FUTURE OF GROUP FITNESS May 2012

LES MILLS INTERNATIONAL © 2011

MEMBERSHIP UNLEASHED FUTURE OF FITNESS

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THE FUTURE OF FITNESS CHALLENGES § LES MILLS white paper highlights

big challenges we face if we are to survive 1.  Aging obese markets 2.  Fitness Seekers want other options 3.  Play drives activity 4.  Activity must offer something more

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Health & Fitness facility attendance has become the biggest adult “sport” in the Western world. Bigger than football, tennis and golf combined �


FUTURE CHALLENGES AND OPPORTUNITIES 1.  The number of people who fit our

current offerings is reducing reflected in a population that is aging and suffering from obesity

2.  Fitness seekers want better quality products, more control and mobility, and ultimately more choice in how they exercise

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3.  “Play drives activity” with growth in two distinct areas: §  Blends of game, sport and dance will offer fitness

and activity that are driven by fun, pleasure and sociability

§  ‘Exergaming’ consumers will seek fitness and activity as a game driven by enjoyment.

§  Technology will evolve this segment into ‘exertainment’ with rich sensory experiences, and eventually virtual realities that involve movement, social networks, escapism and new experiences.

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FUTURE CHALLENGES AND OPPORTUNITIES


FUTURE CHALLENGES AND OPPORTUNITIES 4.  Activity offers ‘more’…

§  ‘Relationships and community’, in which people seek communication, connection, and shared experiences

§  ‘The search for meaning’, in which people place emotional, social and spiritual integrity at the core of their beings

§  Low-tech solutions like returning to nature, opting out or disconnecting

§  New techniques like proactive medication

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MEMBERSHIP UNLEASHED HOW LES MILLS PARTNERS GO FROM GOOD TO GREAT


1. THEY IMPLEMENT THE LES MILLS GX SYSTEM


2. THEY USE THE RIGHT PROGRAM SOLUTIONS

LES MILLS INTERNATIONAL© 2011

AND SIMPLE BRANDED MEMBER ONBOARDING MODELS

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Group Fitness Training Small Group Training Personal Training Event Training


3. THEY COMMIT TO REGULAR WORLD CLASS INITIAL AND ADVANCED INSTRUCTOR TRAINING


4. THEY USE THE NEW CLUB PERFORMANCE TOOLS


5. THEY IMPLEMENT A ROBUST GX REPORTING SYSTEM


§ Point of sales training that leverages group fitness as a key membership sales tool

§ Les Mills has formulas for hosting launch and relaunch events, on 3 different budgets, that are proven to: – enhance member retention and

acquisition – deliver significant ROI – transform group exercise into a profit

centre

6. THEY HOST BROADWAY CLASS GX EVENTS


§ Using the best professional functional and aesthetic design you can afford

§ Pay special attention to –  Lighting –  Capacity Space –  Flooring –  Staging – Wall décor and mural –  Sound & Microphones –  Exits/ Entry points –  Equipment Storage – Window/Mirror Clings

7. THEY BUILD BROADWAY CLASS ENVIRONMENTS


ENVIRONMENT EFFECTS ATTENDANCE

Neilsen Research ( 2008)

THE AMBIENCE OF THE STUDIO. 70% MEMBERS RATE AS A KEY ATENDANCE DRIVER.


ENVIRONMENT. CREATE MORE A COMPELLING AMBIENCE.


Inexpensive effects – photo blow-ups

ASPIRATIONAL WALL MURALS. USE SIMPLE INEXPENSIVE PHOTO BLOWUPS.

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LES MILLS INTERNATIONAL © 2011 20



§  Les Mills World of Fitness, Auckland*, New Zealand §  12,000 members – current membership NZ$110 per month §  5,000m2 / 53,500 ft2 Fitness Only Club §  2,000m2 / 21,500 ft2 Group Fitness Area §  4 studios – largest is 700m2 / 7,500 ft2 §  Over 150 classes per week §  50%+ of total attendances §  65 part time Instructors §  9,000 + Group Fitness visits per week §  M’ship retention rate 80% (IHRSA formula) *City of 1.5M people with 175 health clubs





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7. THEY LEVERAGE THE NEW US CONSUMER LES MILLS PUMP INITIATIVE §  Beach Body LES MILLS

PUMPTM Home DVD §  Biggest marketing initiative

since the global launch of BODYPUMPTM in 1997

§  Multi Million $$ Infommercial §  Massive consumer drive of

new members to sites with LES MILLS Programs

§  US launch May 2012


CLUB PERFORMANCE METRICS LES MILLS GLOBAL STUDY 2011-2012

MEMBERSHIP UNLEASHED


§  THE AVERAGE LES MILLS LICENSEE FACILITY HAS 500 MORE MEMBERS PER CLUB THAN THE GLOBAL AVERAGE

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(1) Scoreboard Round 1 and 2 (2) Scoreboard Round 2

GX POWERED BY LES MILLS FROM GOOD TO GREAT


§ THE MAJORITY OF LES MILLS™ PARTICIPANTS WANT TO CONTINUE TO TAKE LES MILLS™ IN NEXT 12 MONTHS

AC Nielsen (2010); IHRSA Consumer Report USA (2011



§ LES MILLS GX MEMBERS ATTEND THEIR FACILITIES ALMOST TWICE AS OFTEN

AC Nielsen (2010); IHRSA Consumer Report USA (2011



§ THE MAJORITY OF LES MILLS™ PARTICIPANTS WOULD ABSOLUTELY OR STRONGLY RECOMMEND LES MILLS™ PROGRAMS TO THEIR FRIENDS AND FAMILY AC Nielsen (2010); IHRSA Consumer Report USA (2011)




§ LES MILLS LICENSEES TEND TO HAVE HIGHER % OF CLUB ATTENDANCE PARTICIPATING IN GROUP EXERCISE (1) Scoreboard Round 1 and 2 (2) Scoreboard Round 2

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§ LES MILLS CLASSES ATTRACT HIGHER TOTAL CLASS ATTENDANCE THAN OTHER CLASSES, ON AVERAGE (3) Scoreboard Round 1 and 2 (4) Scoreboard Round 1

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§ THE AVERAGE LES MILLS LICENSEE ATTRACTS AROUND 600 WEEKLY GROUP EXERCISE ATTENDANCES THROUGH THE YEAR(3)

(3) Scoreboard Round 1 and 2 (4) Scoreboard Round 1

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FUTURE OF GROUP FITNESS May 2012