SPEAKER: REDOUANEZEKKRI

DATE: 09/11/2017

Redouane ZEKKRI

MOTIVATION

2004THE START…

2

clubsinBelgium22

200822 CLUBS

3

clubsinBelgium40

+26CLUBS

201066 CLUBS

4

2011CONVERSIONS OF THE LESS PROFITABLE HEALTHCITY CLUBS

5

20131 TEAM – 1 CONCEPT

6

…

2014EXPANSION IN BELGIUM… FRANCE AS NEXT FOCUS

7

…

2015EXPANSION IN BELGIUM + START IN FRANCE

8

…

2016EXPANSION IN FRANCE & NATIONAL COVERAGE IN BELGIUM

9

REDOUANE ZEKKRIInternationalStrategy&ExpansionDirector/ManagingDirectorFrance

2017:174clubsinBeLux &135clubsinFrance

Morethan80conversionsmade

Morethan250clubsopened

Thiswasjustthewarmup…

Let’snowseetogetherhowwewillreach600clubsinFranceinthenearfuture…

10

Expansionstrategy

Expansionprocess:whatallowsustoopen80clubsinFranceperyear?

HowisBasic-Fitincreasingthefitnesspenetration?

Competition:ourcompetitiveposition

Results

Conclusion

AGENDA

11

STRATEGY FOR FRANCE

65.000.000 inhabitants

8%fitnesspenetrationrateisagreatopportunity

Highlyfragmentedfranchisefocusedfitnessmarket.

Expansionbasedonnewopeningsandnotacquisitions

Plan&strategywereneeded

12

EXPANSION STRATEGYCitieswithmorethan30.000inhabitants

Ile-de-FranceRegion(excludingParis)

Paris

Citieswithlessthan30.000inhabitants(regionalclubs)

EXPANSION STRATEGY

Identifyingallcitieswithmorethan30Kinhabitantsisjustastartingpointtofindoutwhereweshouldgo…

Detaileddemographicanalysis,ROI’s&potentialareanalysedbyourBusinessControldepartment.

REGIONS IN FRANCE

14

EXPANSION STRATEGYNORD-PAS-DE-CALAIS

LilleRoubaix

TourcoingCalaisDunkerque

Villeneuved’Ascq

Boulogne-sur-Mer

Douai

Wattrelos

ValenciennesArras

Marcq-en-Baroeul

Lens

Cambrai

Roncq

Noyelles-Godault

Maubeuge

26 CLUBS

15

EXPANSION STRATEGY1. Lille 185.000inh.

2. Roubaix 97.000inh.

3. Tourcoing 94.000inh.

4. Calais 77.000inh.

5. Dunkerque 71.000inh.

6. Villeneuve-d’Ascq 65.000inh.

7. Boulogne-sur-Mer 45.000inh.

8. Douai 43.000inh.

9. Wattrelos 43.000inh.

10. Valenciennes 41.000inh.

11. Arras 41.000inh.

12. Marcq-en-Baroeul 37.000inh.

13. Lens 36.000inh.

14. Cambrai 34.000inh.

15. Maubeuge 34.000inh.

NORD-PAS-DE-CALAIS : 26 CLUBS

LilleRoubaix

TourcoingCalaisDunkerque

Villeneuved’Ascq

Boulogne-sur-Mer

Douai

Wattrelos

ValenciennesArras

Marcq-en-Baroeul

Lens

Cambrai

Roncq

Noyelles-Godault

Maubeuge

Clubopenedorcontractsigned

Locationinnegotiation

Still looking foragoodlocation

16

EXPANSION STRATEGYALL IDENTIFIED CITIES WITH MORE THAN 30.000 INHABITANTS

17

EXPANSION STRATEGYGREEN: CLUB(S) ALREADY OPENED OR LEASE CONTRACT(S) SIGNED

18

EXPANSION STRATEGYRED: LOCATIONS IN NEGOTIATIONS

19

EXPANSION STRATEGYRED: LOCATIONS IN NEGOTIATIONS

20

EXPANSION STRATEGY332 CLUBS COULD BE OPENED IN CITIES WITH MORE THAN 30K INH.

64

42

22

1515

715

6

4 1015

6

1210 16

10

21

58

29

21

EXPANSION STRATEGYCitieswithmorethan30.000inhabitants

Ile-de-FranceRegion(excludingParis)

Paris

Citieswithlessthan30.000inhabitants(regionalclubs)

EXPANSION STRATEGYILE-DE-FRANCE REGION: 8 DISTRICTS – 12.000.000 INHAB.

BELGIUM12.000.000 inhabitants11.300.000 inhabitants

ÎLE-DE-FRANCE

KM² 12.000 km²(2,5x smaller)

30.528 km²

1.000 inhabitants/km²370 inhabitants/km²

23

EXPANSION STRATEGYOUR STRATEGY FOR REGION ILE-DE-FRANCE

PARIS2.295.000inhabitants

Essonne

Yvelines

Val-d’Oise

Seine-Saint-Denis

Val-de-MarneHauts-de-Seine

PARIS

HAUTS-DE-SEINE1.592.000inhabitants

SEINE-SAINT-DENIS1.552.000inhabitants

VAL-DE-MARNE1.354.000inhabitants

SEINE-ET-MARNE1.365.000inhabitants

ESSONNE1.254.000inhabitants

VAL-D’OISE1.195.000inhabitants

YVELINES1.419.000inhabitantsSTEP 1

STEP 2

Seine-et-Marne

24

EXPANSION STRATEGYHAUTS-DE-SEINE - 175 km² - 1.592.000 INHABITANTS

4

12

63

578 9

101113 121815

1617

1422 19

2021

3123 24

2625

30

2728

323429

33

3635

1. Antony2. Châtenay-Malabry3. Sceaux4. Bourg-la-Reine5. Bagneux6. Fontenay-aux-Roses7. LePlessis-Robinson8. Clamart9. Châtillon10. Montrouge11. Malakoff12. Vanves13. Issy-les-Moulineaux14. Boulogne-Billancourt15. Meudon16. Sèvres17. Chaville18. Ville-d’Avray19. Saint-Cloud20. Marnes-la-Coquette21. Vaucresson22. Garches23. Rueil-Malmaison24. Suresnes25. Puteaux26. Nanterre27. Colombes28. LaGarenne-Colombes29. Bois-Colombes30. Courbevoie31. Neuilly-sur-Seine32. Levallois-Perret33. Clichy34. Asnières-sur-Seine35. Gennevilliers36. Villeneuve-la-Garenne

62,00032,00020,00020,00038,00023,00028,00053,00033,00049,00031,00027,00064,000114,00045,00023,00019,00011,00030,0002,0009,00018,00080,00049,00045,00094,00077,00024,00024,00085,00062,00055,00060,00087,00043,00025,000

DETAILEDMAPPERDISTRICT.

25

EXPANSION STRATEGYCitieswithmorethan30.000inhabitants

Ile-de-FranceRegion(excludingParis)

Paris

Citieswithlessthan30.000inhabitants(regionalclubs)

EXPANSION STRATEGYRegion PARIS : 20 DISTRICTS – 2.295.000 INHABITANTS.

BRUSSELS2.295.000 inhabitants1.194.000 inhabitants

PARIS

KM² 105km²(35% smaller)

161 km²

21.857 inhabitants/km²7.416inhabitants/km²

27

EXPANSION STRATEGYPARIS 2.295.000 INHABITANTS

1. EXPERIENCE IN THE FRENCH MARKET

2. BRAND RECOGNITION

3. ATTRACTIVE FINANCIAL RESULTS

4. IMPROVED MARKETING STRATEGY

DISTRICTS

1. 750152. 750183. 750204. 750195. 75013

INHABITANTS

237.127199.519194.771185.953183.713

INHABITANTS

92.49460.27359.42756.32543.479

DISTRICTS

11. 7501012. 7500513. 7500914. 7500715. 75006

DISTRICTS

6. 750177. 750168. 750119. 7501210. 75014

INHABITANTS

170.077166.552153.461144.719140.799

INHABITANTS

39.17535.66627.68921.91417.165

DISTRICTS

16. 7500817. 7500318. 7500419. 7500220. 75001

28

EXPANSION STRATEGYSTRATEGY FOR PARIS

A B

A lot of traffic

DIFFERENT

CULTUREIN

FRANCE

4,13MTravelersperday

inParis

2NDMostfrequented

metrosystemin

Europe

364KTravelersperday

inBrussels

METRO

29

DISTRICT 01METRO - 17 STATIONS

M

M

M

M

M

M

1

4

7

8

11

12

5 stations

3 stations

4 stations

1 station

1 station

1 station

M 14 2 stations

RER

R A 1 station

R B 1 station

R D 1 station

DISTRICT 02METRO – 18 STATIONS

M

M

M

M

M

3

4

7

8

9

5 station

3 stations

1 station

5 stations

4 stations

EXPANSION STRATEGY

30

RESULTS OF 2 TEST CLUBS IN PARIS.AVERAGE MEMBERS +/- 2.500 HIGHER THAN IN THE OTHER CLUBS

PARISTEST1

OpenedinQ42015

5.723members

PARISTEST2

OpenedinQ32016

6.767members

GREATRESULTS

(Withoutbrandrecognitionorbig

marketinginvestment)

=

31

EXPANSION STRATEGYCitieswithmorethan30.000inhabitants

Ile-de-FranceRegion(excludingParis)

Paris

Citieswithlessthan30.000inhabitants(regionalclubs)

CLUBS IN CITIES WITH LESS THAN 30.000 INHABITANTS ?IN BELGIUM …

Areaswithlowpopulation

Very limitedfitnessoffer

Openingclubsthefitnesspenetration

+

=

Prospectsarewillingtotravel

upto8kmoreven12kmtogotoshops,cinema,…

HOME

CLUB

Citieswithlessthan10.000inhabitants

Morethan3.500members

ApplythesamestrategyinFrance

=

HOWTOOPENREGIONAL

CLUBS?

LOCALINTELLIGENCE

(Regionalcoverage)

TECHNOLOGY(Businesscontrol

analysis)

ALREADYTESTEDIN2CITIESINFRANCE

33

EXPANSION STRATEGYSTEP 4: CITIES WITH LESS THAN 30K INHAB. (REGIONAL CLUBS)

X

XX

XX

XXX

X XX X X

X

XX

X

XX X

X

X

XX

34

EXPANSION STRATEGYNORD-PAS-DE-CALAIS: ONLY 23 % REACHED BY THE WHITESPOTS OF OUR STEP 1.

Inhabitantsreached

Inhabitantsnotreached

943.000

3.115.000

35

EXPANSION STRATEGYWE ONLY REACH 25% OF THE INHABITANTS WITH OUR 332 CLUBS.

Inhabitantsreached

12.847.000 38.652.000

Inhabitantsnotreached

36

STRATEGY ALREADY TESTED IN 2 CITIES IN FRANCETEST1

5.500INHABITANTS

TEST2

15.500INHABITANTS

Analysis

made

OpenedinMarch2017 OpenedinMarch2017

3.055MEMBERS 2.720MEMBERS

Analysis

made

37

EXPANSION STRATEGYConclusion &potential for French

EXPANSION STRATEGY CONCLUSION & POTENTIAL FOR FRANCE

STEP 1: CITIES WITH MORE THAN 30K INHABITANTS

STEP 2: ILE-DE-FRANCEREGION (EXCLUDING

PARIS)

STEP 3: PARIS STEP 4: CITIES WITH LESS THAN 30K INHABITANTS

OPPORTUNITY TO OPEN AT LEAST 600 CLUBS IN FRANCE

39

EXPANSION PROCESS15stepsexpansion process

What allows us to open80clubsperyear…

Thefirst3stepsofour expansion process

Ourexpansion room

OUR EXPANSION PROCESS = 15 STEPS

APPLIED IN ALL COUNTRIES

41

EXPANSION PROCESS15stepsexpansion process

What allows us to open80clubsperyear…

Thefirst3stepsofour expansion process

Ourexpansion room

WHAT ALLOWS US TO OPEN 80 CLUBS PER YEAR?

1EXPANSIONSTRATEGY&COMPETITIONANALYSIS

WEHAVEACLEAROBJECTIVE

&IMPLEMENTATION

STRATEGY

DYNAMICMANAGEMENT

APPROACHENSURESQUICK

POSITIONINGAROUNDNEW

OPPORTUNITIES

2DETAILEDWHITESPOTS

ANALYSIS

WEKNOWEXACTLYWHAT

WEHAVETODOAND

WHERE

IMPORTANTTODEFINE

HOWWECREATEOUR

CLUSTERS

3REALESTATEAGENTS

OURAPPROACHPROVIDESA

DETAILEDUNDERSTANDINGOFA

NEWCITY/REGIONWITHIN2

WEEKS

THISENSURESOUREXPANSION

MANAGERSAREABLETORAPIDLY

ESTABLISHMARKETPRESENCE

43

EXPANSION PROCESS15stepsexpansion process

What allows us to open80clubsperyear…

Thefirst3stepsofour expansion process

Ourexpansion room

EXPANSION PILOT ROOM

45

Ourpilotroomleadsto:

Transparency

Fullpipelinevisibility

GoodCapexcontrolandgoodcashflowmanagement

Greatvisibilityforplanning

Wehavegooddisciplineregardingourexpansionstrategythatensuresus:

Togrowquickly(speed)

Toopenclubsatthebestlocations

Toopenclubsthatwillprovideattractivefinancialresults

TomaintainanefficientlevelofCapextoreachlowbreak-evenpoints

OUR EXPANSION FOLLOW-UP

46

FITNESS PENETRATIONHowisBasic-Fitimproving thefitnesspenetration rate?

HOW IS BASIC-FIT IMPROVING THE FITNESS PENETRATION RATE?1

OPENINGCLUBSINCITIESWITHLESSTHAN30KINHABITANTS

TEST15.500inhabitants

OpenedinMarch20173.055members

TEST215.000inhabitants

OpenedinMarch20172.720members

2

COMPLEMENTARYCUSTOMERPROPOSITIONS

201530.000

members

2017400.000members

Customerpropositioniscomplementary :

• Largeclubs(1.500m²)><Smallclubs• Virtualgroupclasses><Livegroupclasses• Clusterstrategy&Flexibility(FLEXmembership)

Opening clubs for the 38.000.000 inhabitants living in cities with less

than 30K inhabitants is a huge opportunity

More than 50% have never been membersof a fitness club

48

COMPETITIONLow-cost competitors inFrance&our competitive position.

Why arewesuccesful inFrance?

Ourclubsarenotimpactedbymarketleaders

CREATION DATE (LOW-COST CHAINS WITH AT LEAST 5 CLUBS)CompetitorA

CompetitorB

CompetitorC

LesCerclesdelaForme

CompetitorD

Gymstreet

CompetitorE

Neoness

CompetitorF

CompetitorG

CompetitorH

CompetitorI

CompetitorJ

CompetitorK

CompetitorL

CompetitorM

CompetitorN

Basic-Fit

1995

1995

1996

2000

2002

2005

2007

2008

2009

2009

2009

2010

2012

2013

2013

2014

2015

2015

2COMPETITOR C LES CERCLES DE LA FORME

3

*No-franchisegyms

COMPETITOR A & COMPETITOR B

1

50

NUMBER OF CLUBS (PRESALES CLUBS INCLUDED)CompetitorA

CompetitorB

Basic-Fit

CompetitorC

CompetitorD

CompetitorE

CompetitorF

CompetitorG

CompetitorH

CompetitorI

Neoness

CompetitorJ

LesCerclesdelaForme

CompetitorK

CompetitorL

CompetitorM

CompetitorN

Gymstreet

320

165

153

108

92

85

60

50

50

43

29

22

22

17

16

8

7

4

*No-franchisegyms

2COMPETITOR B BASIC-FIT

3

COMPETITOR A

180 openings

in one year

Non-franchise low-cost clubs

Basic-Fit

GymStreet

CerclesdelaForme

Neoness

153

29

22

4

51

SIZE OF THE CLUBSBasic-Fit

CompetitorA

Neoness

Gymstreet

CompetitorB

LesCerclesdelaForme

CompetitorC

CompetitorD

CompetitorE

CompetitorF

CompetitorG

CompetitorH

CompetitorI

CompetitorJ

CompetitorK

CompetitorL

CompetitorM

CompetitorN

1.500m²

1.500m²

1.500m²

1.500m²

1.500m²

1.300m²

1.000m²

1.000m²

900m²

800m²

700m²

700m²

600m²

500m²

500m²

450m²

400m²

300m²

2COMPETITOR M BASIC-FIT

3

*No-franchisegyms

COMPETITOR J

1

2LES CERCLES DE LA FORME COMPETITOR C

3

BASIC-FITCOMPETITOR A / NEONESS

GYMSTREET / COMPETITOR B

1

LET’STAKEALOOKBACKATTHENUMBEROFCLUBS…

80 openings

in one year

52

ADVERTISED MEMBERSHIP FEECompetitorA

CompetitorB

Neoness

CompetitorC

CompetitorD

CompetitorE

CompetitorF

Gymstreet

CompetitorG

CompetitorH

CompetitorI

Basic-Fit

CompetitorJ

CompetitorK

CompetitorL

CompetitorM

LesCerclesdelaForme

CompetitorN

4,95€

9,95€

10,00€

13,95€

19,90€

19,90€

19,90€

19,95€

19,95€

19,95€

19,95€

19,99€

29,90€

-

-

-

-

-

2COMPETITOR B NEONESS

3

*No-franchisegyms

COMPETITOR A

1

53

ACTUAL MEMBERSHIP FEECompetitorA

CompetitorB

Basic-Fit

Neoness

CompetitorC

CompetitorD

CompetitorE

CompetitorF

CompetitorG

Gymstreet

CompetitorH

CompetitorI

CompetitorJ

CompetitorK

LesCerclesdelaForme

CompetitorL

CompetitorM

CompetitorN

19,90€

19,95€

19,99€

22,00€

29,90€

29,90€

29,90€

29,90€

29,90€

29,90€

29,95€

29,95€

29,95€

33,00€

35,00€

44,00€

44,00€

49,00€

2COMPETITOR B BASIC-FIT

3

*No-franchisegyms

COMPETITOR A

1

Advertised membership fee

= Actual membership fee

54

FOLLOWERS ON FACEBOOK (NATIONAL PAGES)Basic-Fit

CompetitorA

CompetitorB

CompetitorC

Neoness

CompetitorD

CompetitorE

CompetitorF

CompetitorG

LesCerclesdelaForme

CompetitorH

CompetitorI

Gymstreet

CompetitorJ

CompetitorK

CompetitorL

CompetitorM

CompetitorN

234K

70K

42K

33K

27K

25K

17K

14K

12K

12K

11K

6,7K

5K

4K

2,5K

1,3K

-

-

2COMPETITOR A COMPETITOR B

3

*No-franchisegyms

Some fitnesschains work with localpages

BASIC-FIT

1

In a few months, we will have more

followers than all other fitness chains together

55

COMPETITIVE POSITION OF BASIC-FIT

CREATEDIN2015

Themostrecent

fitnesscompany

153CLUBS

80clubsopened

in1year

1.500M²

thebiggestclubs

inFrance

19,99€

Only3fitnesscompaniesare

charginglessthan20€/month

€=

234Kfollowers

thebiggestFacebook

community

56

COMPETITIONLow-cost competitors inFrance&our competitive position.

Why arewesuccesful inFrance?

Ourclubsarenotimpactedbymarketleaders

WHY ARE WE SO SUCCESFUL IN FRANCE?1

Historicalroll-outofnewclubs

Higheraveragemembers/club

Uniquespeed

Uncomplicated:pricing19,99€/month€

Executioncapabilities:onlinemarketingfocus,expansion,…

Lowbreak-evenpoints:TechnologyCentralisationExecutioncapabilities

UniqueinFrance(Internationalexperience)

Replicablemodelfornewmarkets

Unbeatablecustomerproposition(m2,familypass,GXR,…)

Territorialexclusivityisgiventothefranchisees

€Improvesretention

Scale

OURADVANTAGES

FACTSABOUTBASIC-FITFRANCE

CLUSTERSTRATEGY

OURSPECIFICATIONS

58

COMPETITIONLow-cost competitors inFrance&our competitive position.

Why arewesuccesful inFrance?

Ourclubsarenotimpactedbymarketleaders

OUR CLUBS ARE NOT IMPACTED BY MARKET LEADERSWE HAVE A UNIQUE CUSTOMER PROPOSITION

I N H A B I T A N T SC I T Y C O M P E T I T I O N B A S I C - F I T M E M B E R S

CITY 1 60.000 Amazonia+FitnessPark(inthesamestreets)

3.663+3.967(2BFclubsopenedinAugust2015)

CITY 2 60.000FeelSport

(inthesamestreet)4.110

(BFclubopenedinDecember2015)

CITY 3 41.0003.896

(BFclubopenedinDecember2015)L’OrangeBleue+MovingExp

(inthesamestreet)

60

RESULTSExpansionoverview 2014- 2017.

Average membersperclub/openingyear.

EXPANSION OVERVIEW 2014-2017NUMBER OF FRENCH CLUBS

2014 2015 2016 2017(PRESALESCLUBS

INCLUDED)

10

25

73

153

62

RESULTSExpansionoverview 2014- 2017.

Average membersperclub/openingyear.

AVERAGE MEMBERS PER CLUB/ OPENING YEAR (Q3 2017)OUR CLUBS REACH MATURITY AFTER 2 YEARS

1015

19 29

41

NUMBER OF NEW CLUBS AVERAGE MEMBERS

3.8413.399

3.123

2.021

3.875

2014 2015 H1 2016 H2 2016 H1 2017 2014 2015 H1 2016 H2 2016 H1 2017

Higher ramp up than the 2016 clubs…

64

CONCLUSION

THIS IS JUST THE BEGINNING…E X P A N S I O N

HISTORICAL YEAR

with openingof80clubs

Ontrackwith

62OPENINGSBYTHEENDOFQ3

GOODPIPELINEVISIBILITY

forthe2018clubs>75locationsconfirmed

2 0 1 7 B Y T H E E N DO F 2 0 1 7 …

GOODSTRUCTURE

tokeepcontroloneverything

Notimpactedbycompetitorsand

FITNESSPENETRATIONGROWTH

isabigopportunity

#3FITNESSCHAIN

innumberofclubs

GOODRESULTS

ofour2014,2015&2016clubs

Opportunitytoopenatleast

600CLUBS

#1FITNESSCHAIN

innumberofmembers

66