Niels Gronau Senior Manager - Deloitte s Sports Business Group
EHFA/Deloitte The European Health & Fitness Market Report as of 31.12.2013 Niels Gronau
Detailed research led to a comprehensive picture of the European health and fitness market Methodology What we have done General research work And what we achieved Insights in existing market reports, data on equipment industry, M&A activity Identification of individual and chain operators in eleven countries Detailed club databases on national level Online questionnaire in resp. language for individual club operators Data of approx. 500 individual clubs in nine countries Questionnaire for major chain operators Detailed information on major European operators Interviews with selected industry experts Educated assessment of industry s state and development 3
The EHFA/Deloitte market report examines the industry from various perspectives Content Leading players rankings and detailed profiles Merger & Acquisition activity overview Snapshot of the fitness equipment industry Key facts of the Eurobarometer on sport and physical activity Top markets overview and detailed profiles 4
UK operator Virgin Active is leading in Europe with total revenues of EUR 532 million Top 10 by revenues Virgin Active David Lloyd Leisure Health & Fitness Nordic McFIT HealthCity/Basic-Fit Fitness First Nuffield Health Holmes Place Group INJOY Russian Fitness Group Revenues in EUR million 0 100 200 300 400 500 Source: Company information, Deloitte analysis. 5
McFit is the market leader by members with 1,204 million customers in Germany, Spain and Austria Top 20 by members McFIT HealthCity/Basic-Fit Virgin Active Health & Fitness Nordic Fitness First David Lloyd Leisure Fitness World SportCity/Fit4Free Pure Gym Nuffield Health Alex Fitness Kieser Training DW Sports clever fit Curves INJOY The Gym Group Holmes Place Group Mrs.Sporty ACTIC Source: Company information, Deloitte analysis. Members in thousands 0 200 400 600 800 1,000 1,200 6
Our report contains detailed individual profiles of the major fitness club companies in Europe Sample operator profile Source: Company information, Deloitte analysis. 7
Since 2011 almost 30 transactions including European fitness operations took place Selected transactions in the health and fitness industry Date Company Country Seller Bidder 2014-02 Pure Gym, The Gym Group GB CCMP Capital Advisors/ Phoenix Equity Partners Merger 2014-02 Russian Fitness Company RU Alfa Capital Partners Goldman Sachs/VTB Bank 2014-01 INJOY DE/CH Inline Consulting GMZ Germany Holding GmbH (Migros Zürich) 2013-11 Basic-Fit NL Founder/owner 3i Group plc 2013-09 HealthCity International/Basic-Fit NL Waterland Private Equity Founder/Owner 2013-09 Xercise4Less GB Founder/owner Business Growth Fund 2013-09 David Lloyd Leisure GB London & Regional Partners TDR Capital 2013-08 Jumpers Fitness DE Founder/owner NORD Holding 2013-06 SATS, Fresh Fitness, Metropolis; ELIXIA Nordic NO/DK/ SE TryghedsGruppen; Altor Equity Partners Health & Fitness Nordic (Merger) 2013-06 The Gym Group GB Bridges Ventures Phoenix Equity Partners 2013-05 Pure Jatomi Fitness PL Michael Balfour (private investor) John Caudwell (private investor) 2013-05 Pure Gym GB Magenta Partners CCMP Capital Advisors 2013-01 SATS (DK) DK Health & Fitness Nordic Fitness World Source: Company information, Deloitte analysis. 8
The seven leading manufacturers represent almost half of the total fitness equipment market Major players in the fitness equipment market (market shares) Icon Health & Fitness Others 12% Life Fitness 12% 51% 8% Technogym 8% 6% 2% 6% Precor Johnson Health Tech Cybex Nautilus Note: Selected manufacturers include Life Fitness, Johnson Health Tech, Technogym, Precor and Cybex Source: Company information, Deloitte analysis. 9
After the crisis from 2007 to 2009 the fitness equipment suppliers recovered strongly Development of selected fitness equipment manufacturers 1,900 1,700 1,500 1,300 1,100 900 1,048 11.0% 1,164 9.5% 1,274 14.2% 1,455 1,522 4.6% 1,361-10.6% 1,162 15.3% 1,340 12.9% 1,512 1,690 1,731 11.8% 2.4% 20.0% 15.0% 10.0% 5.0% 0.0% -5.0% -10.0% 700-14.7% -15.0% 500 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 Net Sales Growth Rates -20.0% Note: Selected manufacturers include Life Fitness, Johnson Health Tech, Technogym, Precor and Cybex Source: Company information, Deloitte analysis. 10
in % Sports participation in European health and fitness centres increased from 2009 to 2013 Playing sport regularly or membership at health or fitness centre 16 14 12 10 8 15.0 6 4 11.0 9.0 11.0 2 0 Sport at fitness centre Member at fitness centre 2009 2013 Source: Special Eurobarometer 2013 SPORT AND PHYSICAL ACTIVITY 11
in % Eurobarometer results show highest participation in Denmark and Sweden Membership at health and fitness centre 35 33 30 25 20 15 10 5 0 25 18 19 16 15 14 13 13 12 11 11 10 9 9 7 7 6 6 6 5 4 4 4 4 3 2 1 LT BG LV EE FR HU RO SI IT PL PT HR MT CY SK ES BE EL CZ LU FI DE IE AT UK NL DK SE Member at health and fitness centre Source: Special Eurobarometer 2013 SPORT AND PHYSICAL ACTIVITY 12
Analysed markets recorded EUR 21,672 million or 86% of total European fitness market (EUR 25,300 million) Major markets in the European fitness industry (market shares) Others UK Belgium Sweden 2% Poland 2% 3% Switzerland 4% 14% 19% Turkey 4% 5% 18% Germany Netherlands 8% 9% 12% Spain France Italy Source: Deloitte analysis; DSSV, DHfPG, Deloitte: Eckdaten der deutschen Fitness-Wirtschaft ; The Leisure Database Company: State of the UK Fitness Industry Report. 13
Average fitness penetration in analysed countries is 8.5%, while Turkey indicates highest growth potential Fitness penetration rates in analysed countries Netherlands Sweden Switzerland United Kingdom Germany Spain Italy France Poland Belgium Turkey Penetration rate 0 2 4 6 8 10 12 14 16 18 in % Source: Deloitte analysis; DSSV, DHfPG, Deloitte: Eckdaten der deutschen Fitness-Wirtschaft ; The Leisure Database Company: State of the UK Fitness Industry Report. 14
Turkey and Poland show the by far highest average growth rates of more than 20% Changes in membership in analysed countries Turkey Poland Italy Sweden France Belgium Germany United Kingdom Netherlands Switzerland Spain Change in membership 0 5 10 15 20 25 in % Source: Deloitte analysis; DSSV, DHfPG, Deloitte: Eckdaten der deutschen Fitness-Wirtschaft ; The Leisure Database Company: State of the UK Fitness Industry Report. 15
Looking forward operators in Sweden are most bullish, in contrast the Spanish are the least optimistic Expected increase in revenues for 2014 Sweden Poland France Turkey Switzerland Belgium Italy Netherlands Spain 0 10 20 30 40 50 60 70 80 90 Increase 2.5-7.5% Increase >7.5% in % Source: Deloitte analysis. 16
All analysed country markets are presented with individual profiles in the report Sample country profile Source: Deloitte analysis; DSSV, DHfPG, Deloitte: Eckdaten der deutschen Fitness-Wirtschaft. 17
EHFA/Deloitte European Health & Fitness Market Report Epilogue / Questions & answers We would particularly like to thank all operators, suppliers and other market experts that shared data about their companies as well as their views on the industry. We hope our work captures your interest and will be valuable for your business. We would be grateful to receive your feedback and contributions for upcoming market surveys. Only with the collaboration of all market participants can we obtain the quality of information that is necessary for the future development of our industry. In case of any question please do not hesitate now and in future! 18
Niels Gronau Mail: ngronau@deloitte.de Tel: +49 (0)173 8780 191