• Club Network Expansion: Expanded by 168 clubs in the first nine months, reaching a total of 1,570 clubs.
• Revenue Growth: Revenue for the first nine months grew by 70% year on year to EUR 892 million.
• Membership Growth: Membership base increased to 4.2 million, a 13% increase year on year.
• Average Revenue per Membership: Increased to EUR 23.86 per month from EUR 23.28 last year.
• Projected Revenue: Expected full-year revenue between EUR 1.2 billion and EUR 1.25 billion.
• EBITDA Outlook: Underlying EBITDA less rent projected between EUR 305 million and EUR 330 million, representing 17% to 26% growth.
• Free Cash Flow Projection: Free cash flow before new club expansion projected between EUR 2.60 and EUR 2.95 per share, 24% to 41% higher than in 2023.
• Return on Invested Capital: Targeting over 30% for mature clubs.

• Warning! GuruFocus has detected 3 Warning Signs with BSFFF.

Release Date: October 18, 2024

For the complete transcript of the earnings call, please refer to the full earnings call transcript.

Positive Points

• Basic-Fit NV (BSFFF) reported strong growth figures over the first nine months, with revenue increasing by 70% year-on-year to EUR 892 million.
• The company expanded its club network by 168 clubs, reaching a total of 1570 clubs, with significant growth in Spain and Germany.
• Membership base grew to 4.2 million, representing a 13% increase year-on-year, with Spain showing the strongest performance.
• The average revenue per membership per month increased to EUR 23.86, up from EUR 23.28 in the same period last year.
• Basic-Fit NV (BSFFF) is on track to achieve its full-year targets, including expanding the club network to around 1575 clubs and achieving revenue between EUR 1.2 billion and EUR 1.25 billion.

Negative Points

• The average revenue per member per month is expected to be slightly lower than previously communicated, at EUR 24.25 instead of at least EUR 24.50.
• There is uncertainty regarding VAT increases in the Netherlands and Spain, which could impact pricing strategies.
• The company is facing challenges with the 2020 and 2021 club cohorts in France, which are still behind but showing slow improvement.
• The introduction of weekly pricing in France has not yet shown significant changes in membership growth or revenue.
• The potential impact of activist shareholders and their advice remains a consideration for the company's strategic decisions.

Q & A Highlights

Q: What are your thoughts on the advice from the activist shareholder? A: Rene Moos, CEO: We always consider what's best for the company and stakeholders. The letter wasn't a surprise, and we're happy to be listed. It's not a top priority currently.

Q: Can you achieve the yield of at least EUR 25.50 for next year despite the reduced guidance for 2024? A: Hans van der Aar, CFO: The basic membership in France impacted the 2024 yield, but revenue and membership growth remain on track. We're confident in achieving the 2025 yield target with new pricing strategies.

Q: Will the franchise model be in Europe, and will you enter new countries with company-operated clubs? A: Rene Moos, CEO: The first franchise steps will be outside Europe. We may open a few company-owned clubs for testing, but primarily, it will be outside our current active countries.

Q: How is the uptake of the new weekly pricing in France, and will it be offered in other markets? A: Rene Moos, CEO: Early results show no significant change. We're testing various strategies and will decide on broader implementation based on outcomes.

Q: Can you update us on the VAT increases in the Netherlands and Spain? A: Rene Moos, CEO: No clear guidance yet. If Dutch VAT changes, it will be in 2026. We may adjust prices based on membership trends. No signals of VAT reduction in Spain.

For the complete transcript of the earnings call, please refer to the full earnings call transcript.