Well, thank you, Caroline and good afternoon and welcome to our conference call during which we will discuss our results over the first half of 2023. With me today are René Moos, our CEO; and Hans van der Aar, our CFO.

This call is being broadcast live on our website and a recording of the call will be available shortly afterwards. As usual, I would like to point out that Safe Harbor applies.

We will start with René, who will discuss the highlights and the operational developments, followed by a more detailed look at the financial results from Hans. After these prepared remarks, we will open the call for questions.

The call will finish no later than 3 o’clock. And with that, René, I would like to hand over to you.

Thank you, Richard. Welcome, everyone and thank you for joining today’s call.

I am pleased that we achieved a strong set of first half year results in a challenging global macroeconomic and geopolitical environment. During the first 6 months of this year, we continued our accelerated club opening program with a net addition of 103 clubs.

We also witnessed further strong membership growth and our enlarged group of 888 mature clubs, is now at a targeted level of 3,300 memberships on average per club. The combination of the strong membership growth that we achieved over the past 12 months and the benefits from the membership structure changes and pricing initiatives during the same period led to a record of 41% higher first half year revenue of €500 million with 83% higher underlying EBITDA of €110 million.

All in all, a good set of results. Let’s go to the next slide on club openings.

In the first half year, we grew our club network by 103 clubs to a total of 1,303. This means that we further extended our market leadership in Europe as a whole and in the 5 countries where we already had the leading position.

In total, we opened 108 clubs and we closed 5 clubs. Most club openings were in France, where we now operate well over 700 clubs.

If you look at it on a 12-month basis, we added 110 clubs to our network in France, a growth of 18%. After becoming market leader in Spain in 2022, we continued our accelerating club rollout with the addition of 22 clubs to reach 112 clubs by the end of the first half year.

Compared to a year ago, we grew our network in Spain by 45 clubs, which is an increase of 67%. We continue to open clubs in new cities like Cordoba and Granada, create new clusters like in Balboa and Malaga with 4 clubs each and strengthen existing clusters like in Valencia region, where we now operate 10 clubs.

In the Netherlands and Belgium, we grew our network by 4 and 3 clubs, respectively, in the first half of the year. In our new market, Germany, we opened 3 clubs in the first half year to reach 6 clubs.

In July, we owned another 2 more, lifting the total in Germany to 8 clubs. We continue to see huge growth potential in Germany and currently have a pipeline with signed contracts of 65 clubs that we plan to open in the next 18 months.

Let’s move on to the next slide on membership growth. Our membership base grew by 8% or more than 250,000 members in the first 6 months of 2023.

Compared to a year ago, we grew our member base by almost 700,000 or 23%. At the end of June, we had more than 3.6 million memberships.

The seasonal pattern of membership development returned to normal after 2 years of COVID-19 and a recovery year. As usual, we had a strong first quarter as a result of the good intentions and a slower second quarter.

The membership development in France was, however, somewhat impacted by long periods with protest strikes and civil unrest. As expected, we saw churn rates normalizing the past quarters to pre covered level of around 4% per month for the low rate after lifting of COVID measures in 2022.

We expected the churn rate to stay around 4% per month going forward. As we told you before, during 2022, we intensified our efforts to promote our premium membership.

Ongoing efforts this first half year have more recently led to a further increase in the take-up rate of premium membership to more than 55%. By the end of the first half year, our 888 mature clocks had an average of 3,301 memberships.

Together with a further gradual increase in average revenue per member per month, this looks promising for our group profitability in the second half of the year. In a few minutes, Hans will give some further details on mature clubs performance.

Let’s go to the next slide on our premium membership growth. Last year, we told you that we were intensifying our efforts to increase the higher-priced premium membership uptake, as we believe it is an effective tool to help increase the average revenue per membership per month.

This, of course, to help mitigate rising club operating costs due to inflation and high energy costs in 2023. From last year second quarter onwards, we have intensified our efforts to promote our premium membership.

And since the second half of 2022, this has resulted in an under uninterrupted premium membership uptake of over 50%. In the first half of 2023, we reintroduced the Comfort membership at the price of €24.99 per 4 weeks in all countries except for Spain, and stopped offering the lower-priced basic membership.

The new Comfort membership gives access to all clubs in a country, while the basic membership gave only single club access. After the reintroduction of the Comfort membership, we witnessed a further increase in the premium uptake rate to more than 55%.

If the trend continues, I believe that by year-end, we will have a premium penetration rate of more than 45%. More premium memberships and our new pricing structure are expected to result in an average revenue per member per month of at least €23.50 for the full year.

This compares to €23.13 realized in the first 6 months of the year. That brings me to my last slide about our club rollout plans.

This slide should look to you familiar. As you can see, we continue to have a full club opening pipeline.

Year-to-date, we have already added a net of 107 clubs to our network. The next period with large number of openings is in the second half of August and the beginning of September when we expect that we will open around 70 clubs.

For the full year, we will grow our network by at least 200 clubs compared to 2022. I’m excited about Germany, where we are now at 8 clubs but where we have a pipeline of 65 clubs that we plan to open in the next 18 months.

This concludes my part of the presentation. I now hand it over to Hans for the financial review.

Thank you, René. Total revenue increased by 41% to €500 million, which is in line with our expectations and also explains why we are comfortable to expect full year revenue of more than €1 billion.

Growth in revenue was achieved, thanks to the combination of a higher average number of memberships in the period and a higher average revenue per member per month of €23.13 compared to €22.22 in the same period last year. Of the three cost buckets that we distinguish within club operating costs, other club operating costs experienced the highest increase with 50%, besides rising costs due to a growing club network, other club operating costs were as expected, impacted by a strong increase in energy costs.

On average, energy cost backlog was double the amount of a year ago. In December 2022, we announced that considering the energy price developments during the year and the outlook for this year we had signed a fixed unit price contract for 100% of our electricity consumption in France for this year.

Combined with energy contracts already in place in other countries, this means that about 75% of our expected dry consumption this year has a fixed but considerably higher price. For 2023 as a whole, we give guidance for an average energy build backlog of around €55,000 compared to around €25,000 historically.

I’m glad to say that recently, we were able to sign more favorable energy contracts for France for next year and for 2025. I – based on these much lower prices and taking into account the fixed prices for part of our consumption in other countries, we expect the average energy bill by club will drop from €55,000 per club this year to around €35,000 backlog in 2024 and 2025.

In total, we have fixed prices for around 70% of our consumption for these 2 years. Club personnel costs rose by 31%.

Besides again, higher cost due to our growing network, costs were also up due to the raises as from the January 1 in all our markets, except for Belgium. The raises were largely based on the prevailing inflation rates in our countries and somewhat extra elevated by the so-called Macron bonus to be paid to our personnel in France in June.

We were able to mitigate the impact of higher salaries somewhat by increasing the amount of store hours in the majority of our Benelux clubs. Overall, average club rates are expected to increase in the high single digits in 2023.

Club rent costs rose 90%, and as a result of our growing club network, but also due to rent indexations. We continue to have a broad mix of contracts.

In the Benelux, we have a lot of contracts with Cap. While in France, this is not possible.

Luckily, the French government influences the outcome of the indexation to the benefit of the tenant. Overall, average club rents are expected to increase in the mid-single digits in 2023.

Overhead expenses increased by 19% to €70 million. The increase reflects our growing organization, including our expansion into Germany and higher rent and personnel costs due to inflation.

Marketing expenses were around 6% of revenue. As you would expect from us, we continue to invest in our IT capabilities in remote facility systems and in our very successful Basic-Fit member-app, which is already used in two-thirds of all club visits.

Compared to a year ago, we employ more people in areas such as legal, IT and sustainability. A new development has been the creation of an energy department.

Our underlying EBITDA, which is EBITDA adjusted for exceptional items and minus invoice rent costs, increased by 83% to €110 million. As a percentage of revenue, our underlying EBITDA increased with 5 percentage points to 22%.

Finance costs were up as a result of higher average level of bank debt at higher rates than in the previous year and a €4.1 million non-cash negative swing in interest rate swaps. I would also like to point out that our finance costs include a €4.5 million non-cash interest accrual related to the convertible bond.

Bottom line under IFRS accounting, we recorded a small loss of €6 million. On an underlying basis, we went from a loss of €21 million last year to a profit of €2.4 million this year.

And lastly, I’m happy to mention that on an IFRS basis, we recorded a profit in the second quarter of 2023. Let’s go to the next slide on mature club development.

As you all know, we consider our club mature if it’s at least 24 months old at the start of the year. Because of the pandemic, we reported in 2022 only on the approximately 500 clubs that were mature before the start of the dynamic in March 2020.

Because of our strong recovery since the lifting of all COVID restrictions during 2022, we returned to the original mature club reporting as from the first half of this year. That means that we will report on 888 mature clubs.

These 888 mature clubs ended the first half with an average of 3,301 memberships. This is a strong achievement if you compare it with a smaller group of around 500 clubs that reported an average of 3,138 memberships at the end of June in 2022.

At the end of this first half, our 880 clubs represent 68% of our total club base. In the first half of revenue, first half of 2023, the revenue of our mature clubs accounted for roughly 80% of group revenue.

And let’s go to the next slide on cash flow and capital expenditure. Our cash generation capabilities are almost back at the pre covered level.

In the first half year, we recorded an operating cash conversion of 79%, which is fairly close to the 83% that we achieved in the first half of 2019 and well above the 46% of the first half of last year. The amount of CapEx that we spent on the new club was €1.21 million.

This amount is in line with our expectations. For the full year, we continue to expect average CapEx of new clubs to be around €1.2 million.

Please keep in mind that regardless of the initial CapEx for a club, we only signed a lease contract for a new club when we expect to achieve a ROIC of at least 30%. Average maintenance CapEx backlog amounted to €90,000 a compared to €30,000 last year.

The somewhat lower spend this first half year as a result of a different phasing compared to last year. For the medium term, we expect maintenance CapEx to remain around €55,000 per club per year.

Other CapEx amounted to €6.9 million and is mainly related to ongoing investments in software and innovations. One such development is, of course, our successful Basic-Fit member app, which is already used in two-thirds of our club visits.

Let’s go to the next slide about our balance sheet. Working capital was minus €168 million at the end of the first half.

As a percentage of the rolling 12-month revenue, working capital was 18%, which is comparable to the percentages we recorded in 2019 before the cover period. Net debt, including the convertible bond, was €767 million at the end of the first half compared to €694 million at the end of 2022.

The increase reflects our club openings program, which we are not yet able to finance entirely from our strong cash generation in the first half of the year. Our net debt to adjusted EBITDA ratio came in at 257x.

For the full year, I expect a ratio of less than 2.5x. I’m happy to mention that a relic from the COVID period, the government-backed facility has been fully repaid.

Demand concerned was €13.3 million. In the remainder of 2023, no further debt – other debt repayments will be made.

In June 2023, we announced that we successfully completed an amend and extend of our existing term and revolving facilities agreement. The new agreement consists of €250 million term loan and €400 million revolving facility, totaling €650 million, which is an increase of €50 million compared to the situation before.

In addition, the agreement includes a new uncommitted revolving facility accordion of up to €150 million. The maturities of the facilities have been extended to June 27.

With the option to request further extension by 1 year in each of the coming 2 years to ultimately 2029. At the end of June, available liquidity amounted to €138 million which allows us to continue our club growth program.

And now for the final slide of our presentation, the full year outlook. For the full year, we expect to grow our club network by at least 200 clubs to 1,400, and we reiterate our expectation of revenue of at least €1 billion.

We also foresee a substantially higher underlying EBITDA for the second half of 2023 as compared to the first half of 2023. This is the result of the increasing revenue per club whilst the cost base remains relatively stable.

Drivers of revenue and EBITDA growth will be further membership growth to at least €3.8 million per year-end in combination with a further gradual increase in the average revenue per member per month to at least €23.5 over the full year. Lastly, our 888 mature clubs are expected to achieve a ROIC of well over 30% this year.

This concludes the presentation. Operator, please open the lines for questions.

Yes. Good morning, gentlemen.

Actually, good afternoon, gentlemen. It’s a very long day for me.

Looking at your guidance for H2 for the EBITDA you’re seeing a strong increase, a substantial increase. What are the key drivers?

Is that purely coming from the top line? Or do you also see, let’s say, some let’s say, potential to have somewhat lower cost.

You already indicated that for the energy cost, that’s not the case, but maybe from some other costs. Could you give maybe some feeling on that?

Then on the cash flow, yes, for this year, 200 club openings. And I understand also for next year, you, let’s say, a more, let’s say, 200 so when do you expect to become cash flow positive?

Could you already see that for next year? Or what could, let’s say, determine that picture?

And lastly, on your full year yield guidance of at least €23.5 that looks quite conservative. Could you give maybe some building blocks on the different items there?

So premium membership and the impact from recent price increases, how do you come to the €23.5?

Yes. Good afternoon, Hand.

Good questions again from you. If you look at the guidance for the first half year, you have to understand that if you look at the first half year, the impact of the inflation of the increase of the cost was immediately there.

So in January, we had a higher cost of salaries, high cost of energy and also the higher end. And we increased the prices to mitigate those effects for new members.

So it’s an in growing gradual in growth of new members, a growing amount of new members who paid a higher price. So it’s clear that all the costs will be more stable.

So we don’t expect more cost increases in the second half year. But to the members, new members, a growing amount of members and also a growing amount of members to pay higher yield.

We will make sure that we will have a higher EBITDA in the second half year than we’ve seen in the first half year. And going back to your second question, cash flow positive, well, it’s a repeating question.

We expect to be cash flow positive in 2024 and also already in the last quarter of 2023. Of course, that’s always based on the amount of openings, if we stick to the 200 openings for 2024 and also 2023, we expect to be cash flow positive in Q4 ‘23 and also over ‘24.

I assume – sorry, maybe on that, I assume that for Q4, that purely to do with the fact that you have, let’s say, your opening squeeze more into Q3?

Yes.

Yes, okay, thanks. And then on the yield.

Yes. The yield is a combination of the existing prices and in growth of new members for the new prices and the development of the premium membership.

So it’s – of course, it’s – we can’t calculate it very on a detailed basis. But if you look at what we see now in the ingrowth of new members and also the ingrowth of premium.

We’re very confident that we can get the yield to at least €23.50 at the end of the year.

But is it logical to assume that of the increase, let’s say, is slightly more than the majority has to come from the price increases and the rest from the premium membership shift?

Yes, it will be – both the yield increase will be caused by higher premium as we see now. So the premium we gave guidance at the premium uptake would be 50%.

Now it’s more 55% and also the shift from existing members to new members.

Okay, thanks.

Yes. Good afternoon.

Thank you, gentlemen for the explanation already. I’ve got two questions from my side.

Firstly, membership growth. We’ve seen a slowdown Q1 versus Q2, so quite flattish in Q2.

Just wondering what you see there in terms of trends. Is there a something that we can still expect in Q3?

Or what’s the reason for this change versus Q1? And secondly, my question is actually on the liquidity position, slightly short of €140 million.

And to what extent is this a picture that is a bit like you shorten your balance sheet probably at reporting date. So does it give you a lot of margin enough to do everything that you want to do?

Or could you shed some more light on that on shrinking the balance sheet on reporting date. Thank you.

Well, I would take the first question. I think the membership growth in the second quarter was in line with what we expected.

So we had a lot of joiners in Q1 2022. And in Q1 2022, we also gave 1, 2 or 3 months for free at the start of that season.

So what you see typically is that around 40 months later, you have a lot of levers because the 12-month contract finished and then, let’s say, more than two-thirds of the people who joined stop and one-third really like to work out, stay for 2, 3, 4 or 5 years. So in that way, we have an average length of stay of 23 months.

So we had a lot of levers because we had a lot of joiners in Q1 2022. That’s one part.

And the second part is the situation in France, which was not very helpful.

Okay, thank you. Second question…

Okay. Yes.

On liquidity, we reported that we have available liquidity of €138 million. Of course, we manage our balance sheet, but not in that way that we have more liquidity at reporting dates.

And I think the €138 million, also with the uncommitted credit line, we still have available the €150 million accordion. We have ample liquidity to fund our growth expectations.

And as I said, as from ‘24, we expect to be cash flow positive and then we will be able to fund our growth with our cash that we operate. And if you look at the slide that we presented, you already see that we have a cash operating for outcome from 79%.

That’s almost 83% that we had pre-COVID. So we can really look at the cash conversion that we have and use that cash conversion to grow.

So we don’t see any risk there in liquidity. €138 million liquidity is more than enough to fund our growth program for the coming year.

Okay, thank you.

Yes. Good afternoon, Hans, René and a nice – Richard, of course.

A couple of questions. Maybe just start with Hans, on the – on your net debt to start with.

You ended up a bit higher, say, €30 million higher than last year at the end of ‘22. You expect to be cash flow positive in Q4.

And obviously, you will have a significantly higher EBITDA in the second half. Given the take the number of openings is similar to Q1, should we then expect that your debt will move down quite significantly maybe towards the level that we’ve seen at the end of 2022.

Is that correct conclusion?

Yes, that’s a great conclusion. If we will be cash flow positive.

Of course, it depends on the timing of the opening. As you know, Marc, Sometimes, we can’t influence the date that we opened the club because we are depending on trench, especially in France, that’s an issue on French government to do the inspection.

But if everything goes like we plan, then we will have less openings in Q4 and then our net debt should go down because then we’re cash flow positive, so our net debt should be – should go down.

Yes. Clear.

And then maybe again on liquidity, as Kris also asked about it. Just so I understand it correctly, currently, you’re at €138 million at least at the end of June.

– that’s only slightly lower than at the end of last year. But to my understanding, did you include some new liquidity facilities in there or – and to be – the €50 million of extended credit lines in there.

Now is there still a part that’s not included in your liquidity numbers because they are not yet, how do you call it conditional, let’s put it that way.

The €50 million extra credit line that we got in last month is included in that €138 million of available liquidity. From – the €150 million is the accordion is uncommitted, and that’s a standby facility.

But that’s uncommitted. So we only include a committed facility, and that’s extra €50million that we got extra it’s timing right.

June 30, when we pay the clubs that are open, more clubs open and we pay more. So then it’s all based on the club opening program that we see in the first month.

Yes. But if needed, you can draw the €150 million as well.

That’s why you are [indiscernible]

Yes. To be clear, it’s there, but it’s uncommitted.

So we have to get approval from the banks, but they are very cooperative. So we don’t see any problem there.

Yes. Yes.

And given that you have quite some liquidity available plus you extended it, which also consider them to open more gyms next year than the 200 you currently foresee.

Yes. someone sitting next to me, nodding very, but...

Yes, Marc.

We still have a difficult situation in Europe. As you know, the geopolitical situation is not that clear yet.

If everything normalizes, again, then we can look at our opening program again. But for this year and also for coming years, we are looking now at the 200 club openings.

But if everything normalizes and everything goes economic situation normalizes and also the geopolitical situation normalizes. We can look at that.

Okay. Maybe addition to that.

Is it also for M&A possible? What is the market situation there?

Because I understood previously the roll off – crazy prices, is the situation in Spain, any different now or is the situation in Germany because also in the office markets, of course, did anything change there that we might see M&A returning?

No. I think when you’re talking about M&A, those that will not directly happen in, let’s say, the Benelux.

But if you look at the M&A possibilities in, for example, Spain or Germany, that would make sense. We are focusing still on opening new clubs since that is the more easy and positive way to go.

But if something comes to market and it is interesting, we will definitely focus on it and we will take the opportunity if it’s there.

Okay. And then on the energy cost, did I hear correctly that currently 70% of your energy costs are fixed, is I hear that correctly?

Or is it 100% now given...

70%, we still have– in France, it’s 100% fixed we are doing on the biggest market. But for Benelux and also in Spain, we partly – it’s partly fixed.

So, in total – for the total group, it’s 70% fixed.

For ‘24 and ‘25, for 2 years.

And yes, given that 30% is still floating. Are you not afraid that you specific guidance – specific guidance long-term out?

Isn’t there a risk that you might miss it or.

As I have said, we have a new energy department in place, and we are constantly monitoring the prices, and we – so we are constantly monitoring that. And if we think it’s a big risk, in my opinion, we should fix them 100%.

That’s my preference, but we definitely look at all the prices and development of the prices. At this moment, we still have low prices in – and what the market says is, it’s still expected to be low prices for the coming months.

But we definitely…

Could be that you fix them also in the second half, somewhere…?

Yes. Correct.

Okay. And then one on the membership development.

Obviously, Q2 was a bit lower than maybe expected for the reasons you mentioned? And also for the second half of the year, you are quite cautious, I know it’s an at least.

But why are you so cautious in that 3.8 million, because it basically suggests less than what the market was expecting, and we normally expect what was it from pre-covid in growth trends. What is causing your caution there?

Is it because the churn is a bit volatile or just not sure about the timing of the – because we are quite specific that it is second half August, September, so it sounds growth…

Yes. I think it is more or less in line with what we expected beginning of this year.

The big difference is France, where it was a bit rough period where, yes, there was a lot of instability there for a while. Of course, if everything turns to normal there, that would be helpful for us since we have more than 50% of our clubs in France.

But I think with the 3.8 million and the mature clubs on the 3,300, we are pretty much in line that what we expected when we started the year. So for us, it was not a big surprise that it was lower.

The thing is with the premium, there are also a lot of people buying – we used to maybe have two memberships in one family, taking now the premium membership. So, that is also with that percentage going up, you also see some people living on the same address going back to the premium membership.

So, it’s a combination of things.

Is it driven by the price increase of the component that the differences are smaller, people say, well, I will just take the premium and…

Yes. Not really for the existing members because we didn’t change their price yet.

So, they are still trailing 1999. So – but I would say with the 3.8 million members and the 1,400 clubs, I think it is a good number for a mature and immature clubs.

Alright. Well, those are my questions.

Maybe I have a few follow-ups. But thanks so far.

Thank you, Marc. Have a nice holiday.

Still we get other week.

Good afternoon. My first question was on Germany.

You have obviously got a reasonable pipeline now to open over the next 18 months, and you said you see trends in that market. I wonder if you could just give us a bit of color on what exactly you have seen and perhaps you could talk about what you found in the differences in the German market versus your other markets that gives you that conviction that it’s looking positive for you?

Yes. Well, so we – the first six months, we had six clubs open.

And yes, we opened two clubs then in the last two weeks. So, we have now eight clubs in Germany open.

If you look at the German market, it is a very good market for us. That’s more than 80 million people living there.

There is another really big market leader in Germany. The biggest chain is a franchise chain but charging more than what we are charging.

And the other one is, of course, McFIT, but they have like 180 clubs, which is on more than 80 million people, not really a lot. Of course, the main driver for being successful in any country is having a lot of clubs there because the main driver is having a club close to where you live or where you work.

So, we think with the fitness penetration at this moment of 12%, 13% in Germany, which is a really strong economy, that percentage could easily go up to the 17%, 18% what we see in the Netherlands. So, if you calculate that on 80 million inhabitants, then you have a huge upside and potential to open clubs.

I personally have been in Germany already with the Health City brand for 15 years. The members there are more sticky, so the length of stay is much longer than in other European countries.

That is very important. If you look at our competitors, they are growing extremely slow.

If you look to their growth in the last 5 years, where we will do more in 1 year. And we have had a lot of questions about Germany, why it’s going to slow.

But if you compare it to the questions we had about Spain, we had the same questions. We also, when we started in Spain, we also had questions constantly why are you going so slow.

And if we go back to when we got listed, also in France, it took 3 years before we had 20 clubs. So, we also had then the question constantly, why are you going so slow and it is really a good market.

It is a good market. We have seen that it is a good market and we are convinced that Germany is at least as good as France is.

So, we are very optimistic. We see a great opportunity for us in Germany.

Main reason, good economy, people used to direct debit, sticky members, not very aggressive competitors, grown really slow, so a lot of possibilities for us. We think we can really drive the fittest penetration up in Germany.

Very useful. Thank you.

My second one was on founder memberships. You are using them more or perhaps you are using them more openly.

Can you just talk about the rationale for why you are using them in that way and what you are sort of seeing from them?

Yes. Well, we are constantly trying new things to get in growth quicker.

The thing is if you start – if you open a new club, and you start with only, let’s say, 100 members, the members who joined think, well, I maybe joined the wrong location because I am one of the few ones who entered here. It’s like a restaurant like if you go into a restaurant where a lot of people is, you typically think, okay, that must be the good restaurant to join.

So, we prefer to start with more customers. So, we are really pushing and trying hard to get more members in the first month when we open.

So, what we typically do is, in the past, give two months or three months if you sign up preopening, but we stepped more or less away from that. In the last six months, you didn’t see any of our advertising anymore with two months of free or something like that.

We now give discount let’s say, it’s €9.99 from the start, something like that. So, we continue to keep trying new things.

So, this founding membership is something we have done already, by the way, 10 years ago, so it’s not completely new. But we are pushing it hard now on quite some clubs.

It is working. It is not a use of great success, but it’s definitely better for us than what we see in giving two months or three months away.

So, we will for now continue with this founding membership and trying to optimize it, make it better, get it better and get the starting member base up in the first month.

Thank you. My third question was on churn.

You said that churn is now back to 4% pre-COVID level. Do you expect it to stay there?

You have got some various moving parts, you have obviously put through a price rise. You have referenced the macroeconomic situation.

You said there is volatility in France. So, I guess what gives you the conviction or can you help us get conviction that, that churn couldn’t perhaps get worse over the coming months?

Are you seeing any signs that it’s starting to abate, or what is it that you are looking for? What is it gives you confidence it will stay at that level?

Well, just by looking at what happened in the last 8 years and what is happening currently, of course, the old member base are paying a lot less. So, for them, it is not – it’s interesting to stay on their old paying system.

So, we do see that the member base – so, what I said before is that if you have a lot of joiners, let’s say, in February 2022, you will have also a lot of levers 14 months later because two-third of the people who joined stop after first 12 months. But that other group is really staying and staying for 3 years, 4 years, 5 years, 6 years, 7 years.

So, that’s why also the main reason why our mature clubs are more successful than new clubs is that the new clubs every time has those two-third leaving. Well, the mature clubs, they are already for 10 years or 15 years, have a big group of old members and people are typically joining, stopping after 2 years, 3 years or 4 years and then waiting for 2 years, 3 years and then joining again.

So, if you have an old member base that is really helpful because they keep coming back because they know the club, they know where the door is. They know the equipment.

They know some people there. So, all the clubs are always more successful than newer clubs, because newer clubs have a bigger group of turning.

So, yes, we are comfortable that it will be around 4%. It could be 3.5%.

It could be 4.5% some months, but around 4.5% because that – what we have been seeing for years before COVID and we see it now again, even though we have had huge growth in members in the last 18 months.

Actually, we were very happy with the churn just being 4% in the second quarter. As René mentioned, we had a lot of joins in the first quarter and second quarter of last year.

Typically then you see most levers after 12 months. And if you look at the churn numbers that we had in the second quarter, they were actually very good.

And what was helpful that existing members kept on paying the old prices and new members, only the price increases were done for new members. So, canceling your membership doesn’t make sense if you pay a lower membership fee.

So, the new prices doesn’t have any impact on the churn, and it has a positive impact on controlling the churn. So, we are very comfortable with the 4% churn.

Okay. Thank you.

I have got two more quick ones, if that’s possible. So, one, just on the RCF and the sort of refi.

When you refinanced you sort of extended and amended, but you essentially kept the debt structure very similar to previously with the sort of drawn RCF. Is there any reason why you kept it in that way rather than wrapping that into a term loan and moving back to an undrawn RCF or moving the components around, is there anything you are sickling by having drawn RCF, is it because you expect to pay it down as you become self-funding, or is it because you expect to raise debt elsewhere?

Is there any more reason to it, or is it just that it was similar to what you had said it was easier to do?

Yes, it was easy to do. So, it was similar to what we had and doing extended, it’s obviously more easy if you continue with the same structure.

And of course, it’s also important that we are flexible. So, if you have a revolving facility and if we are cash flow positive, then we don’t have to pay the interest on those, the amount that we have.

So, it’s the flexibility that gives us enough reason to stay with the same structure as we had before. So, we are very happy with the revolving facility.

We are also very happy with our corporation of all our banks and the support they gave us. So, yes, we are very happy that we could amend and extend an existing facility.

We didn’t see any reason to change that.

Understood. And a final one if I may.

You got a Capital Markets Day later this year, why you are holding, or what are you hoping to be able to talk about in more detail?

Yes. So, we have typical things.

We have a few things that we have been working on that we want to explain to analysts and investors. So, there will be a few new topics that we have been focusing on for a while that we want to explain.

And just to – because we have a certain important growth period. So, September, October and January, February, of course are the growth periods, but we want to also explain because before COVID started, we said we would do between 200 clubs and 300 clubs a year.

Now, we are more focusing to the 200 because we think being – having enough cash in this period is important. But yes, we want to explain our – how we look at the situation end of this year and explain also all the new things we have been working on.

Great. Thank you.

Hello. Hi.

Hope you can hear me. Thank you for taking the questions.

Very quick question from my side. Just looking at consensus on underlying EBITDA, with an average right now at €302 million for the full year, do you just still feel comfortable with this consensus, or do you have any comment on this?

Thank you.

Yes. The comment is that we have – that we don’t want to give guidance on EBITDA.

So, what we said, we want to give guidance on the revenue and the amount of the clubs that we want to open and that our mature clubs will continue to perform above the 30% ROIC that we said. So, that’s the only guidance that we want to give.

So, based on those numbers, the analysts can do their work and come with their estimation of the EBITDA, but we don’t want to give any guidance on that.

That’s very fair. Thank you.

Have a great day.

Thank you very much Dov.

Thank you, Caroline and thank you everyone for joining us today with our conference call. If there are any follow-up questions, please don’t hesitate to give John David or me a call, and we are happy to continue the discussion.

So with that, this ends the call. And I would like to wish you a very happy day.

Thank you very much.

Thank you very much.