per day.
MEMBER ENGAGEMENT DL regularly engage members through communications using segmental email, social media and app push notifications. Over 60k app users per day.
OUR PEOPLE
TEAM MEMBER POSITION
§ 99% of team members on furlough status.
§ Company top up to 100% of salary March & April, 80% in May & June during closure.
§ Hardship fund created for team members and self-employed professionals.
TEAM MEMBER ENGAGEMENT
§ Regular company wide emails from CEO or HR Director covering important business
updates and/or employment related updates.
§ CEO live broadcast and Q&A session. Two events conducted, one to senior
management and GM’s (c200 people) and a further session attended by 2,500
people (inc Europe). More than 300 Qs answered and posted on line.
§ The entire broadcast was recorded and made available on demand to anyone who
could not see it live.
§ Use of KITbag; our employee ‘social media’ app for announcements and chat.
§ Volunteer schemes outside DL, partnerships with organisations such as NHS, Care UK
and other care homes, Stroke Association and the Cabinet Office.
§ Focus on mental health and wellbeing via staff ‘wellbeing survey’ and supporting
Mental Health Awareness Week with a daily package of hints, tips, videos and blogs
to support our team with positive mental health.
§ Launched DL Giving Day where all team members were encouraged to join in a day
of fundraising via some form of activity and donate to raise funds for the NHS
Together charities.
DIGITAL OFFERING
DAVID LLOYD CLUBS @ HOME OTHER DIGITAL PARTNERSHIPS FORMED
§ Digital offering developed in-house, content covers fitness, nutrition, education, kids § Member and Club vs Club Myzone events formed, attracted c10k members per event
activities, wellbeing and music playlists. in the previous three challenges
§ 51% of our members have used the app § Virtual ‘Strava’ communities piloted focusing on cycle and running challenges
§ 2 million On Demand video views
§ Live virtual ‘cook-off’ events with celebrity chefs
§ 50 live classes per week (40-60 avg)
§ 125,000 live class participantsDIGITAL OFFERING There has been a positive reaction to DL@Home and the support it has provided during the lockdown period from our members….
RE-OPENING, OUR 4 GUIDING PRINCIPLES
We have 4 key guiding principles that underpin our re-opening plan;
1. Cleaning Protocols
o Heightened measures of cleaning that follow government guidelines
o Additional touchpoint cleaning and sanitisation regularly throughout the day
o Guidance and training to all club teams covering cleaning, PPE, hygiene, waste management
2. Social Distancing
o We will ask members and team to remain 2 metres apart or in line with local guidance
o Clear signage and floor stickers in areas of queuing such as reception, studios etc
o Reduce occupancy levels in all areas to reduce the flow of traffic.
o We will take gym equipment out of use inside to ensure distancing
3. Keeping our Team Safe
o Clear employee guidelines in the event of sickness and Covid symptoms
o Team to complete a Covid-19 workshop online before they start their first shift
o PPE and sanitisation provided to staff members; communal space configured to be 2m apart
o Meetings, conferences and training to be held virtually wherever possible
4. Keeping our Members Safe
o Enforce social distancing guidelines and amend our terms & conditions to reflect this.
o We will ask members to clean equipment after use, more sanitiser spray and blue roll to
help
o We will increase the cleaning across the club in particular to high traffic/contact areas.
o Utilise outdoor space for exercise where possible.JUNE OPERATING PLAN – PARTIAL RE-OPENING
§ Our goal is to provide members with maximum product
as permitted by local government guidelines.
§ Current restrictions are more relaxed pertaining to
outdoor activity.
§ Our focus ahead of indoor opening is to leverage our
vast outdoor space to create a range of activity.
§ This includes tennis, small group exercise, gyms,
personal training and cycling/spin.
§ Members will have the option to ‘opt-in’ at 50% of
membership fees.
§ Our expectation is that this trading period will be
unprofitable, but an important step to maintain member
engagement.CONSUMER ATTITUDES
Our Member research suggests; Q. How important are the following when thinking about returning to your David Lloyd Club? Select all that apply.
§ Overall sense of cautious optimism
Stringent cleaning & hygiene practices 95%
Social distancing measures 85%
§ General positivity towards the brand in terms of our handling of the pre-
Staff / Team members provided with relevant PPE 68%
lock down period
Capacity restrictions; i.e. class sizes 68%
Swimming outdoors 38%
§ Positive anticipation in returning to the club
Outdoor group exercise classes 32%
Playing tennis outdoors 14%
§ Demonstrating high degree of cleanliness and hygiene crucial to member
Something else 13%
attitudes in returning to DL clubs
Q. From the list below, which, if any have you missed doing? Select all that apply.
§ In addition, demonstrating good levels of social distancing is an important
factor to members.
§ Visiting the gym/health clubs ranks 2nd to visiting family & friends when
asked what members miss the most during lockdown
§ Younger and middle aged members more eager to return, older age
ranges (55+) more cautious about returning immediately.
90% 79% 75% 73% 64% 43% 43% 42% 36% 35% 32% 27% 26% 17%
Visiting Going to Eating out Travelling Going to Going to Taking part Using a Going Going to Relaxing Taking part Going to Visiting a
Family / Gy m abroad the hair the pub in Group Spa Cinema concert / outdoors in outside the museum /
Friends dresser Ex live sport activities theatre gallery
*source : David Lloyd internal member surveyPOTENTIAL LONG LASTING CHANGES FOR THE SECTOR § Strong digital content to complement membership will become a key part of the gym/health club offering § Increased market potential as consumers learn the benefits of exercise and health/wellbeing § Greater technology to help improve the service proposition (eg, contactless entry, app ordering) § Potential different usage patterns as peoples working habits change – traditional peak times flattened § High cleaning / sanitisation expenditure will remain a key feature of a club operating costs § More opportunities to acquire and consolidate….for the survivors!
Juan del Rio Nieto CEO, VivaGym Group, ES
Taking the temperature June 10th, 2020
CONTENT
01 VIVAGYM GROUP
02 COVID-19 TIMELINE
03 TRACTION DURING LOCKDOWN
04 PLANNING THE RE-OPENING
05 KEY TAKEAWAYS
06 FIRST IMPRESSIONS AFTER RE-
OPENING
1901 VIVAGYM GROUP
> VivaGym Group value proposition
State of the art fitness
experience Prime location
ll &
Premium look & feel and Extensive gym Aspirational location
equipment e Lo Signage & visibility
Focus on studio class offering with 3
y Sh ng ca Access & parking
studios and HIIT zone
a lit feri tio
n
Shell quality
App for its members and Online workouts q u of
Nearing 1000 PTs
i gh ness
H fit
Sani Safety &
No c
Prici
n
tatio
ontr
,
ng & t
ni ng
Transparent
pricing with Cleaning, Safety & Sanitation
No Contract ac
Clea
One price per Cleaning and Safety to be at the
gym centre of Staff priorities
Joining fee Opening hours Increase and adapt cleaning hours
No contract Staff actively focused on cleaning
Other initiatives
Long Opening Schedule
18 hours per day in Spain and 16h in Portugal
Open 7 days per week
Open 363 days per year
2001 VIVAGYM GROUP
> VivaGym Group at a glance
24th Largest European Fitness Company
• Over 335k members in Feb-20
• Largest Southern Europe player
46% Members CAGR from 2015-2019
• Fast paced growth supported by strong financials
• Among the fastest growth companies in Europe
96 Clubs and reaching 100 in 2020
• Despite Pandemic headwinds, company expects to
continue expansion
• Target to end 2020 with over 100 gyms
Top 100 Company to work for
• The VivaGym Group was ranked among the 100 Best
companies to work for in 2019 in the Actualidad
Economica ranking
• The only fitness company to be ranked
2102 COVID-19 TIMELINE
> Emotional rollercoaster
> Closing date: Pre-emptive versus Reactive
> Reaction to news of infections… when in our gyms?
> Messaging the decision to Team, Members and Stakeholders
> Coordinating with Industry association
2203 TRACTION ON LOCKDOWN
> Case Study.
> On-line classes Social Networks.
From 16.03 to 24.05
o +750 live classes
ON-LINE
o Avg. 61 classes per week
CLASSES o +1,901k avg. audience in first 24 hours
o +1,276k audience in IGTV
Followers growth
o IG: +2.5 times
SOCIAL
the pre-lockdown followers
NETWORK o FB: +3.75 times
the pre-lockdown followers
o Launch 27th of April
o +10,5k users
HUT HOME o 521 live classes
o 284 on demand classes
o +48k views
2303 TRACTION ON LOCKDOWN
> Case Study.
> Team Project
• 32 training programmes
• 751 staff trained
• Contributions during lockdown: +38.7k
members
• Continuous contact
• Weekly calls
• CEO’s communications
New training
> Enhancement of the value proposition programmes
example
• Re-definition of studio classes
• Online classes
CEO’s communication
• Outdoor activities project example
24 2403 TRACTION ON LOCKDOWN
2504 PLANNING
THE RE-OPENING
> Re-opening sequel.
> Zoning the gym
> Access control
> Gradual opening of the gyms
> Overmanaged clubs
> Sharing of incidences and learning curve
2604 PLANNING THE RE-OPENING
WHEN DO YOU PLAN TO RETURN TO BEFORE DE CUARENTINE, HOW MANY HOW MANY TIMES DOY YOU THINK YOU
THE GYM? TIMES DID YOU GO TO THE GYM? WILL GO TO THE GYM?
EXPECTED BEHAVIOUR
3% 3% 3% 6% 10%
37% 42% 40% 21% 15% 17% 17% 25%
5% 7% 6% 40%
53% 58% 55% 56% 61%
47% 50% 59% 43%
18% 3% 25% 5% 22% 4% 21% 1% 10% 6%
SP PT TOTAL
When it opens After summer SP PT TOTAL SP PT TOTAL
I don't know I will not come back04 PLANNING THE
RE-OPENING
> The handbook of operations post-covid19.
• Accessing and Access control.
• PPE for staff
• Physical distance management
• Enhanced cleaning & sanitisation.
• Value Proposition revisited.
2805 KEY TAKEAWAYS
> The VivaGym group acted swiftly to protect its Stakeholders while preparing for
the re-opening
The Covid-19 Pandemic evolved very fast and with minimal impact in consumer behaviour until 1
week before the lockdown…
• VivaGym Group traded in line with past year in the week leading to the closing of the gyms
…However the VivaGym Group proactively decided to close the gyms to ensure the protection of its
employees and members
• Company acted before Governments ordered the closing of the facilities
The VivaGym Group devised a plan focused on 4 key elements to protect all stakeholders
• (i) Organizing closing, (ii) Protect our Staff and Members, (iii) ensure best practices during lockdown to minimize investor impact
and (iv) prepare for the future
During the shutdown, the Group has launched several successful initiatives to engage with members
• Online classes through Social media and significant increase in social media engagement
• HUThome launched in Portugal
The VivaGym Group team has shown strong resilience
• Challenging times called for additional team effort to take adequate decisions in a short time period
The VivaGym Group is preparing for the future by planning what it can control and mitigating uncertainty
• Phased re-opening to ensure best practices and minimize impact of unknown events
• Thorough plan to ensure safety of Employees and Members
Unity from the industry
• Fitness Industry came together and shared experiences and visions in numerous forums
2906 FIRST IMPRESSIONS AFTER RE-OPENING
> Attendance behaviour on re - opening
Spain Attendance vs Prior Year Portugal Attendance vs Prior Year
Members at c. 86%
Members at 88%
Less joiners but a spike of online joining
Studio attendance at 39% of capacity
Studio attendance at 45% of capacity
3031
Martin Seibold CEO, LifeFit Group, DE
LifeFit Group
Re-Opening - Key lLearnings
June
2020
page 33Today’s presenter
Martin Seibold, CEO LFG
§ Joined Fitness First in 1998 and has
held numerous country and global
senior roles
§ Successfully reshaped Fitness First
UK during 2011-2016 before selling
to DW Sports
§ Holds a Master’s degree in Sports
Economics
Inspiring each other Blowing away customer Taking responsibility,
and always winning expectations with our love for being entrepreneurial Always striving Doing the right
as a team health and fitness and always keep going for excellence thing – every timeBrands at a glance
Re-opening – reality check
A chance of a lifetime
page 35MULTI-BRAND FITNESS OFFERING IN DISTINCT MARKET SEGMENTS
To be rolled out Operating brands
Frankfurt/Oct, Berlin/Dec Cologne/July 2021 TBC 4 Clubs 56 Clubs 24 Clubs
Price Studio / Boutique Premium Upper range Mid-range
§ Boutique fitness /
Offering/focus § Boutique fitness § Boutique fitness § Performance, strength § Wellness & full service § Modular, smaller towns
PT
§ US-based pioneer § Personalized, high-
§ US-based leading § Leading value fitness chain in
of indoor high- quality, digitally § Premium chain in Hamburg § #1 premium health and
boutique brands in the Saar-Palatinate region
intensity interval supported workout offering high-intensity fitness fitness club operator in
Description pilates and barre with focus on offering young
training combining with permanent courses with state-of-the-art Germany with strong
with 1.000+ customers high value for
cardio and strength access to lifestyle machines as well as cross-fit nationwide brand awareness
training coaches studios in USA money
§ EUR 99 joining fee
§ No joining fees § EUR 95 joining fee § EUR 30-40 joining fee
§ EUR 99/month (12 § EUR 49-99 joining fee
Price point § Classes start from § TBD § EUR 70/month (12 month § EUR ~30/month (12 month
month § EUR 50-85/month
EUR 25 subscription) subscription)
subscription)
Avg. retention § N/A § 70%+
# of members § N/A § 250,000
Page 37TOP LOCATIONS
LifeFit Group combines successful fitness brands from the boutique, „high-value-low-price” and premium segments under 1 roof:
Fitness First #1/2 = Market position
Hamburg:
8 FF clubs
within market segment § Fitness First, elbgym & boutique studios focus on
elbgym + 4 elbgym clubs the metropolitan areas and some regional
#1 + 1 elbgym opening Berlin: strongholds
10 FF clubs
smile X
+ 1 Barry’s opening #1 § SmileX is more versatile and will expand with
corporate and franchise gyms
The Gym Society
Barry’s Bootcamp
Düsseldorf: § Germany´s set up with independent federal states
#1
#2 3 FF clubs
meant we had to close all gyms within 10 days
beginning mid-March, gradually re-opened them
since mid June
Frankfurt:
8 FF clubs
§ Regulations vary by state resulting in mixed bag of
+ 1 Barry’s opening #1 operational procedures
Cologne:
5 FF clubs
+ 1 TGS opening
#1
Munich:
4 FF clubs
+1 elbgym
opening #2
Stuttgart
Saar-Palatine:
(3 Clubs)
#1 21 clubs
PAGE 38Brands at a glance
Re-opening – reality check
A chance of a lifetime
page 39RE-OPENING – WHAT IS REALLY HAPPENING
Compensation requests for not
Staff are overwhelmed & insecure (private &
able to use, not want to use,
work), members exactly the same
reduced access/offerings increase
Restrictions, offering reduced, home Everybody wants to know: what
office etc. = less visitors -63/54/50% will be the future restrictions &
Classes full, PT business very slow how will you handle it (i.e. sauna)
Information flow is constant & ever Landlords will struggle to really
changing – less is more (ROID & F) Like it or not support going forward
Joiners are down -62/78/70% There is no money to be made in
some light: week 4 only -25%, Asia digital offerings – just cost – but
115% week 6 onwards member retention
Pro-active selling - how would you react?
Cash is king - be prepared for a
Corporate business - patchy
second wave or opportunities
Referrals - major driver
PAGE 40RE-OPENING – WHAT IS REALLY HAPPENING
Staff are open to change & will go the extra mile,
teams really pulls together and excel Social media is a real asset (also
for challenging commentary)
A chance for employer branding (also with GX, PT)
Willingness & speed to digitise
Members who train are really happy
and create frictionless
Your teams have time for the Live classes, WOD – real popular –
member, it is more personal Like it chance tor drive retention
Fitness industry relatively stable vs
Clubs have never looked better other; Fitness improves health -
boost the immune system
Member habits will change,
Members are really loyal, underlying economic situation might result in
retention is improving reduced consumption - still 10
weeks of Xmas will drive business
PAGE 41MANAGE TO SURVIVE & RE-OPEN ON TIME
Key actions during lockdown Processes & Finances Portfolio
• Maintain liquidity § Prepare quantification and scenarios analysis § Engage with LLs to defer / reduce rent cost by
• Stakeholder management for financial lockdown impacts 50% or more, but keep long term impacts in
§ Take actions based on financial forecast with mind
• Good & transparent member communication
landlords, members handling, overall cost ‒ short term: ensure liquidity; long term: achieve
• Keep staff moral up base lower rent levels & define future lockdown rules
• Prepare for re-opening § Define short, medium and long term financial § Use idle time to upgrade clubs
• Plan future waves milestones to be achieved § Prepare for set up rules post lockdown
People Product & Members Price & Marketing
§ Clubteams: 95% furloughed, service team § We were able to continue dues collection, § Website as central tool for communication
20%, freelance 25% voluntary (no funding) ensured over-compensation options with social media channels feeding traffic
§ Regular video update with senior leaders § Increased digital offering § Review pricing/membership model (flexibility)
§ Best practice sharing between brands § Prepare all club areas for re-opening § Increase digital cut through for future searches
§ Use time to educate & train staff § Operational set up incl. booking § Make restriction comms/signage fun
§ How to deal with different reactions of staff § Prepare for many member requests in § Immune-booster summer campaign launched
during crisis? (e.g. wearing masks y/n) Customer Service and clubs
PAGE 42RE-OPENING
RE-OPENING - IMPRESSIONS
- IMPRESSIONS
TITEL DER PRÄSENTATION
CALIBRI FETT KURSIV
Untertitel der Präsentation, Calibri kursiv
PAGE 43RE-OPENING - IMPRESSIONS Re-opening set up, club mock-up for club rearrangement PAGE 44
RE-OPENING - IMPRESSIONS
Re-opening information
Compensation links
Guest pass
Brand campaign
Join
Home Workouts
Live Streaming
PAGE 45RE-OPENING - IMPRESSIONS
Make restriction comms/ signage fun and easily understandable
Online
Print
PAGE 46RE-OPENING - IMPRESSIONS Use the team & make staff training interesting through LFG online training platform PAGE 47
RE-OPENING - IMPRESSIONS Be consistent in messaging PAGE 48
RE-OPENING - IMPRESSIONS
Online training offering – Variety is king (400+ live classes)
Ask your members:
Live Classes KPIs:
§ Ø # of participants per class: 1.800
§ Top: First class ever 27k+
§ Increase in Youtube followers: 999%
PAGE 49RE-OPENING - IMPRESSIONS Online training offering – Variety is king (pick your partners matching the brand) PAGE 50
RE-OPENING – EMPLOYEE VOICE – ASK YOUR STAFF
Employees were asked to rate the importance of several initiatives in preparation for the re-opening (blue = not important/ purple = very important)
Good availability of desinfectant Staff and members take care of utilised equipment cleaning
Not important 2 3 4 Very important Not important 2 3 4 Very important
Sufficient physical distance between members in the club
Club staff works wears face masks
Not important 2 3 4 Very important
Not important 2 3 4 Very important
PAGE 51RE-OPENING – EMPLOYEE VOICE – ASK YOUR STAFF
Generate feedback on educational needs and crisis management
What kind of training are you interested in, in the next couple of months? § Giving employees the opportunity to voice their needs and
comments is highly valued
§ Free text answers provide valuable feedback which can be used to
optimize procedures
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Please rate your satisfaction with the current crisis management
Fit
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Not satisfied 2 3 4 Very satisfied
PAGE 52RE-OPENING – CONSUMER VOICE – ASK YOUR MEMBERS
Maintaining general Fitness, strength training and GX are desired mostly by our members once studios are open again, immune system on the rise (from 4% to 26%)
Please select the main reasons because of which you want to reactivate your training
Improve overall Strengthen the Cardio & Strength & Group Fitness Weight Improved look Back training & Physical and
fitness immune system endurance muscle reduction health mental balance
training building
PAGE 53RE-OPENING – CONSUMER VOICE – ASK YOUR MEMBERS
Cleanliness and hygiene are key drivers for members (blue = not important/ purple = very important)
Enough disinfectant is available to all members Members clean the used equipment by themselves (e.g. yoga mat)
Not important 2 3 4 Very important Not important 2 3 4 Very important
Generally increased gym cleaning intervals
Not important 2 3 4 Very important
PAGE 54RE-OPENING – CONSUMER VOICE – ASK YOUR MEMBERS
Enough reasons to be optimistic – Members want to workout a lot post Corona – not true looking at the first 3 weeks
How frequently do you want to workout after the re-opening?
Less than 1 x per week 2 x per week 3 x per week 4 x per week No training until the situation
1 x per week has calmed down
Piper Sandler Industry Research:
§ ~83% are likely to keep their gym membership once their gym reopens
§ ~34% claim to be exercising more than prior to the crisis
§ ~68% of gym members plan to keep their membership even during an extended recession
PAGE 55Brands at a glance
Re-opening – reality check
A chance of a lifetime
page 56MANAGE TO COME OUT AS A WINNER
§ What did you hesitate to do?
§ Never dared to do?
§ Where did your team push
you back?
§ The world has changed
§ You must change too
§ Now is the time
Phoenix - Business Transformation Summer 2020
PAGE 57MANAGE TO COME OUT AS A WINNER
Initiatives which create certainty, support transformation (and take cost out):
Phoenix program
PRICE & PROCESSES &
PEOPLE PORTFOLIO PRODUCT
MARKETING FINANCES
Showcase & Facility Equipment bullet
Club team structure 1-click membership 50% less processes
bullet proof next 2 yrs proof next 2 yrs
Incentive structures Concierge Pricing & future t&c Legal structures
Daytime cleaning
Staff development Future digital offering Social media 2.0 Insurance options
in-house
Intrinsic motivation Leases 2.0 Gym floor exciter Compensation options
E-learning M&A opportunities Retail simplified
What are yours?
PAGE 58Q&A PAGE 59
Q&A Herman Rutgers, EuropeActive Ambassador
Closing comments David Stalker, President, EuropeActive
Thank you
www.europeactive.eu/covid19
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