Basic-Fit N.V. (BFIT) Earnings Call Transcript & Summary

Welcome, everyone at Basic-Fit's Fourth Capital Markets Day, and I welcome all of you here in Hoofddorp in our GXR recording studio, but also people at the offices or at home, watching this live stream. We have a very interesting set of presentations prepared for you today. But before I tell you more about that, I want to note that to point out the safe harbor applies as usually, you know the text. The text is also visible on the handout, which will be available online after the event. So who are the presenters today? It is our senior leadership team. You know these faces probably, but it's René Moos, our Founder and Chief Executive Officer; Erica van Vonderen-Hahn, our Chief Commercial Officer; Hans van der Aar, our Chief Financial Officer; and Rédouane Zekkri, our Chief Operating Officer. This is also the order in which they will give their presentations. And after the presentations of René and Erica there will be a short break. And after the break, we will have Hans and Rédouane doing their presentations. Then René will come back on stage for concluding remarks. And then we will have time for Q&A. We have 40 minutes for that. We don't want to really overrun that time because we also have some closing drinks and some bites and there's time then for the people here to have an informal discussion with all of us afterwards. The presentation can later on be viewed online and also the slides will be available online. This is the address where they will be made available. For the people online, you can watch this in live stream, but you can also choose to watch the slides or a combination of the 2 just hover with the cursor on the screen and you can select that option. So -- but now without further ado, I want to give the stage to René Moos for his presentation.

Thank you. Good afternoon, everybody, and welcome to our Capital Markets Day. Today, I would like to discuss the following topics: To start, we want to start with we are Basic-Fit. We want to look back a bit what we have done in the last 2 years since the last CMD and explain a bit more our business model, especially also for the newer people to the story. But I would like to start with a short video that we have made. So let's start with that. [Presentation]

Yes, there was a little film made by our head office staff, so we didn't hire any actors. But as you can expect from a low-cost company, we did with our own people. But this gave a short impression of Basic-Fit. So what are we? We are a low-cost operator. We have more than 1,400 clubs open. End of this year, we expect to be around with 3.8 million members and over EUR 1 billion revenue. We offer the affordable value fitness, and it is really our purpose to make fitness accessible to as many people as possible, so they can leave a more active and fitter and happier life. To achieve this, we make use of state-of-the-art technology, which you also saw in the film. And this allows us to be scalable and personalize our offering. It enables us to have this strong collective -- collect controlled growth and keep our costs low. So this is a slide where we show that we -- the focus point for Basic-Fit is to be the logical choice. And a logical choice to join a gym is when it's closed by. That is the main driver of people to join a gym if it is closed by. So growing the fitness penetration, it only is possible by opening new locations. And we do that in a cluster strategy. So for instance, if we have a city of 50,000 habitants, we open 2 clubs at the same time, preferably to always have a club close to where you live. Again, the main driver, a club close by. We can only grow fitness business this fast when you have a clearly defined simple and scalable business model with simply highly centralized straightforward processes resulting in efficiencies and that is only possible by a lot of automation. So we are able to run a gym with only 3 FTEs, only 3 people, but we can also run a club without staff. And that is crucially important to be able to open a lot of clubs close to each other. I think for us, it is also important to be cash flow breakeven on a low number. So if you compare Basic-Fit to the other fitness companies A lot of our competitors need 3,000, 4,000 or 5,000 members, some even 7,000 or 8,000 to be cash flow breakeven. Basic-Fit is currently cash flow breakeven on 1,500 members. Before our price index, it was 1,700 members. We are now currently cash flow breakeven on 1,500 members. And to be able to run the club without staff, you have to have smart cameras. This is a system we have been investing in for many, many years now, and it's a crucial part of our success. Having these software possibilities and camera possibilities, we can save tens of millions of euros in salary costs, and that is also what we're doing. But Rédouane will tell some more about this. Another strong point, I think, for Basic-Fit is that we really want to be entrepreneurial. To do that, we are working with outsourced services like personal trainers and physiotherapists. So at least, so they run their own business in our facility. So you have the entrepreneurial spirit in the gyms when you enter. And all of that gives us unmatched results. So when you look at this slide, I explain a bit what happened after our last CMD. We had some difficult market conditions. So again, we got confronted with the COVID-19. In the end of '21, we had to close down our clubs in the Netherlands again, but also if you look at -- and we opened it again at the end of January 2022. But for instance, if you look at Spain until the second quarter, of 2022, people were -- it was a must to wear mouth cap. Now if you've ever worked out in the fitness club with a mouth cap, but that is far from ideal. You've to have reservations, only little people allowed at the same time. It was complicated. So if you look at the COVID period for us, it was not only 2022 and 2021. But there was also the clubs that we opened in 2019 because if you open a club in July, August or October of 2019 and you close the business in 4 or 5 months later, it is a very rough start. And during the 2021 and 2020 years, it was open and close, open and closed. So it was not an ideal period for us. Also in France, we were confronted with a lot of social unrest, started with pension reform plans that was difficult time, to put it that way, and that really didn't help our joiners in the first half of 2023. Second half, it went more -- better. But also, we had lockdowns in China, blockade of Suez Canal, Ukraine and Russia, of course, the energy crisis, inflation, higher interest, currently Israel, Hamas, there's a lot of things happening. It is a challenging environment. But the resilience of our business, I think, and the ability to adapt to change have helped us through this. We adjusted our membership and pricing structure for new members only to increase the yields and to observe the impact of cost inflation in the coming years. We are a company that find ways to adapt to changes in the market. So even in these markets, we continue to increase the profitability of our business. Well, you're probably familiar with this slide. This is what we have showed you during the Capital Markets Day in 2021. So despite the headwinds I've just mentioned, we have achieved or remained on track to deliver most of them. To start with the Home bike, this was not a success. We started it just doing it ourselves, buying the bikes, storing them, delivering them. It was complicated. So we have decided to, in the future, do that with partners. while we will continue to help customers in the at-home part, but we will do that with partners. and we will supply the software to -- how to work with it. Another thing that we are still working on is the overhead cost. So excluding the marketing and currently still a little bit higher than targeted. we in-sourced a lot of critical technologies and invested heavily in our IT systems. We spent around EUR 17 million on IT this year, but this should result in future efficiencies. We will be focusing on operating leverage in the coming years. So we do expect to make progress in 2024 and 2025. We managed to open more than 200 clubs this year, but could have opened more but choose not to. And that is because of the context of the macroeconomic and geopolitical situation and prefer to have more cash or a better balance sheet, however you call it, and fewer clubs. We are therefore not on track to be at the 2,000 clubs by 2025, and that is a management decision. but we are on track, however, to reach more than 3,000 clubs by 2030. We also started the new country. Well, you all know probably now that is Germany. And we said something about the yield per member. It increased fast, and that was due to the price increase this year, of course, and also the higher uptake of the premium membership. We reported a leverage ratio of just over 2.5x with the half year results, and we are on our way to reach this between 2x and 2.5x target next year. Our midterm goal is to be below 2x and our long-term targets even further than below 2x. Maintenance costs continue to be stable at Club for EUR 55,000 a year on average. We did report the 3,300 memberships with our half year results, which shows the recovery of our membership base, and we also expect to end this year with 3,300 members on the mature clubs. The underlying EBITDA per mature club last year was strong and after the price increase resulting from the strong cost inflation this year, the profitability of clubs is improving. Also this year, the second half significantly higher than the first half, resulting in the targeted 30% return of invested capital. Hans will talk some more about this. Well, in this section, I want to share with you our growth plans. But first, what we have achieved so far. On this slide, we show the development of the club network over the years. This clearly shows that we are the largest and fastest-growing fitness chain in Europe. In 2022 and '23, combined, we grew our network with 387 clubs. This is an unprecedented achievement. Nobody has ever done that with own clubs. And that is despite all the things that happened in the world. In the coming years, we will continue to grow. And with the flexibility in numbers of club we open, we will end up at a targeted 3,000 and 3,500 clubs in 2030. If you look at the European fitness market, you've probably seen this slide in the past. It shows that there's a lot of room available to grow our markets, particularly when you compare it to the U.S. market with 22% fitness penetration. Now if you look at our members. On this slide, we show that the developments since 2016, when we had a magical change of growing to over 1 million customers. That was 2016. And in Q1 next year, we will -- quadrupled that amount, and we expect to have more than 4 million membership in Q1 next year. Memberships are, of course, crucial. But ultimately, we focus on return on invested capital as we can steer revenue and EBITDA. The thing is we can reduce membership prices, resulting in more members or increased membership prices, resulting in fewer members. With the price increase this year, we expected 6% to 7% few joiners and we think this also happened. But more importantly, that decision led to our increased revenue and EBITDA results. The cannibalization impact of premium is a bit harder to assess as we do not know yet the increase of length of stay of these members and the lead generation impact. We do see that it resulted in significant higher visits numbers of up to 20%. So we currently have 20% more visits than, let's say, 2 or 3 years ago. So we'll have to see in the coming quarters if current price structure and focus need to be tweaked. If you look at the potential in our current countries, -- the growth potential in our current countries remains unchanged big. In the Benelux, we believe we have the opportunity to increase the club count to 700. France, we can open another 400 new clubs and get to 1,200. In Spain, the total potential is up to 700, while Germany, we think we can open a total of 900 locations. So we clearly believe that we can grow our network to between 3,000 and 3,500 in our current countries in 2030. So in the next 7 years. And it's important to understand that this is not the end of our growth story. If you look at acquisitions, the past couple of years, years, we see more peers coming to the market looking for a strategic partner. Also a lot of peers are owned by private equity and are looking for an exit, and there are currently not a lot of buyer with a high interest, et cetera. So pricing is coming down. Consolidation in the market is going to happen, and we want to be part of that. We have always been opportunistic and done acquisitions in the past, like Fitness First transaction. So when the price is right and the returns are right, we do want to do an acquisition. But to be clear, we only do an acquisition with 20, 50, 100 or 150 clubs, if you can get it in a healthy finance way, we will not give out shares unless it is an extreme sweetheart deal, but we should be able to do it with our own cash flow or with bank loans or we rather postpone the acquisition and grow on our own balance sheet with new openings. We do have EUR 150 million accordion facility available, which we can request at time and which has no specific earmark. But of course, we will continue to focus on organic growth. That is the company we are. We want to look opportunistic to the market, but this is really our focus. We have a strong track record of successful club openings as we are in control of our cluster strategy and know in advance what we expect in terms of memberships and returns. Goal is to grow our network to more than 3,000 clubs in 2030. I don't want to give a specific yearly country opening goals anymore, because of competition. But also because we need to be able to adapt to macro developments and manage our balance sheet. And we get a lot of calls undergoing a bit slow in Germany, for instance. So we will not get those calls anymore. But we do give guidance for 2030. Again, we want to be between 3,000 and 3,500 clubs. But I think I said that already. So we aim to be the clear market leader. In the past 10 years, we have conquered these 4 countries step by step. In countries like Belgium and France, we were the main driver for growth in fitness penetration in the past decade. Spain is on its way. And based on our strong market position and our systematic approach, Rédouane will talk more about that, we are well positioned for further growth. From this strong position, growth will even be easier to realize than in the past. Now let's look at our French club network. And to show you what we have done in France. As you can see, in 2013, we only had 9 clubs in France. It took us a few years before we start opening on a high pace. In the first 3 years, we opened 25 clubs in total in France, including an acquisition of 9 Health City clubs. And we kept opening clubs at a higher pace since then. In Germany, we will open around 30 clubs in the first 2 years. The speed of growth, what happened in France is also what we will do in Germany. So talking some more about Germany. Germany has a huge growth potential, a country with 83 million, 84 million inhabitants and a finished penetration of only 12%. There are many similarities to France. with also a highly fragmented market. In Germany, a lot of people live outside in the city, not as many as in France, but still much more than in Spain or the Netherlands. We will accelerate openings in Germany in the coming years. and Rédouane will talk about this some more in his presentation. Well, this is exciting news, we think. We are currently exploring the opportunity to also adapt the franchise model. We believe we have the scale now and the advantages with our own technology and knowledge, which we can lever in a franchise model. We have always preferred growing organically for all the reasons I just mentioned before. But we have now reached a size with a proven model that we believe franchise can help us in the next phase of our growth. It requires limited CapEx and opens up possibilities to go to other countries and continents. There are 3 possible outcomes. We can start our own franchise business. We could acquire a franchise operator or collaborate with an existing franchise chain. Within the next 12 months, we will take a clear view on our strategy towards adopting a franchise model going forward. As I said, we believe we have the knowledge and technology that could really benefit the franchisees. We have a strong package we can offer. We have a technology that will help the franchise to work with limited number of staff, automated sales funnel, QR codes access, virtual solution and much, much more, but especially all the software. Everything you need to run a fitness club. We have in-sourced. We do -- we've built ourselves. So membership, an app, direct debits, we do everything on our own software. So here are just a few examples of what we have to offer, and we have it. It's available. And we're not planning to go to 3 continents at the same time. So it is just putting it to work while we have it and we think we can really grow fitness also in other continents. That's why we believe we can be successful with it. but more to now and today. So the driving of the profitability. In the next part, I will tell more about how we will drive profitability. If you look at the slide, you can see the pricing perspective from us with the #2 in that country. We are and will stay a value for money chain, and we continue to offer a highly affordable fitness service, and we want to make fitness accessible to all. As we show here, we continue to be significantly cheaper than our main peers when compared to our Comfort membership. But the actual difference is much higher. This is not a fair comparison because memberships include more elements than that of our peers. Ranging from 24/7 openings in the Benelux to much more club locations in all countries and digital and live group classes that are included in our price. And then we are still between 14% and 17% lower in price despite the EUR 5 price increase earlier this year. While we are the lowest price option, we are cash flow breakeven again with 1,500 members when looking at the last few of vintages. Another important development, the yields. In the past years, we have seen an increase in average revenue per member. started with the change in payment plans from once a month to every 4 weeks at the end of 2018. The introduction and focus on higher uptake of the premium membership, the next phase. And this year, we had the room to increase the price of the basic membership, the basic membership is using One Club for 1,999 to 2,499 in February, March this year for the Comfort membership, and then you're able as a member to use all clubs in a country. All these changes resulted in a yield per member amount from less than EUR 20 in 2018 to more than EUR 23.50 this year. But as I said before, higher prices do have an impact on joining numbers. And this is for new joinings only. as we only increased the price for new joiners. This is also the reason of increase of yield in the coming years, all members with a lower yield leaving and new high-yield members joining. If I go to the next topic, I want to start again with a short film. [Presentation]

So we have started with smart refurbishing. A new agreement with Matrix to extend the economic lifestyle of our equipment. After 6 years, we do no longer replace all the equipment but refurbish it and just partly renew it. In 2 weeks' time, a club will have a complete new look and feel, and clubs will look as new as you put in the new equipment. Also, the guarantees for the next 6 years are back in place. With that, our maintenance CapEx will remain on EUR 55,000 a club a year until the end of 2030. Some refurbishing is good for Basic-Fit but also good for the planet. And it's also good for our customers because in this new contract, what we have changed is that instead of the 6-year contract with Matrix coming once or twice a year. They are now coming in this new contract every month. So they visit all clubs every month, 12 years in row. So that means it will take less time if something is broken or doesn't look nice to be replaced. So it is good for also definitely our customers. Now we go to the final section. I always say this is just the beginning because that's also how it feels. We have a long track record of growth and adapting to changing environment. So we started with only tennis facilities and adapted to the increasing demand of fitness and started first with high-end fitness. So tennis, restaurants, kids day care, swimming pool, wellness, et cetera. We then saw that the fitness was growing faster, and we changed to Health City. mid-market fitness, EUR 50, EUR 60. And we grew there to 250 locations in 7 countries. And so that the value for money was a better player, the better game to play and also the model that was more easy to roll out. So we move from Health City, we did a successful transformation to the Basic-Fit model. With fitness becoming the core of our offering, we start to really improve the business, the model, the services and follow the fitness trend. So we adapted to macro conditions like the recent higher interest, energy, inflation, et cetera, but also services to members like the virtual at-home services during Corona, and we will continue to adapt and make sure the organization is set up for change and a bright and successful future. If we go to my last slide, I think what we have built is a unique business model, breakeven of 1,500 members, and we can run a club without staff and a fully automated customer journey. Good at what we do and getting better every year. I think we keep the focus on innovation and cost control despite the current challenging external environment. I said a few times before, we will grow to 3,000 and 3,500 clubs by 2030, and we're exploring additional growth opportunities through franchising. Well, that was my presentation. I would like now to hand over to Erica.

Thank you, René, for the introduction. And welcome, everyone. Great to see a lot of familiar faces again. Today, I will be talking you through our leading commercial strategy. And for me, today will not be about a lot of new things, but really about keep getting better at what we do. So before I start presenting, let's start with a video about my favorite topic, happy members. [Presentation]

So more happy members. Today, I will be talking you through how we do that. Most importantly is our unique positioning that really differs us from the competition. Secondly, we have very data-driven insights, and we use all of that data to fully utilize our members. Then we use that data to make a tailored offering for our members. So we really make the best experience. And all of that we use to drive success. And of course, I'll close off with a few takeaways. So let's start with our unique positioning. What gets us up every day is making fitness accessible to everyone and get people to love their fitness habits. This has not changed since 2 years ago because we firmly believe that this is still relevant for our consumers. We have a lot of tactics to bring this positioning across to our members and one of them is our new campaign. Let me show you our new campaign. [Presentation]

So our campaign is really made to be there for everyone, but also to lift the key category drivers of the markets to get people off the couch and experience the energetic after glow. Of course, this is just a small video that you've seen, but this has translated into all of our countries into all different assets, all different media types to really get our messaging across. And for the ones that really paid attention, we've also launched a new sonic logo and a sonic anthem. So the song you've just heard is really something to lift our brand. It's shown that goods sonic logo will increase the buying intention, but it will also increase the brand perception. We've launched it together with these dancers that you see on screen and the video went viral. So across all of our countries, everyone is really doing the dance on our music, and we had over 6 million impressions on social. And the campaign is, of course, not the only thing we do to lift our brand equity. We have many activations throughout our countries to really be distinctive to really make people interested in our brand. I'll share a few examples with you. The first one is the spoken word artist. This was a word artist in the Netherlands, and we asked her to write a poem about making fitness your basic. She did an amazing job in really lowering barriers of fitness, and we had over 3 million views in the Netherlands only. Then we have the Tramhalter experience. We really the activation outdoors where people at a tram could really lift weights. And by that, we are actually really making people engage with our brand. So this was actually 2 weeks ago also in Belgium. And we already have 2 million views on that as well. And then we have our Fit books. which is a box that we place throughout our countries everywhere to really make fitness accessible to all at any time. We placed it at festivals, et cetera, and it's really an engaging way for our brand as well. And lastly, our bag. So our bag is -- with the distance, the most iconic brand assets that we have and we blew it up in the center of Madrid. And we asked an artist to really paint it and really engage with the bag live. So there was also a great way to lift our brand equity. Another initiative we launched this year is to boost the ingrowth of our clubs. Founding members. So there's really an automated process now that starts a few weeks before the club opening with presales to really boost in-growth. And we're already seeing great results, but we're really testing and optimizing. And Hans will dive into the results in his presentation. And all of these initiatives, of course, they cost money, of which we are fully aware. We're always busy optimizing our marketing spend. And I think in 2015, we started to really reduce our cost per acquisition to really make sure that we are most efficient, but by being too efficient, we also saw that we were missing out on market opportunities. And that's also costing money. So in 2022 and 2023, we're increasing our spend slightly again as long as we stay below the effective cost per acquisition. The total marketing spend stays around 5.5% to 6% of our revenue. That is still relatively low. A study by Gartner showed that the average across all industries is around 9.5%. So this is still relatively low. So how do we spend that marketing? Around 20% of our marketing spend behind the scenes. So for technology development, for creatives, everything that's behind the scenes. But we really try to get as much as possible across to our members or our potentials. So here, you can see a snapshot of our really dynamic landscape, like, for example, Instagram, YouTube, we use all different media channels. And it's all very data-driven. So we have media mix modeling in place to really optimize our different media tactics and really understand what would be the best result for our brand or our sales or a combination of both. So, what I've already shown you is that the marketing is very data driven, but we don't only do the marketing very data driven, but we also use it to really be data-driven with our members. Understanding our members is at the core of everything we do. And we know our members. Because we have so many members, we can really extrapolate all the data that we have across all of the members. and utilize the data to do predictive modeling to really understand what their needs are and really drive on that as well. And we help our members. So AI is a great tool to really optimize the experience of our members. Some things that we are working on right now is, for example, the personalized workout schedules. With AI, we can really make them personalized for every different target group that we have. Secondly, we can predict which equipment they would use and also have they scan it and then make a personalized training schedule based on that. And lastly, we use it to improve our chatbot. So this is already live since a few months now, and it's really optimizing how customers are helped by using the chatbot. And our members rate us after every visit. So after every visit, we ask them how their experience was and how we can optimize our clubs. So based on that feedback, it is directly sent to all of our regionals and our clusters, and they know exactly how to improve their clubs. So it also creates a sort of positive competition between our regionals, right? So that is really helping us to understand how our clubs are performing locally. And it goes way beyond that because we have a 24/7 interaction with our members through the app. We are in their daily lives because they also use the app at home, they use our services at home. So it extends way beyond that. And because we are 24/7 part of their life, we can also really predict what their behavior will be. So when we see a member is falling out of habit or when they are losing one of their visits, we try to nudge them. We try to reactivate them. Send them a message via e-mail, sending them a gift actually also. And then we can see that they're actually coming back to our clubs. So of course, that's delivering more active members, and we really do AB testing, and we can see what the impact is of the activations that we do. And it's not just about our members, but also about growing the market, right? Like René already said, we really want to increase that fitness penetration. And to be able to do that, we have to understand the full market. So we do a lot of neuro research. So we really dive into people's brains to get an understanding what actually really drives them. But we also do panel discussions. We do quarterly research. So we do a lot to get as many insights as possible that we can really act on. And of course, we don't know everything, but we really try to do as much as possible to get an understanding of our consumers. And then all that we use for tailored offering. Because we understand what our members' needs are, we can really tailor the offering specifically to each customer. And the positioning is also translated into our clubs. So a few examples of what we have launched this year, what we invested in is, for example, the Relax & Recover area, the workout hubs, the body analyzer and something that we're launching in the coming months is Be Comfortable because we saw the biggest barrier not to join a gym is actually that people don't feel comfortable. So we really want to activate that and make people feel comfortable in our gyms. So we have a few activations that really boost feeling comfortable in the gym. And also, we're continuously testing with innovation. So for example, you can see the box outside with a 3D player. So once you go for the break, you will see it in [ old way ]. And our members need actually go way beyond that physical club. They want to be a part of the community. They want to be helped so much. So we have a lot of programs that we develop, personal support that we develop, inspiration, information, we really develop a lot of things to help our members. And the great thing is that we are not developing it for 1 club, but we are directly developing it for all of our members. And most of that we create in our own studio. So of course, we are here in our studio. And this gives us the agility to make anything today or tomorrow and really create an offering that our members are looking for. So, one example of what we've produced here, but of course, it's a limitless list of what we produce here. [Presentation]

So because of everything that we produce, the offering goes way beyond even what people expect from premium clubs, right? So, it's not just about our product offering, but it's also about happy members and making sure that everything they do is as easy as possible so they can focus on their workout. So we created a department that is continuously working on preventing cases. So they're continuously trying to remove friction with our members. And we can already see a great result because we went from 7 cases per 100 members to -- now we're around 4 on average. So creating less cases also means that members are more happy which is, of course, also good for retention. And investing in its self-service department, investing in the chat bot et cetera, also really delivers great results for our customer care. So having less cases per 100 members, we were able to achieve that. But also the cost per case went down. So we're being more efficient in our cost for customer service. We did that by having more efficient staffing, having better staffing, doing something outsourced. So we did a few things to really optimize cost. And also what we're very proud of, our resolve duration time went down by 2.4 days, being now at an average of 1.2 days, a bit over 1 day, which is really great because our members are being helped quicker, our costs have gone down, and we have less cases. So that's really a win on all aspects. And a way to measure how happy our members are is, of course, by our Trustpilot scores. Because we know so well what the feedback of our members is, we are able to continuously optimize the clubs, and we can directly see a result. So we also saw that this year, we were again at the 3.8 score, which we're very happy with. And I've just shown how satisfaction is going up again, but actually, it's all about driving success. So it's not just about happy members. Of course, it needs to also deliver success for basic fit. And like René already said, we are increasing the yield per member year-over-year. Apart from the price increase, this can also be explained by our higher uptake of premium. And premium is something that our members were really looking for, being able to support together and being able to train everywhere is something they really value. This graph shows how we are continuously optimizing, testing and improving our offering. So you can see that we were around 25%, 26% of premium, and we're now around 55% uptake of premium. By continuously doing small improvements, showing that it works and then working on another improvement showing that it works and now we're around 55% of joiners that are taking premium. And of course, we also focus on upsell. It's not just about upsell, but also if members spend more with us, they are more engaged and because of that, they will stay longer. So we really try to upsell to premium or younger or our other products as much as possible and get a better yield. And another way to boost the revenue is, of course, by secondary revenue. We launched our NXT Level sports nutrition brand now a few years back. And this year, we're very proud to tell you that we are passing the EUR 10 million mark in revenue for the first time. So we can really see that if we invest in something that is really resonating with the market, it's also delivering results. At the break, you will be able to try out some of the products, and I hope you like them as much as we do. Secondly, it's advertising and partnerships. So brands like [indiscernible] Gymshark, H&M, they all advertise on our screens. So they also really see the value of the members that are in our gyms. And we can see further growth in the coming years in that pillar. So it's, of course, not just about increasing yields, but also really growing the market. One way to measure success is by measuring our gym intention within the market. We can see that over 50% of our mature markets, over 50% of the members are really wanting to go to Basic-Fit. So we have a brand preference in the gym intention of over 50%, and we can see great growth there. And this is already one of my last slides, but we are finally the strongest brand in Europe, and we're still showing double-digit growth in all of our brand metrics. So that means people think of us first when they think of gyms. That means they prefer us when they think of a gym. And that even means that they prefer us compared to more premium propositions. So having these extremely high brand preference numbers really helps us for future growth as well. And with that, I already get to the conclusion of my presentation. So what I think is really important is to conclude to recognize what truly sets Basic-Fit apart in this dynamic growth. Our influence reaches beyond the gym goals into the daily lives of our members, grounded in a culture that thrives on data and innovation. Every scan into our clubs, every weight has lifted, it's all contributing to our goal to make fitness accessible to everyone, ensuring success stories with happy members. We don't just follow trends, we set the trend. We don't just gather data, we empower transformations. And we don't just open a lot of gyms, we are opening the doors to a healthier and fitter Europe. We're not just Europe's leading fitness brand but we are the architects of a fitness revolution. Thank you very much, and see you after the break.

Yes, I want to pay your attention one thing. We have a very interesting next level stand outside this room. So I would like to invite you to take a healthy protein shake. They're really nice to drink, so enjoy and see you in 30 minutes. [Break]

Okay. There's some -- still some people at the toilet, I think, on restroom because I see some empty chairs which has to do with me. Okay. Thank you, everyone. Unfortunately, I don't have a video. So you have to do it with me. But I'll bring you to all the numbers that you're waiting for. So I hope you will enjoy my presentation. And I also hope that you enjoy the first part of our CMD with Erica and René telling great stories about our achievements. And it's also good to see so many familiar faces. So welcome to [indiscernible]. And now show you the agenda. In my presentation, I will give you an update on recent events and followed by an update on finance and club economics. And I will end with some ESG matters, and of course, the key takeaways. First, the recent events. As highlighted, and I'll show the slide, as highlighted on the slide, well before the end of the year, we have reached a milestone of 1,402 clubs. This signifies a growth, a net growth of 202 clubs. And for the record, I expect to end the year also with 1,402 clubs. Throughout this year, we continued to strengthen our market dominance in Europe. In 5 of the 6 countries, we are a clear market leader. Redouane will tell you more about our growth pace compared to our competitors in the several countries. In France, we added 133 clubs, bringing our network to 780 clubs in total. This is an impressive growth of 21% compared to last year. In Spain, we actually achieved a remarkable milestone last year by adding 34 clubs, establishing our market leadership in that country. In 2023, we grew even faster, opening 50 clubs to our network, now totaling 140 clubs. An important element of our Spanish strategy is opening cluster clubs as to build and strengthen those clusters and aiming to become the logical choice for members and people to work out in. In Seville, for instance, we currently operate 8 clubs or 10, if you include the nearby cities. In Valencia, we have grown our cluster to 13 clubs, and we have plans to add more in 2024. In Málaga, where we relocated our headquarters, we now operate 5 clubs. In the mature countries, the Netherlands and Belgium, we expanded our network by 7 and 3 clubs, respectively. In our new market, Germany, we opened 9 clubs. For more insight and set of our plans for Germany, I invite you to listen to Redouane's presentation. Let's move on to the next slide on membership growth. As illustrated on the chart, since our previous Capital Markets Day 2 years ago, we have observed a robust recovery in membership, surpassing 3.7 million by the end of September this year. In France, we experienced some headwinds in the first half year, as explained by René. In the third quarter, the joint development was more normal. Before the break, Erica shared inside about our founding member campaigns when we open new clubs. We are currently in the process of analyzing the long-term impacts. Preliminary findings indicate that these campaigns are hugely effective in non-cluster locations and result in a lower initial losses due to the higher volume of membership upon launch. Unclear yet is the longer-term impact on length of stay and membership counts at mature clubs. We do expect, however, that founding members will stay a member longer because of the low membership fee. We will continue to monitor the developments closely. Our churn rates have normalized to a rate of around 4% on average per month since Q2 this year. Later in my presentation, I will also explain more about churn trends. And again, we expect to end 2023 with 3.8 million memberships. Let's move on to the next slide on Premium memberships. As demonstrated by our data, our penetration rates surged from 23% in 2021 to an impressive 44%. This substantial increase is driven by an ongoing Premium membership uptake of more than 55%. The key driver behind the higher uptake percentage is the high value of the Premium membership, which allows members to bring a friend any time they visit the club. Due to the high takeup rate, we anticipate a further increase of the Premium membership penetration rate to more than 50% in the end of next year. We do see a cannibalization effect on overall joiner numbers due to the higher Premium membership uptake. The number of visits of Premium members with their friends are significantly higher than Comfort members. But it's difficult to assess what the actual cannibalization impact is. At the same time, we can also not yet determine what a positive impact after Premium membership on length of stay and the effect as a lead generator. However, the effect on our yield is clearly positive. All that being said, we go to the next slide on our yield development. You already saw the slide with the presentation of René. So as we said, our yield development is promising for the coming years. I would like to mention a few key elements that contribute to this expected increase. A significant impact on our yield comes from changes in our membership structure since the beginning of this year. With the reintroduction of the Comfort membership for EUR 24.99 per 4 weeks for new members, this is a EUR 5 increase compared to the basic membership it's replaced. Also, the increase in the Premium membership penetration rate has been contributing to the high yield per member. With a high takeup rate, the Premium memberships in the base increased from the low 20s in '21 to close to 44% today, and it will continue to increase in the next couple of years. When calculating the yield, one has to take into account the promotional offers that members get when joining. These promotions are factored into the yield calculation of the duration of their contract. Typically, onre year. So that means that the yield per month in the first year per member is lower than after the first year. Because of the recovery after COVID, we had a relatively large percentage of members that was in contract. The normalization of that percentage this year is positive for the yield going forward. Of course, a negative impact on yield are the founding member campaigns. Founding members get a significant lifetime discount when they become a member before the club has opened. When comparing our conservative guidance for 2024 and for at least EUR 24.50 with the yield achieved into the pre-COVID year 2019, our yield will be up with at least 20%. Let's move on to the next slide on revenue. Well, you know these numbers. In the first 9 months of this year, our group revenue increased by 36% to EUR 765 million. What I really want to emphasize is that thanks to the combination of a strong membership growth and yield growth, our annual revenue has doubled in just 4 years, despite the challenges both by 2 years of COVID measures. While actually the next slide is one of my favorites, it shows our track record since our IPO. Those of you who have been following our journey will recognize this slide. We have extended the period including 2023 based on our guidance for a number of clubs, memberships, revenue and underlying EBITDA. Even amid the challenging times brought by COVID, we have managed to maintain a compound annual growth rate of around 20% for these key indicators. I must say not a bad achievement. I will now proceed to the next section of my presentation, focusing on finance. Finance. On this slide, you can see the amount of free cash flow we generate before investing in expansion of our club network. And we define free cash flow as underlying EBITDA, minus maintenance and other CapEx, cash interest and cash taxes. Our business model with clubs being mature in year 3 with a 30% plus return on invested capital results in a fast-growing network of cash-generating clubs. In our recovery year 2022, before capital expenditure on new clubs, we generated well over EUR 100 million in free cash flow before expansion. And we have been reinvesting the free cash flow and our expansion, but we always have the flexibility to adjust the pace of club openings. For example, specific macroeconomic condition could be a reason to temporarily reduce the number of club openings. Throughout this year, we have concentrated on mitigating the impact of cost inflation on our results, such as rising wages and a one-off surge in energy costs of more than EUR 40 million. The gradual increase in our yields during this year has been instrumental. As a result, we expect to generate more free cash flow before club expansion that we did in 2022. Looking ahead to '24 to '26, we should continue to benefit from a further increase in yield, growing membership base and significantly lower energy cost per club. Although be aware, we do not provide any guidance for EBITDA for these years. We do want to highlight a strong increase we foresee in our cash-generating ability before new club expansion. In the slide, we show you a high, low range in millions of euros that we think we can realize in these years. From a level of around EUR 2 per share in 2023, we think we can more than double in the next 3 years to a range of between EUR 4.30 and EUR 5 per share. Well, the next slide is about our maintenance CapEx. As René mentioned earlier in his presentation and he also saw -- showed a video about that, we anticipate maintenance CapEx to remain at EUR 55,000 per club until 2030, thanks to the Smart Refurbishing. Furthermore, within our financial framework, minor maintenance expenses aimed at maintaining the club fresh look, which are categorized on the club operating costs. We project this cost to be around 50,000 -- EUR 15,000 per club per year. And these costs include items such as minor painting, dent repairs, maintenance of cooling and heating systems and consumables such as lighting and sanitary supplies. And to help you with your DCF model, this is for the analysts in this room. Also, thanks to our Smart Refurbishment, we expect the average annual maintenance CapEx of mature clubs in the full replacement cycle to drop from around EUR 75,000 to around EUR 62,000. What I mean with full replacement cycle is when all clubs are all mature and have started to replace fitness equipment, and there's no dilution for newly opened clubs of maintenance scopes. For us, the Smart Refurbishing is a real game changer. If you just multiply the 30,000 difference by 3,000 clubs in 2030, that means CapEx savings of almost EUR 40 million per year. So let's move on to the next slide on club CapEx. We've seen this slide before. So this slide provides insight into the average building cost per new club. For this year, we anticipate these costs to be EUR 1.2 million with a modest increase to EUR 1.25 million projected for 2024. Our clubs vary in size and locations. Some are larger or situated in more expensive city centers, while others are more budget-friendly regional areas. Despite these differences, our guiding principle remains the same, achieving a 30% return on invested capital, ROIC. The limited increase expected in 2024 and 2025 compared to this year is due to cost inflation as well as fewer regional club openings and a higher number of clubs in city centers in Germany. Thanks to our scale and technology, we continue to have the best prices and terms in the industry. During Redouane presentation, you'll get a glimpse of our latest cutting-edge technology developments, showcasing our commitment to innovation and excellence in the industry. And the next slide shows our club openings pipeline. Well, this overview should look familiar to most of you, I want to emphasize again our flexibility with the timing of openings. We can adjust our club openings as needed, especially in case of potential M&A transactions and/or macro developments. I will now say a few things on corporate overhead. Corporate overhead costs consist of marketing spend, which Erica explained, and the expenses incurred by both company and regional headquarters. It is worth noting that customer service costs are included in the headquarter expenses. In the medium term, we anticipate maintaining marketing spend with a range of 5.5% to 6% of group revenue. Additionally, we expect headquarter costs to decrease to a range of between 6% to 7% compared to around 8% in '22 and in the first half of this year. Since our previous CMD, we have made big investments in the further profitalization of our head office. Because of the growing reporting requirements from Brussels, particularly in areas such as CSRD and taxonomy, we have been and will continue to invest in additional resources and tooling. Significant investments were also made in upgrading our IT system to manage the increased scale and complexity of our operations. Examples here are the implementation of SAP and Workday. The upgraded IT landscape will result in future efficiency gains. Furthermore, we anticipate achieving greater efficiency in customer care services. You might recall Erica slide illustrating the positive trend in cases per 100 members. Well, the next slide is about our new energy department. Well, the war between Russia and Ukraine, which started in February 2020, led to a surge in energy prices in Europe. You all know that. While we had already been working on plans to reduce our carbon footprint, as we explained during our previous CMD, there was now an even greater need to focus more on our energy costs. So we established an energy department to reduce our energy consumption and to fix our unit energy prices at favorable levels. In 2023, our energy department became fully operational. I will now walk you through some of the department's initiatives. We are in the process of expanding the installation of our remote facility system in all our clubs. This will allow us to monitor and reduce energy consumption more effectively in our clubs. We have been fine-tuning our energy purchasing strategy, aiming to fix prices or adapt as the markets keep rapidly changing. We're also sourcing renewable electricity from the grid as this helps lowering our carbon footprint. Another project, which helps our carbon footprint as well as our energy costs, is the transformation of all natural gas installations into electrical installations in our Benelux clubs that still use natural gas for heating. Lastly, we are investigating the installation options for solar panels on our head clubs and headquarters as this will help us reduce emissions and costs. These initiatives, together with several other initiatives, will result in lower energy consumption and less cost volatility going forward. Previously, we have guided to the market that we expect annual energy cost per club of EUR 35,000 for both 2024 and 2025. This is a strong decrease from the EUR 55,000 we have this year. For 2024, we have now fixed 80% of our expected consumption. For 2025, we also had 100% of the French consumption and of the group more than 60%. In this year, we have made a good start in reaching the targeted 20% reduction in energy consumption. Due to the external influences of weather on our consumption, it's difficult to assess the actual savings, but we have seen positive results coming through in the past few months. I will now take you to a slide on our financing structure. Well, we have a solid financing structure. In the short term, we have limited debt repayments. Earlier this year, we repaid the last installments of the government-backed facility. And in '24, we will repay the last EUR 80 million of our German bond loan, the [indiscernible]. In June of this year, we announced that the successful completion of an amend to extent of our existing term and revolving facilities agreement. The new agreement compromises a EUR 250 million term loan and a EUR 400 million revolving facility, totaling EUR 650 million. Additionally, and this is important, the agreement includes a new uncommitted revolving facility accordion up to EUR 150 million. There's no specific earmark for the accordion, and we can request for the accordion at any time. So we believe we have sufficient available liquidity to finance our growth plans. The maturities of the facilities were extended from June 2025 to June 2027. We have the option to request further extensions by 1 year in each of the coming 2 years to ultimately 2029. The average interest rate we pay on our loans are a mixture of our drawn bank debt, for which we pay Euribor plus a margin. The margin is around 2% and the Euribor is for EUR 100 million, EUR 150 million hedged. Our convertible bond loan has a 1.5% coupon. Of our total debt, 50% has a fixed interest rate of 2.2%. The average rate on all our interest-bearing debt at the moment is 4%. Our net debt to adjusted EBITDA ratio with half year results, which was 2.6x adjusted EBITDA. And our midterm leverage [indiscernible] target is below 2x. I will now talk you through my slides on our club economics. We consider a club mature, it has been opened at least 24 months at the start of a calendar year. That means that roughly speaking, clubs are accounting for as mature in our reporting after approximately 30 months. During these periods, these clubs enjoy at least 4 to 5 periods in which people massively join fitness clubs. These are the start of the year campaign and post-summer vacation periods. New clubs need this in-ground period to expand their membership base to a level at which they can achieve a 30% or higher return on asset capital. This slide illustrates the trend in average membership per mature club over time, alongside the actual number of mature clubs reported in their respective periods. To remind everyone, during the COVID period, we temporarily adjusted our definition of a mature club and only included clubs that are already reached maturity at the start of the first lockdown in March 2020. This is why you observed a significant increase in the number of mature clubs in 2023 when we returned to our original definition. At the end of September this year, mature clubs accounted for 64% of our club network. In the first 9 months of this year, these mature clubs generated almost 80% of group revenue and an even higher percentage of underlying club EBITDA. The average numbers of membership at the mature clubs is around 3,300 in this year. Short term, we expect some impact from club mix and a high uptake of the premium membership, as I explained a few slides ago. Medium term, so in 2, 3 years from now, we expect the average number of membership of a mature club to be around 3,250. In the next slide, I will explain more detail our ingrowth trends and what does imply for our club unit economics going forward. I will now start with a slide dealing with regional club openings. Now before you wonder, does it not actually mean clubs because that's the term I used in the talks with you? Well, yes, it's the same. But for the sake of uniformity with Redouane's presentation, I will use the term regional because, actually, it's the wording that Redouane already used at our first CMD in November 2017. As part of our plan at that time to grow to more than 600 clubs in France, Redouane told you that after first focusing on the bigger cities, the larger Paris region and Paris itself, Step 4 would be to open clubs in the smaller cities in France. With this, Redouane to regions. You know that by now, we already operate close to 800 clubs in France with plans to add more than 100 more. Slide 20, and this slide shows you the percentage of regional club wide openings since 2019. As you can see, there has been a steady increase in regional club openings over the past few years. If you consider that the bulk of these openings are in France and only a handful in Belgium, it implies that in France, these percentages are much higher. In this year, roughly half of the opening in France is a regional club compared to 1/3 in 2022. As a reminder, the regional club is only opened if we expect it to achieve a 30% plus return on invested capital at maturity. The main differences with a nonregional club in terms of club unit economics are the slightly lower initial investment to build the club and in OpEx, the much lower average rent compared to the group average. The last element means that we can open very profitable clubs in regions where we need fewer than the usual mentioned 3,300 members to reach our ROIC target. I'll now take you to 2 slides on club ingrowth trends. There are a lot of lines there. The first slide shows the membership ingrowth trends during the first 24 months of the 3 COVID vintages combined in the 2022 and 2023 club vintages. The COVID club vintages include 2019, 2020 and 2021. These vintages were significantly impacted by 2 years of COVID restrictions. As a result, they did not show the normal ingrowth pattern. The 2019 vintage, at least for the bulk of the clubs, had a good start, but were also impacted by the COVID measures in the first important 2 years. So all 3 vintages, it will take longer to reach their maturity targets. How long? I can't say, but it will take longer. But we believe that they will get there eventually. This belief is supported by the fact that these clubs continue to add membership. We also did not change our site selection criteria for these vintages, and the high demand for fitness is unchanged as well. When we look beyond COVID, the 2022 vintage had a good start, but does feel the impact from a combination of the price increase we did in 2023, the jump in a Premium membership uptake and the headwinds in France in the first half of this year. The 2023 vintage is dealing with the same elements as the 2022 vintage. In addition, the fact that we have opened more regional clubs this year translate in a lower maturity membership count for this vintage. The stronger start of the 2023 vintage is thanks to the final member campaigns that we did in a large number of our new clubs. But if you look at this slide, you only see a part of the story. So let's go to my next slide with the monthly underlying club EBITDA for the same vintages during the first year of ingrowth. In this slide, you see the same vintages as in the previous slide. I will zoom in on the performance of our 2 most recent vintages. In spite of some lower membership ramp-up trends than historically for the reason I just explained, they do tend to grow to become cash flow breakeven even in month 7. The 2022 clubs benefited from a strong post-COVID catch-up. The performance of our 2023 clubs is actually quite remarkable as they had to deal with much higher operating cost right from the start. However, the start-up losses in these clubs are significantly less, and they are cash flow breakeven in month 7. And this is the result of the price increase and the stronger start in memberships at the time of the opening due to the founding member campaigns and regardless of the lower membership fees of these founding members. It's worth noticing that our new club reached cash flow breakeven around month 7 when an average number of membership at 1,500. I'll go back to the previous slide. You see there the at the month 7, we only have less than 1,500 members, and we are already breakeven on that level. So that means with the price increase that we had, we are already breakeven at 1,500 members. And in 2023, it's even lower, thanks to the large number of the regional openings that we did. I will now take you to 2 slides that deal with our churn trends. If someone is checking the slide, so I'll wait till I go to the next slide. This slide shows the trend of the members that are out of contract. I will try to keep my story here as simple as possible. Members who are no longer in their contract period are able to leave. In our industry, a meaningful part of members leave when the contracts end. Those who wish to do so, don't do that all immediately after it ends, but a large proportion of these members does it right away. And that means that if you trail a period of large joiner numbers, a year later, you can expect relatively high churn levels. Since 2022, the year in which COVID restrictions were lifted, the percentage of members that are out of contract have been growing. And what this chart shows is that we are now back to an average level of members that are out of contract compared to the situation before COVID, which we consider our benchmark. And if we go to the next slide, you see that the churn rate has also been growing since 2022. But the average churn rate in 2022 was still well below the 4% we experienced before COVID with -- while the rate we see for this year as a whole is now in line with the 4% rate before COVID. The increase of the past year is the result, of course, of the relative high number of joiners in 2022, who could start to cancel their subscription in this year. Apart from a small shift in the timing of churn, we expect a churn rate of around 4% for 2024. We expect a bit more churn than usual in Q1 and a bit less than usual in Q2 next year. For the simple reason that we have become less promotional in this year compared to 2022 when we gave away more weeks for free when members joined. As a result, joiners I this year will go out of contract a bit sooner. After all my previous remarks about yield, ingrowth and churn trends, I will now elaborate on what this means for club unit returns. In 2022, our 500 mature clubs enjoyed a strong recovery following 2 years of COVID measures. With an average revenue of EUR 870,000, these clubs achieved underlying club EBITDA of EUR 431,000 and 50% margin. We already reported on these numbers, so you're well aware of these numbers. Return on invested capital stood in the mid-30s. For this year, we provided guidance that the expanded group of mature clubs should achieve a 30% plus return on invested capital. Right from the start of the year, our mature club profitability was impacted by high cost inflation, including a more than doubling of energy costs. We also explained that the expanded mature club we report on includes club vintages from 2018 and 2019, which reached the required membership levels by March of this year. We also explained that the 2020 vintage requires more time to reach its membership goal due to the absence of a normal ingrowth pattern during 2 years of COVID measures. The good news is that going forward, cost inflation should be lower and that energy costs will come down substantially from 2024 and that our yield continues to grow. And to help you all with your modeling process, I provided an overview of the expected unit numbers for an average mature club in the midterm, meaning 2 to 3 years. Let's go through a few of the line items. The initial investment I already talked about in my presentation, the 1.25. In the medium term, and that's in the next 2 or 3 years, we expect the average mature club to have around 3,250 members. In 2024, the still underperforming 2021 vintage will be added to the group of mature clubs. But in the midterm, there will also be an effect from the larger number of regional clubs that we're opening. And lastly, the cannibalization effect from the high Premium membership uptake is also taken into account. This last element, as I explained, helps us to grow the yield. In the midterm, we expect the average mature club to achieve annual revenue for EUR 1 million. Club operating costs increased by around EUR 100,000 compared to 2022, mainly as a result of cost inflation, higher energy cost, but partly mitigated by the lower club cost of regional clubs. We expect an underlying club EBITDA of EUR 460,000 and an EBITDA margin of 46%. On a return on invested capital basis, we expect to achieve a similar mid-30s percentage. I have decided not to split these midterm club unit economics between city and cluster clubs and the regional clubs, for competitive reasons. But rest assured, regional clubs enjoy similar margins and returns on invested capital. I have one more comment to make about this slide, and that's about a significant embedded earnings power as clubs become mature. If you do not open a single new club, our underlying club EBITDA based on 1402 clubs could potentially increase to EUR 644 million based on average mature midterm underlying EBITDA. And as explained, midterm means 2 to 3 years. To conclude this slide, going forward, we expect for mature club more revenue with slightly lower memberships and a 30%-plus returns. And still, I want to highlight a high significant embedded earnings power in those clubs. And now we go to the sustainability. 2 years ago, we launched the go for a fitter world Program. In this program, we articulated our main sustainability ambitions linked to 3 focus areas: healthy people, healthy planet and healthy community. With a healthy people, we aim to reach 50 million people by 2030 to help them improve their health and well-being. With Healthy Planet, we aim to have reduced our environmental footprint and be carbon neutral by 2030. And with Healthy Community, we aim to have invested more than EUR 5 million in our communities through impactful partnership also by 2030. Since then, we made steps in achieving these goals and further developed our sustainability strategy. The main material topics that we focus on as a company and which are also deemed most important by our stakeholders are now also part of the 3 pillars. They are shown on this slide and include health and safety, environmental footprint, diversity and awareness and accessibility. In the meantime, more sustainability-related European regulation came our way, which brings me to the next slide. Well, in this overview, we show the regulatory landscape that we operate in, in which the top 2 are the most relevant and pressing for Basic-Fit. The EU taxonomy is a cornerstone of the EU sustainable finance framework and an important market transparency tool that helps direct investments to the economic activities most needed for the transition, in line with the European Green deal objectives. It's a classification system that defines criteria for economic activities that are aligned with a net zero trajectory by 2050 and the broader environmental goals other than climate. After 6 objectives, climate change mitigation and climate change adoption are relevant for us. Most notably, our investment in the transition to gasless clubs and the installation of solar panels are aligned with these objectives. But the real challenge that we have is to comply with the corporate sustainability reporting directive, the CSRD. The CSRD contains a list of disclosure requirements, the European Sustainability Reporting Standards, or ESRS, that listed company, companies need to report on. For us, this means that on annual report 2025, we will report on the ESRS for the first time. We will not report on all ESRS, but only those that are material to Basic-Fit. We came to the assessment of the material topics after doing extensive double materiality exercise. The topics that we are preparing to report on are climate change, water and marine resources, own workforce, workers in the value chain, consumers and end users. In total, including all subtopics, this will add up to well over 120 data points. This is a significant project that we're working on and in which we have made great progress, but this is requiring additional investments in resources and tooling. As we have been making progress in disclosing more sustainability-related information, you've always also seen our ratings with ESG rating agencies have been improved. We focus our efforts on ratings from MSCI and Sustainalytics, as communicated at our prior CMD. In the past couple of years, we improved our rating with MSCI to a AAA rating. With Sustainalytics, we improved the medium risk rating. As our disclosures will continue to improve with the reporting of the ESRS, our ratings are expected to improve further. Our disclosure of Scope 3 emissions, for example, will contribute to this. And this brings me to the last slide with the key takeaways. We are on track -- key takeaways. We're on track to reach our medium- and long-term targets. We have seen strong club and revenue growth, and we'll continue to focus on return on invested capital, while optimizing membership growth and yield development. Our Smart Refurbishing will keep the average maintenance CapEx at EUR 55,000 club at least until 2030. And lastly, we are highly cash generative before new club openings. And if you assume that all our clubs can grow to an underlying club EBITDA of $460,000. There's an enormous embedded value in our network of 1402 clubs of more than EUR 644 million. Now I want to add to that, that we are the architects of the fitness revolution. That's what Erica asked me to say at the end of my presentation. Well, this is the end of my presentation. I'll give the floor to Redouane.

Thank you, Hans, and good afternoon, everyone. So what I would like to share with you in my part of the presentation is our 2023-2030 Basic-Fit journey. I will start by explaining what we have achieved in 2023 and also give you a clear view on our expansion planning towards 2030. But I will tell you more about the reason behind the speed of our growth. Why we do it? And most importantly, how we do it? It's not just about expansion and growth. As you all know, our business model can be impacted fixed cost. And I would like also to tell you in my presentation, all initiatives we have been launching to better control our CapEx and the fixed cost. And also what we will do directly in our midterm and long term to better console the 30% return on investment. For sure, I have to beat you about Germany in the country #6, Germany. I will tell you more about our growth before reaching my conclusion. We'll now take a look to 2023. I'm proud to tell you that we have reached an historical target within Basic-Fit. Proud of our team because for the first time, we have reached our expansion targets 2 months before the end of the year. And as we speak today, we can enjoy the 1,402 clubs milestone. If you now take a look to the 2 coming years, 2040 and 2025. As already explained by René and Hans, we do have, in our expansion process, the ability to control our growth, depending on the market conditions. What I can tell you is that in the next 2 coming years, we have more than 610 projects in negotiation, more than enough to guarantee the target we would like to achieve. The main focus of our expansion team will remain on France and Spain to further reinforce our market-leading position we have in those countries. If you now take a look to 2026-2030, we will further expand in the established markets, Benelux, France and Spain, and we will start accelerating our expansion in Germany to become, for sure, market leader before 2030. So we will keep scaling up to reach at least, as already stated by René, the 3,000 clubs milestone by 2030. If you now take a look back to the 7 previous years, basically, it has been opening 983 clubs. And in the next 7 years, we will be opening at least 1,600 clubs to reach the 3,000 club milestone. On this graph, you can see the current situation by country, how many clubs we have as of today. You can see how many clubs we -- an estimation of the clubs we would like to open in the next 7 years. And the good thing is that you can see on this graph right now that by 2030, our goal will be reached in the Netherlands, in Belgium, in Luxembourg, in France. And our first goal for France, in Germany and Spain will also be reached rich, which means that we are sure we can achieve the 3,000 clubs by 2030 with a gap to 3,500 if we add 250 clubs in Spain and 250 clubs in Germany. But as I told you in my intro slide, it's not only about growth. So I would like now to take a few minutes to explain you that we have a growth plan under control. But although is also important and you also focus on those KPIs to guarantee the longterm return on investment from Basic-Fit. Speed, why and how? Fixed cost, what are we doing right now to be better in control? And how can we stay #1, with a 30% return on investment is also something I will explain you in this part of my presentation. Growth speed is crucial for our model to guarantee the long-term 30% in investments. Why? As you all know, fitness is a first mover business advantage. Opening many clubs in a cluster strategy is key, and it's a great entry barrier. By doing that, we become for sure in all countries, all regions, all cities, the logical choice for consumers. Because sometimes we hear that it's easy to open a fitness club, just went to box, put some equipment in it and start selling memberships, right. But what we do within Basic-Fit cannot be easily copied because you open club at high speed in cluster strategy with a low breakeven point to become the logical choice and to guarantee the return on the long term. How we do it? For sure opening more than 200 scripts a year, we have to do with thanks to automation. And you will see later in my presentation that year after year, next to the fact that we increased the number of clubs, we will be able to open. We also focus on trying to keep the cost as low as possible and to get more control about the cost, but also the concepts we are executing in the different countries. And as already explained by René, our growth speed will be guaranteed by new clubs and possible acquisitions. We are not looking for acquisitions, but we are open for good acquisitions. Availability of locations in our countries. I'd like to tell you that in all our countries, we have no issues to find the right locations at the right price, also have a slide on that in the coming slides. Why? Because the more clubs we open in the country and becoming the market leader, we also become the preferred partner of all landlords because they know we are there to pay the rent for decades. And next to that, we organize in all countries multiple times per year, broker events and lender events just to stay top of mind. Let's now take a look to the evolution of rent levels in our countries. So on this graph, you will see the development of rent levels from 2019, including the clubs that you are supposed to open next year. And we made the speed between the city clubs, clubs in big cities, and the regional clubs, clubs in cities with less than 30,000 inhabitants. You see that the rent price as already explained by Hans in the city clubs in the regional clubs is lower than the city clubs, and you can see that the rent is remaining really stable. The next question could be, what about the size of the club then. On this slide, also happy to tell you that the average size of the clubs also remains stable at around 1,200 square meters. And you see exactly the same thing year after year for the 5 previous years. If you take a look at the CapEx. We have been instead until 2023 to guarantee the construction of a Basic-Fit club for EUR 1.2 million despite inflation, despite all the issues you guys know about COVID and the supply of technical installations, et cetera, thanks to our scale and thanks to some specific initiatives that we have been launching with our team. And I would like to give you 3 examples. First one, we were able to continue building clubs at EUR 1.2 million because of the favorable position we have in negotiating with the landlords. When we decide to enter the city and if you have the chance to open 10 clubs, we negotiate with 30, 40 landlords so that you can put them in competition, we can then select the best rent, the less CapEx needed to reach a 30% return on investment. We are the strong market leader. So for a landlord, in any country we are operating, it's much better to sign it Basic-Fit, sign with a self-employed fitness entrepreneur. And we also have signed contracts, and they know that we have a really data-driven efficient expansion process that will guarantee that we can move faster and that we will be able to pay the rent also within 20 years. The second reason behind the fact that we were able to control CapEx was a great partnership and relationship we had with the building partners. And let's go back to beginning of COVID situation beginning 2020. At that time, I can guarantee you that all builder partners, we were working with, were concerned and afraid, they were afraid about losing some business with Basic-Fit. At that time, together with my board colleagues and my property team, we talked to them and we told them, okay, guys. We will continue opening clubs. And you know what, we're going to prepare a plan to now more open 100 clubs a year but to scale up in to open at least 200 clubs a year. What we then expect for you is that you will not increase the prices, which means the game -- the rules of the game are easy, you will get more volume and less margin. And this was the main reason why despite an inflation sometimes -- and some price is going up to 10%, 20%, 30% that you were still able to build clubs for EUR 1.2 million. Taking a look now to the 2024 project. They are estimated to $1.250 million. So a gradual and small increase, way below the increase of inflation and prices that we have seen since 2020. The third reason why we kept also this cost under control, our CapEx cost is the fact that we signed Europe-wide contracts for technical installations. And this was really important at two levels. On the one hand, we were able, thanks to our scale, to negotiate the best prices when opening 250 a year. But even more importantly, for sure, in post-COVID situation signing those contracts was a great guarantee that we'll have no issue with the supply of technical installations. We don't want it to be confronted with [ 40-Club 3D ] to be opened, but not having an air conditioning, for example. Other factors that could impact our business, the staff costs, inflation crisis, government decided to increase the salaries of employees in order to pass through the crisis. And we also did that to support our employees in difficult times. Because at the end, we cannot be successful without our employees. We can define the best strategies. We need the people on the clubs to deliver the great service. What have we done for that? On this graph, you can see the deployment of a remote operations capability, the smart cameras. In 2019, we had 70 clubs in the Benelux, opened by night with external staffing security companies, and we had 2 full-time external employees per club. When the club had to close in 2020, we knew we will have to fight against cost, less members. So we decided to scale up our efficient 24/7 operations and when we were able to reopen the clubs, we started opening the clubs by night in the Benelux and staffed. So we stopped working with the external company. And right now, as we speak, we have 230 clubs in the Benelux, opened 24/7 and completely unstaffed by night. To manage that, we do it with 50 full-time employees working remotely here in Hoofddorp. If we didn't invest in the smart cameras technology, years before the COVID, we would have needed 660 full-time employees to open 230 clubs by night. So we are now running, operating the clubs with 7.5% of the full-time employees, thanks to our efficient remote operation capability. 2 new initiatives, we also launched in 2023 in the Benelux. We started working with morning shifts at 8:30. Till 2022, we used to have staff in the clubs, starting at 7 a.m. in the morning. Now from 7:00 a.m. to 8:30, we control the clubs remotely. This brings us to a saving 170, 170,000 towers annually. And we are also, as we speak, right now testing the unstaffed unplanned projects in our Benelux clubs, which means if someone calls us and saying, I'm ill, I'm not feeling good, we not open the club, we then just call the remote surveillance team, and they will take over the management of the club. Conclusion. Thanks to the investments we made, way before COVID. And thanks to the commitment we had when COVID started to find a solution to compensate the high cost we will have to face, we were able to decrease the cost, to guarantee more safety because have been 50 smart camera, 25, 50 cameras in a club, it's much more efficient. I mean 1 or 2 employees in a 2,000 square meter box. We have the flexibility to adapt. It's more service for the members more than 200 clubs opened by night right now. And the 24/7 concept will be tested in the new future in Spain, you will hear about it in the coming months. So we are a market leader with favorable competitive landscape. Let's now take a look to our competitive position in the market where we are because it's also something that will guarantee the long-term profitability of our clubs. On this slide, you can see, as we speak today, the number of clubs we have in France, 780 clubs. And you can see those are all the other clubs reported in the yearly Diorite and Europe active report, much bigger than #2, #3, et cetera. If you take a look to the Netherlands, we see exactly the same situation, more than twice as big, around twice as big as #2. If you take a look to Belgium, by far, #1 and much bigger than all other competitors reported in Diorite and Europe active report, any speed, as we promised you during the 2021 Capital Market Day, we became beginning of 2023 market leader, and we are scaling up our expansion with 140 clubs and more to come in the coming years. If you now look to the net growth, 2022 net growth, what happened last year. You can see that in France, we grew with 119 clubs, where all other competitor supported by Diorite and Europe active altogether grew with 55 clips. If you take a look to the Netherlands, we had a net growth of 15 clubs and all other competitors in the Netherlands reported in this report decrease with 4 clubs because some have to close some clubs. If we take a look to Belgium, 14 clubs were Basic-Fit, only 3 clubs for the 8 competitors combined and taking a look to Spain, 34 clubs for Basic-Fit Spain and 49 for the 7 competitors. But as you know, last year was the first year we started expanding fast in Spain. And just to give you an idea, this year, we are not opening 35 clubs. We already opened as we speak today, 50 club in Spain. To conclude, in 2022, Basic-Fit opened 182 clubs. And the 29 competitors together reported in Diorite and Europe active report opened altogether only 103, just to show you the difference we are creating towards our competitors year after year. And to better visualize this, it's also important to take a look at what we have been doing the previous 5 years. And here you see that starting from 2019, '20, '21, '22, '23, have been opening more clubs, which means that the gap we are creating compared to our competitor is becoming bigger and bigger year after year. So I think you understand that we're on track to reach the 3,000 clubs, at least, 3,000 clubs milestone by 2030. But you also have a plan to optimize the profitability of the clubs. It's not just about opening clubs, making sure that the clubs that we open continue to deliver the expected profitability. Just in 2015, '16, before the listing of the company, we used to have 350 clubs. And today, we have 1,402, and we promise you that we will end up at least with 3,000 clubs in the next 7 years. How we did it? We did it by running out our clusters. Our cluster strategy was the main driver to become successful and become a market leader. And to grow from 1,402 to 3,000, we will continue creating cluster in each city, each region and each country. But the world is changing fast. And we need also to develop the ability to adapt to market circumstances. So what we will also do at the same time that focusing on growing towards 3,000 clubs, we will also think about how we will manage the existing clusters we have, the 1,402 clubs, we already opened and will explain you what I mean with this in the coming slides. Cluster creation of cluster management, same approach, but completely different decision-making process. On this slide, you can see a typical Basic-Fit cluster, the orange points, clubs in the north, south, west, east and more clubs than competitors combined. To create such a cluster, we mix local intelligence, people living in the area or employees with business intelligence, people working here at our business control department, calculating how many people are living there, the purchase power of the people, how far away from the competitors what our project is a competition offering and what will be the return with if we have to pay ex-rent and EUR 1.2 million CapEx. So this is what we do to create a cluster. Now to manage a cluster, the good thing is that we don't have to base our management on expectations of assumptions, we can base them on track records because we know how many members we had. What type of members -- what type of machines they were using in the club and maybe in some regions or in some cities in a specific club, people will be much more fun of free weights than cardio or much more fun of GXR recording than free weight, for example, and definitely in the city as Brussels where we have 48 clubs, we have a huge opportunity to optimize our profitability by better responding to what the people want in the clubs. And this will be based not on assumptions, but on track record we have those information. As Erica explained you, so we have a lot of data collected from our members. Improving the long-term cluster profitability, also key to define what we should do before renewing a lease contract and also the amount of CapEx you should invest when we're branding a club. Do we need to have all the clubs exactly the same? Is it -- does it make any sense to having a cluster 1 club with much more free weight, for example, because we know most of the people coming to this club are really crazy about free weight. Now if you take a look back, cluster strategy, to be honest, is not something we invented. It's just something we discovered, thanks to the acquisitions we made in the past. Indeed, 12 years ago, when you made the acquisitions of Fitness First and Healthy Clubs and Conversions and JustFit, we ended up sometimes with 3, 4, 5 clubs in the square of 1 kilometer. We said, okay, right, this was part of the deal. We can't do anything. We have a lease contract. Let's take a look to the results of the clubs, the best one we will keep and the bad ones, we will then not renew the lease contract. And you know what, what happens after 1 year, 2 years, all the clubs were profitable and paying an important job. And then we said, okay, actually, we discovered through acquisitions. And now let's use it as the main driver of our long-term profitability. For the 1,402 clubs we have already right now, we'll be focusing on cluster profitability in addition to club results. Optimization of this profitability will be based on track record and not on a business case or assumptions of how many members could we expect? We have the figures for the previous 5, 10 years. We will focus on improving this profitability with the local knowledge we have in the club, feedback from the people working in the club and also what the figures [ health ] departments are telling us about the performance of the club. And last but not least, managing our cluster more efficiently will definitely help us boost the fitness penetration by better responding to the prospects to the people's habits, behaviors and wishes. This brings me now to the next topic, Country #6. We're going to tell you more about our plan and strategy for Germany. So in Germany, we are really building great foundations for long-term success. And we do see a huge opportunity in Germany. Huge opportunity because Germany with 84 million inhabitants is the biggest European fitness markets. Taking a look to the fitness penetration, 12%, much higher than the 8%, 9% we have in France or in Belgium and Luxembourg. One specificity now that you can see on the screen from the German market, they have, according to the Diorite and Europe active reports, 9,149 clips. And if you take a look to the biggest fitness player in Germany, all together, the 8 biggest players, they just own 15% of the market. What does that mean? It means that Germany is a highly fragmented market with no clear market leader, and we'll come back on this point later in my presentation to show you why we see an opportunity and how we will grab this opportunity on the short term. Another positive point about Germany, around 10 million fitness members paying today, as we speak, EUR 45 on average per month. And we are requesting right now in Germany, EUR 19.99 per 4 weeks, 50% of the average membership fee paid now by 10 million German people. And we also show in my presentation that non-franchise and franchise payers are really not growing fast in Germany. They are not growing fast in '23, but they were also not growing fast previous 5 years. And our expansion will be based on new club openings because it's a proven capability we have shown now in Benelux in France, in Spain. And we are also open for acquisitions. Just to remind you, the official launch of our expansion strategy in Germany was September 2022. Why? Because we communicated officially with our shareholders, community and with the world in April 2022. Before that, we have been working a lot on Germany, but low profile with Belgium colleagues, Dutch colleagues. And starting from April, we started looking for building partners for German colleagues and the official launch was in September 2022, so 13 months ago. Before entering Germany, we've been working a lot from more than 1.5 years collecting theoretical insight. We listed all 298 German cities with at least 30,000 inhabitants knowing this is a theoretical approach we have applied in all our countries, we could open 1 club per 30,000 inhabitants. In each city, we identified also on paper, theoretical approach, how many clubs we should open to create the ideal cluster to become the logical choice for the consumers. What we also did with a full team of German students for weeks, even months, we listed for all identified 30,000 inhabitant city, all real estate brokers working in the city. Why we did that? Because now today, when I request a field expansion manager to enter Berlin, he received the list with how many clubs we should open in Berlin. He get the list of all real estate brokers working in Berlin and the first thing he has to do the 2, 3 coming weeks is just to call as many brokers as he can, do a visit of the city without even visiting locations with him collecting information, sharing information about the rent prices, the place to be in a city, where the train station, where is the university. And thanks to this preparation, we are able with our expansion team to become specialists of a city that we -- that was completely unknown for us after 2 or 3 weeks' time. We analyze for sure, all our German competitors because also specifically in Germany, if you take a look to the Diorite and EuropeActive report, you will see the main players. But this is the only country in Europe with that many small local regional players. We identified all players in Germany with at least 5 clubs, a lot of clubs. And we also called or region in Germany, authorities to ask them, okay, let's suppose we have to resume to build the fitness club. What is the delay to obtain the request? Important fact in Germany and big difference compared to France. In France, by law, all regions are obliged to give you an answer on the permit within 5 months. Positive answer, negative answer, additional questions. In Germany, it's depending on the region. In some regions, you can open a club after -- you can get a permit after 3 months and in some regions of cities, it can take up to 18 months. But in the beginning, it's not important, but when we need to scale up and to start opening 75 or 100 clubs a year in Germany, we need for sure to take this information into consideration to know that we can control our expansion in Germany. But this is just a theoretical approach, just having someone on the call, giving us an information not able to confirm if the information given was the real one. So Germany can be divided in 16 regions. What we did, and this is a copy paste of our French strategy that helps us to become really quickly #1 and have clubs in all cities with at least 30,000 inhabitants. We then identified by regions, here an example for Battenberg, all cities with at least 30,000 inhabitants. And then we classified them from the biggest one, number of inhabitants to the smallest one. And we consider if you open 1 club per 30,000 inhabitants, how many clubs we should be opening in this city. As you can see on this slide, this analysis has been made for all regions in France each orange ones you see on the map is a city with at least 30,000 inhabitants. So this is a future Basic-Fit map of Germany, all white points are cities with at least 30,000 inhabitants, and this is what we will be reaching the latest by 2030. But as you can see, between all those white points, huge space. So we said, okay, let's take a look how many people are living in big cities in Germany and how many people are living in small cities. Remember the Capital Market Day, I made in 2021, I was talking about Spain. And in Spain, 85% of the population is living in 19% of the territory. Germany is completely different. So what we did, we took a look again back to the 16 regions and we calculated by region, how many people are living in cities with at least 30,000 inhabitants and how many people are living in the regional clubs, regional cities. If you come back to Battenberg, the example I showed you in the previous slide, only 40% of the German people are living in big cities, which means if we only focus in big cities in Germany, we are not open to all. We are not reaching 84 million inhabitants in Germany. We are only reaching 40%. If you take a look, nationwide, 42 million are living in big cities, and 41 million living in smaller cities, which means 50% of the German inhabitants are living in regional cities. The regional clubs are a big opportunity with attractive figures. We identify them by crossing local intelligence and technology because a regional city is a city with less than 30,000 inhabitants, where we realized that people were ready to ride 10, 15 kilometers to go to the cinema, to go to supermarkets, and we realize we're able to do exactly the same to join the fitness club. The good thing, as already explained by Hans, we have lower rents because there are not that many retailers willing to rent big boxes in a small city, and we have a good negotiation position. We don't have to fight with all the big retailers or other fitness chains. Other fitness chains cannot easily enter the regional clubs because they don't have the cash flow low breakeven point we have and the lean staffing lending we have and the cameras we have, et cetera. It reinforced our national coverage and improve the value of our memberships. Yes, we increased the pricing to EUR 24.99 beginning of January. But you opened more than 500 clubs after 5 years and year after year, the value of the project we are offering to our members is also becoming higher. We have less competition in city clubs today, but also long term if you open 1,200 square meters box in a city with 10,000 inhabitants, the risk that the competitor will open another club is really small. We benefit from the national marketing people by Erica and her team and then we are really open to all reaching the 84 million inhabitants on term in Germany. Competitive landscape in Germany, interesting slide. It's a highly competitive market, the German market with only a short-term impact on Basic-Fit and our clubs, our first clubs. It's an established market with many national and regional fitness players, that's a fact and also get a warm welcome from our competitors when you open a club in Germany. We have seen some competitors offering 6 [indiscernible] for EUR 1 when you open a club. As you may understand, this is not a sustainable strategy for them in the long term. Maybe they thought we would be afraid and we will stop. It was just motivating us because we know exactly what we do in Germany, and we know that we will replicate what we have been doing in all other markets. It's only a short-term impact on our clubs because we know the strong clusters we will create, we will make the logical choice and our existing capabilities, really proven in other markets will lead us to the market-leading position we have in the established markets we have today. How we monitor the competition. I'll give you an example of Hamburg right now. First for Hamburg. First thing we do, we take a look to how many people are living the city? How big is the city? What's the density of population in the city and based on 1 club theoretical approach, the 3,000 inhabitants, how many clubs we should make sure we have to become the logical source for consumers. Then what we do, we add on the map, all high-value, low-price fitness players that can be compared to Basic-Fit in their offering, same size or even bigger than Basic-Fit and more over the same price. This is the situation for Hamburg. And next to that, we also identify all of the competitors and how many clubs they have, boutique clubs, all-in clubs, mid-market, premium clubs. As you may understand, the first cube would open in Hamburg, people will have to choose between one Basic-Fit and 40, 50 different clips. And the question now may be but why Germany then, if it's so competitive. And this is something I would like to explain you in the next coming 5 slides. So why Germany? Why Germany because it's a highly fragmented market, and you will see it on this slide. On this slide, you can see the biggest cities in number of inhabitants in Germany. And then the last line is Brussels. Take a look, please, one more time for consistency to second-line Hamburg, around 1.9 million inhabitants. If you take a look to the major high-value low-price chains, McFIT, FitEx, ClearFit, and Easy Fitness. The biggest player in Hamburg with 1.9 million inhabitants is McFIT with 8 clubs. And then next to the big players, there are also some smaller regional chains, Fit/One and XTRAFIT. And altogether, -- they do have 26 low-cost clubs. Brussels, last line, 700,000 less inhibitors than Hamburg, 9% fitness penetration rate, 3% lower than Germany. And as we speak today, Basic-Fit has 48 clubs. So I think you guys know when Basic-Fit will have opened all and applied our cluster strategy, I think you know people living in Hamburg, which fitness chain they will join on the long term. Now it's a highly fragmented market. Why Germany, second reason, limited competitor growth. On this graph, you will see the development of all fitness chains reporting in Diorite and EuropeActive report from 2018 to 2022. Flatline. The only one growing a little bit is Clever Fit, but franchise organizations, not creating clusters and also focusing in smaller cities with small clubs. If you compare that with the growth we had with Basic-Fit France and Basic-Fit Spain, you can directly see the difference in capability in opening new clubs. One other specifically on the German market. On this slide, you can see all acquisitions that were made the previous 4 years in Germany, only country in Europe where we see that. And this has to be linked to what I was telling you in my intro slide about Germany, 9,149 clubs, fragmented markets, the big players only own 15% of the market, also an opportunity for us, not looking for acquisitions, but we could buy stand-alone clubs if we have good opportunities. We have a unique low breakeven point with 1,500 members points, thanks to the strong operational excellence focus we have already presented by Rene. And this makes also a big difference. We have good competitors in Germany, but it's a fragmented market. The market is not full of fitness clubs, but they do need 3, 4, 5 and sometimes 6,000 members to break even. What will happen when Basic-Fit will be applying the 130,000 inhabitants. Many competitors will see the difference between being profitable to go in before the cash breakeven points. And that's why even if we increase our expansion tempo, year after year, and you'll see it also in my presentation later, we always keep a good discipline on decreasing the cost to make sure we lower the cash flow breakeven point. If you take a look to the competitive landscape, 12 clubs just started in Germany, biggest payer Clever Fit, franchise organization with 450. And you see now that [indiscernible] group EASYFITNESS, there's no change in Germany, growing with more than 5 or 10 clubs per year. Nobody is opening clubs, just some acquisitions or fusions. If you take a look to the pricing, we are still charging EUR 19.99 for 4 weeks in Germany, and we are then less expensive than all other offers from other companies, knowing that on this price, many competitors also so charging some recurring fee, EUR 20, EUR 30, which we do not do within Basic-Fit. Interesting slide, map of Germany, and now you see many points appearing on this slide. I know how many points it is, it is 980. This is not a white spot map of Germany. This is a number of clubs we already visited commercially and technically in Germany, the previous 2 years, 980 locations. So maybe the question now is 980 locations and only 12 clubs. What's the challenge or what's the issue. I'm going to answer this question in the next slide. We have a rigor site selection discipline of every 11 locations analyzed in Germany, only one which the Board approval stage. And here, you have a breakdown. We opened 12 clubs. We still have 43 active clubs, 2 on hold, and we can canceled the new active clubs or other clubs that we already approved. This is a crucial step to build market knowledge, and we did exactly the same thing back in 2013 in France and also back in 2018, '19 in Spain, because we need to better understand the market. When we want to open the first club in Dusseldorf, we visit 85 locations. I don't know about the rental prices there in Dusseldorf and because I know on term, I will be opening 100 club maybe even more per year, I cannot make the mistake starting paying not the right price. So gathering all this information and building the knowledge is something that takes time. We become, as explained in my intro, [ experience ] a known city in 2 weeks' time because of the list of brokers we have, we know exactly how many clubs we should open and how many clubs we should open to have the perfect cluster. It improves our negotiation position. Negotiating on 980 location, we know to what point we can push to get free months or to lower the rent in the city. It also bring us to [indiscernible] German permit process. I told you in the preparation phase, we called all authorities, but nothing beats practice. We will only know exactly how many times it take and how easy or difficult it is when you really fill in a permit in a city and you know how many times -- after how many times you get an answer. So needed steps for future exited rollout in Germany. What I can tell you is that we will build strong clusters in 5 to 8 cities in the next 24 months. So together with our expansion team, we identified 5 to 8 cities you said, okay, in those cities, we should apply the Basic-Fit receptor. We should apply the cluster strategy to see directly the benefits. Next to that, we will continue focusing on other cities simultaneously. '24-'25, we will continue building knowledge and competitive on the German market and starting from '26 we further accelerated at least 75 openings per year, quite comparable with the slide. Earlier, René presented the slide with our expansion track in France. We are copy pasting the strategy applied in 2015 -- '13 and '15 in France. Our unique execution capabilities will lead us to the strong market leader position we already have in other countries. No doubt about that in Germany, we have a huge opportunity. Let's now take a look to what we improved in our expansion process in the previous few years. So 983 clubs built the previous 7 years. And we have now to increase the ramp-up of clubs to at least 1,598 clubs coming 7 years. The system we have today in place makes it easy and possible to open up to 200 clubs per year, no challenge with that. As we speak today, we are managing more than 51,000 different tasks with all projects we have in our pipeline. As you may understand, it's not possible to do that with an Ixelles with white boards. So we have an automated system, developing sales force to do that so that we can sleep by night and guarantee we can reach our target. Let's now take a look to innovations we had in the past in Basic-Fit. In 2015, we had no real technological developments. We had great expansion rooms with whiteboards and physical cards. We had to adapt daily. And at that time, we were really proud about that because to be honest, 12 years ago, we were working day and night to open 5 clubs per year, really, day and night. And then we said, okay, let's try to open 25 clubs per year. What do we need? Okay, we need to better track all the steps. So we created the whiteboards in the cards and you said, okay, I need more clubs, otherwise we will not be opening 25 clubs. When we listed the company, we said, okay, we need automation now because it's crazy that I had to call in all countries and tell them, please send me a picture of the board with a letter of intent and I was taking a look in my Blackberry to how many clubs we signed, et cetera. So we developed a process in 2016 with our listing with 15 expansion steps. In the previous 2 Capital Market Days in '19 and '21, I presented the fact that we automated and further developed our expansion process and we went from 15 steps to 72 steps and 82 steps in 2021, fully automated. We don't have to think about it. Step 1 is when the first expansion manager is visiting a location. He visits a location. He puts it in the system. The system will calculate automatically what is supposed to be done by who and when. And if the task is not performed, the system will send a reminder. If it's not performed, he will escalate to the manager of the person. The system we have right now in place more than enough to open up to 300 clubs, just not needed to innovate. But as I told you, we constantly look to improve things. And to be honest, we also had a challenge in 2022. As most of you can remember, we promise you that we will be ending 2022 with 1,250 clubs. And in September, October, we told you it would be 1,200, the 50 additional clubs will be opened in January or February, not dramatic for us. We felt it in the share we saw. It was definitely not a good news for you guys. And then you said, okay, we don't want to be confronted with that. So we have to improve things. So today, am I going to present you a new expansion process with 122 steps or 200 steps, no. We said, okay, let's stick to the 82 steps for a few years. And that's why to make the 82 steps more efficient. The goal is to shorten the expansion process time line. So the question -- the main question is, how can we move faster with the existing tools we have and be more in control also of the concept we have. So we said, okay, from the 82 steps, there are several steps, we cannot do anything about it. How many times does it take for an architect from the city to answer a permit request? How sure are that it will be positive or negative for additional questions. We agreed with the landlord to get the keys the first of March. He's not ready with his work. We get the keys 2 months after. We cannot do anything about that. So we forgot about those steps. We focused on the steps that we see okay. On those steps, we could act. We could think about improving things to be more in control. The goal was to reduce the 18, 24 months time line we need to open a club by stopping or improving the step that we are making us lose time by giving our building partners more support to build easier and quicker the clubs. We also wanted to be better in control of our CapEx budget. And we also wanted to improve our negotiation position with landlords, knowing more as soon as possible is also agreed tool to reassure a landlord and be able to negotiate better conditions with him, and I'll explain you that in the coming slides. And actually, I must say the launch in Germany 2 years ago, not the launch, the launch was September, but the preparation, the start of the preparation 2 years ago was a great laboratory for improving our process. Why? September 2022, we were really happy. We said, okay, we know we will copy paste the strategy in France. So let's find enough building partners. We contacted more than 25 building partners in Germany, and we ended up signing a contract with 7 partners, so it's okay. First thing done. We have 7 building partners, but they have no experience with Basic-Fit. They don't know about our DNA, what they have to do to open that many clubs. So we said, okay, we have a solution. Let's write down everything and we ended up with more than 800 pages of Basic-Fit guidelines, branding catalog, product catalog, what type of showers we have to use, the colors on the walls and everything and we felt at that time that having 7 building partners and 800 pages was the solution. It was not because we ended up receiving after 6 weeks, 8 weeks, some crazy layout plans from the building partners and my property team come and say did we have an issue because this is really not a Basic-Fit club. And this was the biggest learning for us in 2022 and 2023 because you all have a dictionary at home. It doesn't mean that all the definitions of the word in the dictionary, just exactly the same. I was thinking that just providing them the 800 pages was enough. It was not. And this was -- so we decided 2 years ago to focus on, okay, what we have to improve to make it easy to build those clubs. So what we did? I'm going to tell you 3 things. Now this is my German team -- expansion German team. We now scan all clubs in 3D directly during the first commercial visit, directly. Four days after the first commercial visit, we are no more wasting time requesting sometimes for weeks, the correct plans from the landlord. And sometimes they even don't have correct plans. The technical constraints can be immediately identified the heat, the ceiling, the doors, exits. And the cost structure partner who is supposed to perform a technical visit maximum 10 days after the commercial visit can do that with the right measurements, with the right heat with everything in hand, also easier for him to send us side deferred forecast what is the cost that we should expect? What should we negotiate with the landlord. Is it worth continuing negotiating on this location? And will we get the 30% on investment, yes or not. Next to that, we invested a lot of time and energy in developing a powerful AI tool in the previous 2 years. What we need to see, we created a tool and we incorporate 800 pages of guidelines and branding book and project pricing catalog, and we also incorporate more than 500 layouts of existing clubs in this tool. And here is the magic right now. From a Blanco 3D, we put it now in this AI software. Each time we have to click on a button we received 5 different layouts, respecting all the 800 pages guidelines from Basic-Fit. And it's also classified which one is the most cost efficient, great difference. We are in control. In the past, without this tool, I was 100% depending -- we were depending on the building partners and their architects, German architect with no experience about Basic-Fit and expecting he will take a look to the 800 pages guidelines. It was taking weeks, months before getting a plan. And when we had to change something in the layout, it has to go back to the architects, not only working for Basic-Fit. It has to come back to us back and forward. Easy to adjust plans in case of technical constraints. And we have also developed. So we have 3D scan of the club. We have an AI tool that provides us unlimited number of plans. We also developed a precalculated detailed price offer. You have to know when a building partner before starting building a club, they have to send us what you call a DPO, more than 444 lines, everything is written, how many square meters flooring, painting, everything that we have to pay, everything in the CapEx of the new club. From the AI software and the 3D created by the software, this tool calculates automatically with the click on a button, up to 75% of the cost directly, which means that the bidding partners, also the new ones in Germany not experienced with Basic-Fit, have to check if the 75% are correct, instead of starting from scratch. And for us as Basic-Fit and for our finance department and property departments, we are fully in control of the cost. I would like now to show you this in a short video with me maybe more clear that my explanation, even I think my explanation was clear enough. But I think the video is great. [Presentation]

Okay. So as you have seen in the video in my explanations, we are using innovations, our real game changers for the future. Thanks to those 3 innovations and many more to come, we'll be able to have more speed, more concepts and cost control. It also means less training needs for building partners. We provide them with the layout. They just have to do what they -- they can do anywhere in the world build clubs. We are more in control of club concept from anywhere in the world. Faster negotiation with landlords and more profession approach. Let's imagine if after 1 week of a commercial visit, we're going to have a technical visit. And then 1 week after, after 2 weeks, we have to negotiate rent to the landlord and you tell him, okay. This is a layout -- this will -- we will transform your location into this club, and we can travel with them in a [ 3D ] showing them exactly, after only 2 weeks what it is. Quick cost-saving decisions with less dependency on partners. Sometimes, we do work 1 year on a project. And at the end, authorities ask us to change something, then we go back to the acoustical specialist, and he says, no, if you do that, you will have to invest 100,000 extra because of acoustic issues. Thanks to this system, we can work in advance on those things. And if you have to adapt to it, we can do it without having to go to an architect and the building partner. It will shorten definitely the 18, 24 months' time line we have to build the club, which would be easier for our teams and partners to remember what was happening on all the projects we are managing. And on top of our existing expansion capabilities that makes it already possible to open up to 300 clubs, it is important to see because it is never done anywhere in the world by any fitness player. These improvements will be a game changer for our future also franchise plans. We can be in control -- in any country, we open clubs, we can be in control of the cost of the concept and help our partners to build the right Basic-Fit clubs. This brings me to my conclusion. We are on track to achieve what we promised. 2030, our historical growth will be achieved. As we speak today, we are offering in our countries around 1.8 million square meters of fitness playground. And by 2030, we will be offering at least around 4 million square meters fitness playground. The market-leading position we have in all our markets will be reinforced, including in Germany. And we for sure benefit from the rising fitness penetration rates by making fitness affordable everywhere, also in regional clubs and for everyone by optimizing the clusters in the clubs you already created. Remember the slide from René, 22% in the U.S., 8%, 9%, 12% or 17% in the Netherlands. No reason if we create the right base for all the inhabitants in our countries to reach that level on term. 3,000 clubs would provide us great scale opportunities to keep our costs under control. It was already helping us with the COVID to keep the CapEx under control at 1.2%. It will definitely even help us even more in the future. We will not stop at 3,000, 3,500 clubs. As already explained by René, we will add new countries and continue with franchise, more news to come in the coming 12 months. Our teams, systems and partners are perfectly aligned to make it happen. 30% return on invested capital important KPI for us and for you by optimizing our cluster strategy, by using innovations and technology to take the best decisions because we are the unbeatable value for money player in our countries. We are here, and we stand for long-term results. We are #1, but we are also working hard daily to keep the #1 position. Thank you very much. And I will hand over now to Rene for his conclusion. Thank you.

Thank you, Redouane. It's always fun listening to you how enthusiastic and data-driven you can present. Great. But you took a little long. So my conclusion is I'm going to do this instead of in 10 minutes in 3. Pay attention. These are all said before. I think it is clear, we're going to grow to 3,000, 3,500 clubs by 2030. But in the pausing -- in the break, I was talking to some people and they said, well, how many clubs are going to open next year or the year after? What I was trying to say in my presentation, that we will not communicate the amount of clubs we open per year anymore or where they are being built. So what we are communicating is that we will build between 3,000 and 3,500 clubs in total in 2030 and depending on the macroeconomics, what is happening in the world, we will speed up or slow down. We look at our balance sheet and we want to do it with the cash that we make and the bank loans that we can get. I think this is really important too as a key takeaway. And another question that came by I think my presentation was terrible because what I tried to explain in my presentation is that we also don't want to give numbers about members anymore. And the reason for that, it is not just about members. It is about a return on invested capital. It is about a total turnover we're looking for, and we will tweak. So that means for whatever reason, in some area, something will happen, maybe we will start again in that region on a lower price for just 1 club. So we will continue to think and change. If at the end, it shows that the premium membership cost us a lot, maybe we will raise the price or maybe we'll change that, too, you can take only 1 person a week instead of bringing unlimited people. So we will continue to tweak this. So it is not the KPI, how many members because if we take the yield per member have. Yes, we will have more members, but we will not be happy with that number. So the number of members is not what we're going to focus on. So these are the things what we have said during our presentation, and this is what we are going for the coming period. So it's about the 3,250 memberships on a mature club in time. The average revenue per membership, the head office cost between 6% and 7%, the marketing cost between 5.5% and 6%, the maintenance CapEx on EUR 55,000. I think it was also good how Hans explained it what the difference is for us when we have 3,000 clubs with the new contracts, the new Matrix contracts, where they visit our clubs every month and then we use the equipment, not all, not for 6 , but for 12 months, the thing is a dumbbell of 20 kilos is after 6 years, still a dumbbell of 20 kilos. So we can use that. Of course, when there's a computer in it, in a treadmill, yes, we need to change that. So partly, it's being refreshed, partly is being renewed, and it's a fixed set price. We are very happy with us. Why? In 2030, it will save us EUR 40 million a year. So the 13,000 times between 3,000 and 3,500 clubs is a real game changer in our model. And this way, we will make a return of 30%. This is a slide I really quickly want to discuss. Hans discussed it already. If you look at '24, '25 and '26, the average positive cash flow that we make is over EUR 250 million. So if you build 200 clubs, that is also EUR 250 million. So we expect the coming 3 years to be able to fund with the money we make ourselves around 200 clubs a year. Again, I'm not going to say we're doing 200 clubs here. I'm just saying we can fund it ourselves. We also still have cash on the bank, and we still have a EUR 150 million bank loan available that we can draw. So overall, we are in good shape. We will not go to the market if we do an acquisition for 50, 100 or 150 clubs. And again, in '27, '28, '29, you can do the math yourself, probably better than me. We get more clubs that are mature. So more clubs are mature, so that line will grow. So if we go to the next slide, I made this overview. If we build another 1,600 clubs x 1.25, we will spend around EUR 2 billion. In the coming 7 years, we will, for sure, make more than that. So we can build 3,000 to 3,500 with money we make ourselves. I think this is a very important slide because we get a lot of questions about, yes, how you're going to fund the growth? Well, we're going to fund it by the money we make and the credit lines that we have. So we will not come to the market to give out to get shares for money to grow with 200, 250 or 300 clubs. We will fund the growth to 3,000 and 3,500 clubs in those 6 countries ourselves. Did you get it, though? I'm just checking is everybody still awake? Okay. And then if you -- look, this is our last slide. And Richard wrote everything down for me because he always says, "I'm going all over the place, and I should stay in the flow." So I'm staying in this flow, and I'm going to read it up to you. On my final slide, I show you the conclusion from today. You can read it yourself. We ask Hans, Erica and Redouane want to come to the floor, and we will do some questions. This is something we have said during the presentation, and of course, you can look it up again.

So whilst everyone gets their chairs, I think that's an easy way to sit down. John David and I will be your microphone host this afternoon. We are a little bit attached to our microphone. So if you can just ask your questions maybe 2, max 3 then return the microphone and we really appreciate it. So first is...

Yes. Three questions from my side. My name is Hans Pluijgers. But first of all, on the franchisee plans. And I know we had some discussions also a few years ago, René, you were not in favor of franchise operations. So first of all, could you maybe a little bit explain what has changed your mind in this field? And secondly, you were completely referring to new countries. Does that only mean that in new countries, you will only go with franchisees or will that also be -- old clubs or could it be a mix because I think also -- yes, hopefully could maybe elaborate a little bit on that? Then the second question.

That was already two questions. So if you have too many questions, then it has become difficult. Let me give the first answer this, and then I'll come back to you. Is that okay?

Okay.

Good. I think when you look at the current countries, the current countries will stay with our own clubs. We will not do franchise in our current countries. So that's first. The beginning of the question, why franchise? I think we rather do something smaller, but really good than do it all over the place, mediocre. So we think that in those 6 countries where we are now, we can build 3,500 clubs. And that will be a busy job to keep those 3,250 members in, do it good, make sure the clubs are clean, that employees are positive to do that really well. That is a big job. I think that is it. That the 3,500 in those 6 countries, that is something we should be fully focused on. But we have all these systems in place. We have all the software to run a club perfectly. We have better software, I think, than anybody in the industry, and we don't do anything with it only in those 6 countries. We've been asked many times by people from India, China, Dubai area, if we want to give out the franchise rights. And actually, we have been also in those countries to talk about it even years ago. And every time we go, we went back, we said, no, we have to focus. We're not going to do everything. We have to focus on what we're doing. No, we have such a good head office. We have a top 20 that is really actually running the business. Hans is not doing anything anymore. I do very limited. So we have a very good team. So it is really time to also use the systems we have in place and really drive the fitness penetration also in other countries. But not by us, but by the franchisee. And we have a very good network already because so many people came to us who have very successful businesses with big hotels, restaurant, big retail names, so they know how to run a franchise business. So we are enthusiastic, but still a bit hesitant because I'd rather do one thing really good, then 2 things. It will also not be part of our current team, it will be a different company, the order of Basic-Fit, of course, but different people put it that way, different people running the franchise department if we go that direction.

Okay. Then my second question on the 2019, 2022 vintage and the growth there, that's a little bit, let's say, ingrowth is less than the older vintages. You already indicated that about 6%, 7% is coming from the price increases. And then of course, you have, let's say, the smaller clubs opened to the regional clubs. And of course, also from the premium membership. But if I add everything together, then it really looks, let's say, that still the growth is somewhat lower than you should have expected. Are you not afraid that you maybe cannibalize in that area, I'd say those vintages that are cannibalizing in existing members? And are there any difference, let's say, per cluster or you can really see differences, yes, per country or per cluster you could see -- really explain also a little bit more on that front?

What -- is this working, yes. What I said is that the 2019, 2020 and '21 vintages and especially the 2020 and '21 vintages are highly impacted by the COVID. So they now see a growth, but we see a growth in memberships. But definitely, they were impacted by COVID and we will get to maturity because we didn't make the same decision to select our clubs if we do all other clubs. They will be there and come there, but it will take more time. Normally, it takes 30 months to become mature, and 2 years starting calendar year, but now it will take more time. And the other thing is what I said that the '22 and '23 vintages were impacted more by price increase at one end, that's positive with a high cost. Obviously, those high costs were also there in the 2019 to '21 vintages. So that impacted that growth, but those clubs are still growing, those vintages are still showing growth. And still, we are very confident that they can reach the required levels to get to that 30% return. So now we selected every club also in '19, '20 and '21 based on the same calculations, as Redouane explained, every club at itself should reach that 30% return. So we're very confident that we'll get there, and it only takes longer.

Maybe also good that we always talk about 2020 and 2021 as COVID clubs. But of course, if you open a club in June 2019 and 6 months later you are closed or October '19, 3 months later closed, they are also hit very hard by COVID. So there's actually 3 years lost or not lost, but that are behind. And we had that before because we did 1 really big acquisition in the past with around 85 or 90 Fitness First clubs. And the Fitness First clubs that we bought, as an example, one in the Netherlands, we bought 8 Fitness First, bought it from somebody else. They changed it to Fitness First. We changed it to Health City. And year later, we changed it to Basic-Fits. So in 4 years, there're 4 different labels. That club went terrible so because everything changed all the time. So the first had saunas, then they had free drinks, then they pay for drinks. So it was going all over the place. So the experience for that member was terrible. That club, that particular club, is now in our top 10 most profitable clubs in all of Europe. So it -- but it was terrible. So we -- after 4 years, we were thinking about canceling the contract. We talked to landlord, can we get rid of this club? And we couldn't get rid of it. And now it's one of our most successful clubs. So if you open, close, open, close mouth, get reservation only in the evening, not in the evening, and you have that in your membership, that is a terrible experience. So that takes time to grow over that and have new members joining who don't have that experience. So it's just going to take some more time. But we are convinced. It is not that in 2018, '17, '16, we knew to pick the right clubs, then 3 years, we're completely blind, '19, '20, '21, the worst club ever. And then in 2022, we picked the right ones again. And '23, again, the right ones. Now it didn't go like that. It just went, COVID, close, open, close, open mouth gap, [ no mouth gap ]. It was terrible. It takes more time. We don't know exactly how much more time. But we are convinced that they are the right clubs in the right locations. So we are convinced that we will reach the 3,300 members. We just don't know if it's going to take 1, 2 or 3 more years.

Kris Kippers, Banque Petercam. Good news. I only have 2 questions. First one, you started your presentation on the number of openings limited only to 200 this year because it was a management decision, not a balance sheet decision. To what extent is this true in a sense that do you have some comments from the banks or like on the cash position on H1, which was quite close to a low level, of course? Is that something which is taking that into account. If you look at your long-term guidance also there, you've given some flexibility. So what is equilibrium? Is it balance sheet? Or is it cash flow generation? What is that you're searching for?

It's a combination of things. Hans, maybe you want to address?

Just like you said, it's a combination of things. So we look at the balance sheet, we look at the cash flow generation that we do. We look at the macroeconomic development, what's happening in that country, then we decide how many clubs we want to open that year. And it can differ in a quarter because then some thing some change. We had the search of energy cost after the Ukraine war, yes, then we have to decide that we didn't want to open 300 clubs, we minimize that to 200. So we lowered the expectation, lower the targets. That's why I'm also very happy that we say, we don't give any guidance anymore per year. We want to grow to the 3,000, we got totally aligned with, but we don't give any guidance per year because it can differ. And if the situation improves and economic situation improves, and we are better performing, then we can open more clubs.

Okay. Second one, it's good as you indeed indicate that the average yield per member also takes into account of the commercial efforts that you're doing. We're seeing quite some aggressive commercial activity right now, for example. But you're not providing that number in the future, you're going to say, but could you share with us today what the impact is of the premium membership on the average yield, if you take it on an entrance level? Is that possible? Or you don't have the information?

It's possible, but I don't want to get into too much detail. I think you can do the math. If you look at the 55% plus uptake of the joiners and the base will grow to 44% and were part of legacy members, of course, and the remaining part is the comfort members. So you can -- I think you can calculate much better than I can do the impact of the premium membership on the yield. But that's a positive impact, definitely. Negative is the year cannibalization, positive is the plus in yield.

Okay, who else wants to ask a question on this side. Anybody else we go...

Great presentation. So for the regional clubs that require a higher fitness penetration than other regions. So what's the pace of scaling in that area? Because I guess you need to convince higher percentage of the people in that catchment area to go to the gym?

What we do is actually calculate the amount of people live in the catchment area. So it's like when I started saying, also Redouane very elaborately explained the proximity, being close to the club is most crucial part of joining a club. So we make a decision, if we can open a club there, we, in detail, look at the population in that area, the catchment area, and that's just 2 kilometers around the club. So we look at that density of people, also the competition is there, and then we calculate how many members we can get. And based on those members, we calculate if we can get to the 30% return.

Time to maturity, how much does it differ versus regular gym?

Yes. That also depends on the competition that's there. So let's say we need with a fitness penetration of 10%, we need around 30,000 people in that catchment area to make a really profitable club. But it varies per city. And other young people living there, old people. It's a really a variety of decisions that we look at before we open a club.

And for Germany operationally ramping up the gyms. So what are the challenges? Because we've seen that the lower tier of pricing is 20% versus 45% with and therefore, they got this way bigger than the other countries. So what's there?

I think due to our position now in Germany, we only have 12 clubs. We are using now the lower price of 90 or 99 for 4 weeks to try to attract more members. But now actually, the results in Germany are not important for us at this stage. We are now building confidence in Germany and knowledge. And once we will start creating clusters, then we will think about the strategy, but now having to face competitors offering 6 months for EUR 1, we have to offer something to attract little bit members to Basic-Fit clubs.

Marc Zwartsenburg, ING. Hans, you showed us a slide with the average mature members per club of 3,250 per gym. Can you maybe give a bit of color on how you get to the 3,250 per gym? And is that only the effect of the -- temporary effect of the rural area mix? Or should we see that back to 33 on it after some period when you roll out in Germany into the larger cities again?

It's a mixed effect, Marc. It's the regional clubs? Don't -- I'm not allowed to call it rural anymore from where you want, so let's talk about regional clubs. That impact, of course, for the new openings, but also in the opening before. You see the impact of the cannibalization of the premium membership. It's including the 21 vintage now in a mature club mixture. So it's a combination of all those developments.

Higher price.

High pricing. High prices we charge. So all combined, it is -- makes up to those 3,250 a bit lower than we had before. You can also remember that first, we thought that we could go above the 3,200, but now with all the impacts that we see, also the price increase, yes, we think we're very happy with the results we can make with a mature club of 3,250 members. Of course, it's more important to get a high yield on higher revenue than just members just like René explained.

So that's the number we should use towards 2030?

Well, I'm not going to give any guidance how that will evolve because as you said, we will open less regional clubs. We have to look at how the development in Germany will go. So I'm not going to say we will have that forever. But for the midterm, like I said, this is what we expect to have.

Okay. The other question is, I think, Rene, you mentioned it's getting this year in the clubs because of the premium uptake, and those are more frequent gym goers. How do you deal then with the comfort level still in the gyms? How do you see that? How do you deal with that? Because it might lead to higher churn and people have to wait for the free weights action or what have you.

Yes. So on the Redouane slide, you could see that the average size of a club is 1,300 square meters. So we have 1,300 square meters average size. So we compare that to Pure Gym, the gym group change like that, they are similar, and they, on average, have like 5,000 members in it. So it is not an issue. In our clubs, you don't have to wait for equipment. So we think 3,000 or 4,000 members. The box is big enough and the amount of equipment is also big enough. But what we do see, which is something we have to think about is that with the same amount of people, members, we have 20% more visits. And that comes out of the premium. Maybe it's even good. So maybe a big group of those people who came for free becomes a member. Maybe it is good because the premium members stay member longer because it's more fun to work out with 2. So what we've tried to say here is we're going to look at it, and it is easy to tweak because if we only do 1 thing, saying, okay, you can bring only 1 friend a week, then the problem is already solved. So it is a problem, but it's not a problem.

Two questions. First, could you talk about the deal with Matrix? And like, obviously, it seems like a home run for you guys and what that might involve on your part for them?

Yes, I cannot talk about how the deal looks like, but it's a long-term contract. It is -- we are really happy with the Matrix as a partner, they give us great service. And they're also willing to invest in a factory in the area where we are. So not to make the whole machine, but to put the machine together so they can more quickly react if something is broken. And we also changed the level of visits. But because we made a long-term commitment on those clubs that we are buying or equipment on the clubs that we're buying, they also, for them is also more easy that they have all our clubs and that they can make the planning for their staff much better. But no, we cannot exactly elaborate how it is. We did give you the numbers, so you can -- you know that the length of the equipment that we buy will be 12 years, meaning if we buy 100 clubs today, we will be in business with Matrix for the next 12 month -- 12 years.

Okay. And next question, so we can model like the puts and takes of ARPU moving forward. Like could you remind us the founding members, how -- like what percent of clubs you are sort of?

The family members, you mean?

The founding discount, like a founding member discount, like what...

Founding member discount. It also varies where we started with the investment. Maybe Erica, you can explain that better. The price point of the founding members.

Yes. So we started with 1,499. That's how we started it to really see like is it boosting enough sales. And now for January, we are testing with 1,999 to have a bit of a less promo, but still for life. So still.

And what percent of like new club openings on average, would you say you're sort of testing this out on?

We do it for -- we did firstly the test to look at all new openings and start with founding them. And what we see is that for non-cluster clubs, so stand-alone clubs, it's more -- makes more sense to do it there and for all clubs. If you do it in a cluster, then you more or less cannibalize the other clubs because everybody then comes with founding members in other club. So we do it now in non-cluster clubs. So not every new opening, we do the founding members. And especially in Spain, we have really good results there for founding member campaigns. We were tweaking that. We're constantly monitoring that the results are what happens after that first month is also something that we look at. So it's constantly changed, and we're very flexible with that.

And what you also see is that people who started with the 1,499 founding member price, is grading up to a premium membership or to a comfort membership because they want to visit more clubs. So it is work-in-progress. It is too early to say exactly where is it going. We do know that it works, so we will definitely continue with it. And we will A, B test the 1,499 and the 1,999, and we will see, but it's something you have to take over time.

Robert Jan Vos, ABN AMRO. I have a few questions. You will no longer comment on club openings and new membership, so that's pretty clear. But I remember earlier this year, you hinted that also for next year, the number will be around 200. Should we ignore that now or is that still a valid assumption?

Robert Jan, you should not ignore it, but it's -- we don't want to give guidance on the 200. And I can promise you it would not be 10. So if you look at the first quarter, we'll plan to open already, around 80 clubs in the first quarter. So it will still be really a significant number. But we don't want to give guidance anymore on 200 because then we get punished when it's 198. So it's around those numbers, but we don't want to give a yearly number.

I think what we will show is that list that we have shown today. So you see on that list, 83 clubs under construction, so they will be open within 12 months -- 12 weeks after construction. So they will open in January and February. That's 83 clubs. That is clear. Then you see you at least signed those clubs also will be opened because the contract is signed. It doesn't mean they're going to be open next year because sometimes we sign a contract for locations going over in 2, 3 or 4 years with a new building that still has to be built. But on that list, you can for yourself make a good, say, okay, so many are in construction, so many are already signed, so you can have a good feeling where that is going. But the good thing for us is that like if what is happening, the terrible thing that's happening in Israel-Hamas, if that gets even worse, it's hard to believe it can get worse. But let's say it even gets worse, then we will slow down for sure, or other things get worse, yes, then we will slow down. And that is good, a good thing for us that we are able to slow down. So we will not give guidance on clubs anymore in the coming years, unless the world is becoming totally normal again, which -- yes, which will be.

Okay. That's very clear. Then I have a question on CapEx, you provided a pretty reassuring longer-term guidance on maintenance CapEx. However, for the expansion CapEx, you are only apparently confident to say that it will be EUR 1.25 million in 2024 and 2025. What do you assume for the years thereafter, a normal level of inflation on that? Or can you comment on that, please?

Yes. I think so for the next 2 years, it's sure because we will obviously sign the contracts. Equipment has even signed a contract for 3 years. So there is also assured the amount in the year later. But yes, it's hard to say. So what is the inflation is going to do in the next 2, 3 years? So it's -- I think taking the inflation number into account could make sense.

It also depends on where we want to open the club, right? So we speed up in Germany and select the clubs and city centers, maybe the building cost will be a bit higher. If we then go to the smaller cities in Germany, the building cost could be lower. So it's too far ahead to say something about '26, '27 for those as mentioned for '24, '25, as Rene said, we're very confident that we can keep it on 1.25.

I think for the spreadsheet, if you take it longer, that would make sense.

Again, very clear. And then my last question, it seems to me that you talk a little bit more about M&A about the potential of doing M&A. I assume, but maybe you can confirm that it is still highly unlikely that you will be interested in a second brand. And related to that, would you consider acquiring, let's say, a small chain for a per club cost that is higher than your greenfield cost of building a new club yourselves.

Yes. I think to have a second brand is highly unlikely. It's like not going to happen. That is unlikely. But yes, if you can buy a small chain, which is more expensive than building our own clubs, that could be interesting if they have good rent contracts. So the rent contracts they are having are better than what we can get. We are willing to pay a premium for that. So yes, that could be interesting to pay more than building a new club for 1.25.

Yes, also taking account if you -- it's a hypothetical, right? But if you pay more for that club, we also don't have opening losses. We had that in when we build on own club, he have the ingrowth. And if you buy a club already with the 60 members, you're immediately cash flow positive. So that could also be a reason why we pay slightly more for a target.

Yes. I think maybe to the acquisition, again, we will only do an acquisition if it really makes sense, if we can make return. If we cannot make the return, we will not buy to have more clubs. That is -- we're not interested in that.

I see someone in the backyard.

Ed Young from Morgan Stanley. On the -- first question on the franchise. I appreciate you said you're doing work, you have made a decision. So there's obviously a lot of unknowns. But just in terms of your thought process around doing it. Is it that you have the software, you could put it to use, so you can make some incremental profit and therefore, any amount is a good amount in that sense, minus the distraction kind of cost perhaps? Or is it something where you'd only really do it if you could get to a significant scale because obviously, the profit franchise is going to be very low. Do you have to get to a big scale to think it's worth it in the context of what you also spoke about, which was focus?

Yes, for sure, the second part. So if we do it, if we spend time and money and focus on it, then we think it can be very big.

Okay. And then the second one was on the cluster management. You spoke a little bit about the sort of shift looking at cluster management, but you're very light on what the options were you spoke about rebranding to a club of free weights or something like that. Could you elaborate a little bit more on what you see as the potential options within that? And perhaps within that, can you talk about churn of clubs. You sort of suggested that the mindset originally, maybe you closed some and in the end, they're all profitable. But is there perhaps a stage where you'll be looking at higher closures or churn of sites to sort of factor into your net new openings, if you like?

Yes. So I think actually after 10 years when we have to renew our lease contracts, we have to take a look back to the club we signed. Are we happy with the return we had -- and is the place that we signed 10 years ago is still the place to be? Or maybe there's another retail center 2 kilometers further from there where a competitor is going to come soon. Many different things to take a look at. Like most importantly, by managing the clusters is collecting insight from our members and better responding to their wishes in the clubs. Right now, we build all the clubs, we create clusters and we built all the clubs with the 7 areas we have in the club, but now we know, for example, now in Amsterdam, we have some clubs really much more visited for the free weight area. So maybe it makes sense to have 3 clubs in Amsterdam when we renew these construct and we rebrand the club, where we will be double the size of the free weight area and put less cardio because we also measure the use of cardio machines, for example. So it's about better responding to the wishes of the people leaving and visiting the club to improve the profitability of the clubs. And maybe yes, but it will be a limited amount, sometimes you will have to close a club and open a club 500 meters further from there because this is a new place to be or maybe because we don't have a good agreement after 10 years or 15 years, so renew the lease contract, and we get a good opportunity from another landlord to rent a comparable-sized location for 100,000 less for year, for example. So those are things that you will have to study based on track record, but we have all those figures, which is much more easier for us to improve the return than basing our return on expectations and business cases, what we know with a lot of success, but it will be much better in the future by managing the customers.

Yes, I have no mic so.

Jeremy Con with North Peak. Can you comment a little bit more on rolling out the smart cameras in Spain and also in France, if you can possibly accelerate that and take more cost out of the clubs.

Using a smart camera, Spain and France.

Yes. So the smart camera system is at this moment not allowed in France. That's why it is not operational. We use the camera set because for safety reasons, and we use it for fraud reasons, for example. In Spain, it is allowed, Germany, it's also allowed. So the next country who we'll roll it out will be Spain and the country after we roll it out, it will be Germany. We are working on it with the French government. We are explaining that the fact that we work with the camera system that it is actually much safer with 1, 2 or 2 people. If you have 2 people working together, they will have lunch together and they will smoke outside together. So it's better to have 1 person in the club because then they will always focus on talking to the members. But of course, if you have 200 square meters and you have 1 person, it is good to have those cameras that you can push a button and you get help. So for that, it is good to have it in France, but we cannot use it yet to be unstaffed. But in all the other countries where we are, it is allowed. So the first step is we have now 330 clubs in the Benelux to bring it to, say, 500. Then we go to Spain. Then we focus on Germany. And eventually, hopefully, we will get agreement with the French government. But what we've shown, I think, in -- on the slide that it saves a huge amount of money, right? So with the opening at night and with staffless instead of staff starting at 6:30 or 7 in the morning now starting at 8:30, you can also get more people who are willing, bring the kids to school and start at 8:30, but also not working to 11 in the evening, but now until depending big city till 10 or 10:30; smaller cities, 9:30. So you save a lot of hours and also when, let's say, an employee overslept or it's in a traffic jam, the club couldn't open. Now we can just open it from our head office. So there's a lot of advantages in building the system. It is not only that it's staffless. We have a lot of young people as customers. So they come in to our turn style with 2 friends as a ping wing. So they can go all on 1 pass. But with the cameras, we see, hey, 3 people are coming in. So then we automatically software build, send them an invoice of 2 extra friends that they bring for EUR 10. And we will tell them, great you brought your friends; next time, please register because we really want to be to see who the members are who are in the club. Of course, that helps us. If you don't do that, then they all -- then we have. I think the biggest number was 7 people. I don't know if you know but they were hanging in there, going like this. So we were happy we had 6 to 8 passes. But the thing is it has a lot of advantages, and we're getting better at it. So we keep improving that software system.

[ I kept it. Take it from [indiscernible] the announcement, [indiscernible] to value [indiscernible] [ 60% ] premium [indiscernible] has developed or is it confirmed and the value [indiscernible] . ] So it may come to moving.

[indiscernible] [ premium litmus hub ], [indiscernible]things. So if you now look at the premium membership, it is 55%. So 55% of the joiners take premium membership. The difference is EUR 5. But what is happening is that a lot of people using it with 2 people in the family. So we have now not getting EUR 30, but we're actually getting EUR 50. So we think that is a driver of that 20% more people that are actually visiting us. So the premium membership, in the beginning, we thought it was great EUR 5 extra. Now we're thinking, well, maybe it is not that great because more people are taking advantage of that one membership. So this is something we have to look into. Another thing is because the difference is EUR 5, right? So it's x13 because we have 13 periods of 4 weeks. So that is where we get extra, but they don't pay an entry fee. They get a discount on [ younger ] of EUR 2 50 months. So the difference, so no entry fee and the discount on [ younger ], the difference between comfort and premium is not that big. So we are not convinced that this is the right price. So maybe in the near -- in the future, we will tweak it. So for us, it's not a problem when people -- more people buy comfort, long story short.

And on the efficiency on the [ above it ] [indiscernible] above it so [ 8% above ] for the fitness.

After we rebuild them 100%.

Yes. I think when you look at, for us, an ideal location, if the ceiling is high. So in that way, the ventilation is better and so high ceiling is for us better. So sitting in office centers is less good because then it's normally 2.8 meter or 3. That's a bit c***. So preferably we sit not with people sleeping on top of us. So we'd rather have a stand-alone building because somebody drops a dumbbell and when you sleep on top of it, it is not so nice, not always so nice. So there's a lot of different reasons why we would prefer to pick this building over that building. But yes, I would say less than 1% of our building is built as a gym. So 99-plus percent is built as a garage or as a storage or whatever.

I just heard from our chief operator that we have time for 1 more question.

Yes, when I look at the time, I'm not sure if people want to leave. And after this meeting we have, of course, time to just chat informally, but then we can get close official part of today.

I've got three questions, but...

We only do two.

You're one person.

The limit is, we only do two.

Okay I will do 2.

The third one we will do at the bar.

So a problem from investors' perspective has been that financial numbers are missed, but openings generally has been achieved and raised and in the medium term, given the lack of openings guidance or profit guidance, this means consensus could be quite wide in the nearer term. So how will you manage your message to the market to get on that journey of hitting and beating numbers that public markets like so much?

Well, if you look at the slide that I presented about the free cash flow, we, of course, give guidance in a certain range about our free cash flow that we expect in coming years. So if you do the math, you can also calculate the range that we use for adjusted EBITDA. So we give some guidance, but we don't want to give very detailed guidance. And I think the market understands that because a lot of circumstances in which we can't reach that guidance out of our control. And we are very happy, but the market isn't. So we don't want to give too much guidance. But if you look at the slides that I presented about free cash flow, you can do your calculation. So that's part of the guidance. And about the amount of clubs, we said we want to open and end with 3,500 at 2030. So then you can also calculate how many clubs we still have to open in the coming 7 years. So I think that's also a reasonable guidance. And it's not going to be 200, 200 or something that we don't want to give those numbers. But you can rest assured that we will open at least 1,600 clubs in the coming 7 years.

Okay. That's helpful. And then your leverage guidance is less than 2x in the medium term; in which year do you think you can get there?

Well, we -- at half year numbers, we're around 2.6. I think next year, we'll be around 2 and so in '25, so it would be below, but then give guidance right. So I have to be careful. It's a tricky question that you -- in the midterm, we'll be around 2.

It's all around.

She tricked me.

Does that mean I'm allowed third question?

Okay. Thank you very much for joining. I think we can continue the conversation in the bar when we go out to the right. People have been here before I know where it is, then we can have some further questions and answers, but then with some drink. Thank you.