Stewart Miller, managing director,
David Lloyd Leisure
Deutsche Bank, July 2004
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What is David Lloyd Leisure?
• UK’s
biggest health & fitness club brand by market
share
—
£201m revenues in 2003/4*
• Europe’s
biggest tennis club operator
—
550+ tennis courts (50% indoors)
—
More than 9,000 children on junior tennis programme in UK
*UK and Eire clubs only
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Profit growth (£m PBIT)
2001-2004
60
50
50
49
43
40
34
30
28
20
10
0
2000/1
2001/2
*includes operations in mainland Europe
2002/3
2003/4
2003/4*
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Return on capital employed
2001-2004
12.00%
10.30%
10.00%
9.50%
9.10%
8.00%
7.60%
6.60%
6.00%
4.00%
2.00%
0.00%
2000/1
2001/2
*includes operations in mainland Europe
2002/3
2003/4
2003/4*
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Differentiation
More than ‘just a gym’
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Differentiation
a family club
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Turnover of UK private health &
fitness club market (£bn at current prices)
3
2.84
2.5
2.06
2
1.85
1.67
1.5
1.75
1.43
1
0.5
0
2000
Source: Mintel
2001
2002
2003E
2004E
2007E
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David Lloyd Leisure
brand strategy
• Drive
returns from maturing UK estate
• Develop
retail sales
• Organic
growth of UK operation
• Explore
International opportunities
• Leverage
• Market
the brand
consolidation?
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Drive returns as clubs mature
• Grow
membership sales
—
Improve pre-opening marketing on new clubs
—
Drive off-peak memberships in established clubs
• Productivity
—
Better labour scheduling
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Grow retail sales
• Tuition
—
PT
—
Tennis
—
Swimming
• Hospitality
(F&B)
—
Broaden occasions
—
Operational excellence (standards/margin)
• Partner
leverage
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Organic growth
• Target:
100 clubs in UK
and Eire
—
56 clubs today
—
5 clubs under
development*
—
c.75 additional sites
identified
* local planning consent secured
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Overseas markets
• Identify
•
markets of significant opportunity
—
Spain
—
Benelux
Secure local operating expertise
• Operate
as stand-alone businesses
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Overseas markets
•
•
Netherlands
—
Acquisition of Cannons Health & Fitness BV in December 2003 for
£22m
—
5 clubs open at time of acquisition with 20,000 members
—
7 clubs open by 2005
Belgium
—
•
First club opening in Brussels in November 2004
Spain
—
First club open in Barcelona in 2005
—
Additional sites sought in Madrid and other major cities
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Brand leverage
• Build
—
on brand reputation
Extend awareness
• Adjacent
markets
—
personal training
—
retail products
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Consolidation?
• Opportunities
will arise through market
consolidation
• Particular
about assets; disciplined on price
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Appendix
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a Whitbread perspective
DLL’s share of group operating profit*
David Lloyd Leisure
16%
Marriott 23%
£49.1m
High Street 9%
£72m
£29m
£74m
£84m
Travel Inn 24%
Pub restaurants 28%
*2003/4 PBITA,
excluding associates
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a Whitbread perspective
DLL’s share of group net assets*
David Lloyd Leisure
17%
£515m
High Street 4%
Marriott 37%
£113m
£1,158m
£734m
Pub restaurants 24%
£545m
Travel Inn 18%
*2003/4 net assets
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Operating margin
2001-2004
30.00%
25.00%
23.70%
20.40%
24.10%
20.90%
20.00%
15.00%
10.00%
5.00%
0.00%
2000/1
*includes operations in mainland Europe
2001/2
2002/3
2003/4*
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Membership growth 2001-2004
400,000
344,113
350,000
322,974
309,819
300,000
278,837
250,000
245,056
200,000
150,000
100,000
50,000
0
2000/1
2001/2
*includes operations in mainland Europe
2002/3
2003/4
2003/4*
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David Lloyd Leisure
Standard Information
David Lloyd Leisure
Mature
00/01
01/02
02/03
Full year 2003/04
03/04
UK & Eire
Europe
Other
Total DLL
Mature
00/01
01/02
02/03
Full year 2002/03
03/04
UK & Eire
Europe
Other
Total DLL
Headline financials
Sales
£m
153
4
15
15
0
187
1
14
202
146
4
12
6
169
0
14
183
Club PBITDA
£m
73
2
5
5
0
86
-1
1
87
72
2
4
0
78
0
1
79
Club contribution
£m
58
2
4
4
0
67
0
0
67
56
2
2
0
60
0
0
60
Central costs
£m
-2
-16
-18
0
-16
-16
PBIT
£m
49
43
PBITDA
£m
70
63
Net assets
£m
Capital expenditure
£m
388
10
34
48
10
490
31
-6
515
385
10
33
44
472
5
38
0
476
0
54
Key operating measures
Like-for-like sales growth
%
3.8%
5.2%
17.6%
5.2%
Club PBITDA margin
%
48.1%
54.4%
35.2%
34.7%
-209.5%
45.9%
-4.8%
49.0%
54.4%
29.1%
7.8%
46.1%
Revenue per average member
£
£602
£509
£595
£555
£101
£593
£139
£599
£491
£622
£486
£593
#DIV/0!
EBITDA per average member
£
£289
£277
£210
£193
-£211
£273
-£7
£294
£267
£181
£38
£274
#DIV/0!
Retention rate
%
ROCE
%
14.9%
18.8%
10.2%
7.9%
-2.5%
13.6%
-0.9%
9.5%
14.5%
17.6%
6.5%
-0.3%
12.6%
Operating margins
%
37.9%
45.8%
23.9%
24.7%
-231.3%
35.7%
-18.5%
24.1%
38.1%
45.5%
17.2%
-1.9%
35.3%
35
8
1
2
3
3
3
1
0
42
14
2
3
35
8
1
2
3
3
3
41
14
43
1
5
6
1
56
5
4
4
44
17
4
65
43
1
5
6
55
5
5
41
14
5
60
256,057
7,719
25,848
29,447
2,110
321,181
21,139
1,793
344,113
250,559
7,833
23,311
25,996
307,699
2,120
309,819
73%
0%
76%
0.0%
9.1%
#DIV/0!
23.7%
Number of clubs/members
Tennis
H&F
Other
Total Clubs
Members (closing)
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Glossary of terms
General
Like-for-like sales
Period over period change in total sales, less sales generated by businesses acquired or disposed of and retail outlets opened or
closed during 2002/3 and 2003/4
Return on Capital
Employed (ROCE)
Operating profit divided by period end net assets. (Where average ROCE is quoted it is based on the average of opening and
closing net assets.)
Operating margin
Operating profit expressed as a percentage of sales
David Lloyd Leisure
Club EBITDA margin
Club contribution before depreciation, amortisation and central costs divided by club sales in the period
Revenue per member
Club sales divided by the average of the opening and closing number of members
EBTIDA per member
Club operating profits before depreciation, amortisation and central costs divided by the average of the opening and closing
number of members
Retention rate
The percentage of members at the start of the period who are still members at the end of the
period expressed as a percentage of members at the start of the period
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Stewart Miller, managing
director, David Lloyd Leisure
managing director, David Lloyd Leisure since May 2001
executive director, Whitbread PLC since May 2000
Career high lights:
•managing director, Pubs & Bars @ Whitbread
•managing director, Whitbread Pub Partnerships
•chief executive, Pizza Hut (UK) Ltd
Non-executive directorships:
•Business in Sport & Leisure Ltd
•Skills Active (sector skills council)
Age: 51
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management team
David Lloyd Leisure
•Eric Dodd, finance director
Appointed: 2004
Career high-lights: director financial planning & analysis, Whitbread
PLC (corporate)
•Grant Wright, sales & marketing director
Appointed: 2003
Career high lights: operations director, David Lloyd Leisure; area
manager, Holmes Place
•Zoe Flower, operations director
Appointed: 2004
Career high-lights: operations director, Café Rouge
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management team
David Lloyd Leisure
•David Penniston, property director
Appointed: 2003
Career high-lights: head of UK development Waitrose; head of
property & development Savacentre
•Louise Smalley, human resources director
Appointed: 2003
Career high-lights: director compensation & benefits, Whitbread
Restaurants
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Overseas management team
David Lloyd Leisure
•Julie Porter, country manager, David Lloyd Leisure,
Spain
Appointed: 2003
Career high-lights: area manager, David Lloyd Leisure
•Thijs Merks, country manager, David Lloyd Leisure,
Netherlands
Appointed: 2004
Career high-lights: operations director, Accor Hotels Netherlands
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