Investor Presentation COVID-19 update Results for the year ended 31 - - PowerPoint PPT Presentation

In Investor Presentation 29 April 2020 1

Investor Presentation

COVID-19 update Results for the year ended 31 December 2019 Acquisition of Fitness World on 14 January 2020

29 April 2020

In Investor Presentation 29 April 2020 2

Fo Forw rward rd-lo looking st statements This presentation may include forward-looking statements. All statements other than statements of historical facts included in this presentation, including those regarding the Group's financial position, business and acquisition strategy, plans and objectives of management for future operations are forward-looking

• statements. Such forward-looking statements involve known and unknown risks, uncertainties and other factors which may cause the actual results, performance
• r achievements of the Group, or industry results, to be materially different from any future results, performance or achievements expressed or implied by such

forward-looking statements. Such forward-looking statements are based on numerous assumptions regarding the Group's present and future business strategies and the environment in which the Group will operate in the future. Many factors could cause the Group's actual results, performance or achievements to differ materially from those in the forward-looking statements. Forward-looking statements should, therefore, be construed in light of such risk factors and undue reliance should not be placed on forward-looking statements. These forward-looking statements speak only as of the date of this presentation. The Group expressly disclaims any obligations or undertaking, except as required by applicable law and applicable regulations to release publicly any updates or revisions to any forward-looking statement contained herein to reflect any change in the Group's expectations with regard thereto or any changes in events, conditions or circumstances on which any such statement is based. Us Use of

• f non

non-IF IFRS fi financial inf infor

• rmat

ation ion Certain parts of this report contain non-IFRS measures and ratios. We believe that these measures are useful indicators of our ability to incur and service our indebtedness and can assist certain investors, security analysts and other interested parties in evaluating us. Because all companies do not calculate these measures on a consistent basis, our presentation of these measures may not be comparable to measures under the same or similar names used by other

• companies. Accordingly, undue reliance should not be placed on these measures in this presentation. In particular, Adjusted EBITDA and Run-Rate Adjusted EBITDA

are not measures of our financial performance or liquidity under IFRS and should not be considered as an alternative to (a) net income/(loss) for the period as a measure of our operating performance, (b) cash flows from operating, investing and financing activities as a measure of our ability to meet our cash needs or (c) any other measures of performance under IFRS.

Disclaimer

In Investor Presentation 29 April 2020 3

Contents

2

PureGym 2019 Results Highlights: For the year ended 31 December 2019 Fitness World Acquisition: Rationale & business overview (completed 14 January 2020)

3 4

Group Financial Position: Combined Group liquidity & pro-forma leverage position

5 6

Outlook: Looking to the future

1

Introduction & Overview COVID-19 Update: Further update following COVID-19 communication on 24 March 2020

7

Appendix: Further information on PureGym, Fitness World acquisition and the Combined Group

In Investor Presentation 29 April 2020 4

Introduction & overview

COVID-19 Update

• We are making really good progress on mitigating the burn rate, reaching our

target of c.£4.5m per week

2019 Full Year Results

• An excellent year and start to 2020: we headed into the pandemic from a

position of real strength

Fitness World Acquisition (14 January 2020)

• The strategic logic for this acquisition remains intact for the long-term

Group Finance Position

• £150m of available liquidity today with strong shareholder support

Immediate outlook

• Management are very focused on being ready for the reopening phase and

“reflating” the business

In Investor Presentation 29 April 2020 5

COVID-19 Update

Further update following COVID-19 communication on 24 March 2020

In Investor Presentation 29 April 2020 6

MARKET GOVERNMENT INSTRUCTION AND ACTION TAKEN KEY GOVERNMENT SUPPORT MEASURES UK

269 gyms 67% Group EBITDA

• All gyms closed by 21 March following Government instruction

− Closure and lockdown protocols in place − 1.1m member subscriptions in “free freeze” mode

• Earliest anticipated opening: early to mid June
• Job retention scheme (wage support)
• Business rates holiday for 12 months
• VAT and Tax payment deferrals
• Landlord actions restricted to promote “constructive

debate” regarding rent

DENMARK

186 gyms 28% Group EBITDA

• Following Government instructions, all gyms closed on 12 March

− 480k members in “free freeze” mode

• Government lockdown recently extended to 11 May
• Earliest anticipated opening: early June
• 75-95% compensation support for laid off workers up to

certain thresholds

• Fixed cost compensation support
• Loan guarantee support, awaiting further details

SWITZERLAND

39 gyms 5% Group EBITDA

• Gyms closed on 16 March following Government instruction

− Over 85% of Basefit’s 75k membership is on 12 or 24 month “pay in advance” membership, largely mitigating the impact

• Earliest anticipated opening: mid May
• 60-80% compensation support for laid off workers
• VAT and Tax payment deferrals
• Legal support for tenants not paying rent
• Government loan scheme up to £0.5m available

PO POLA LAND

17 gyms 0% Group EBITDA

• Gyms in Poland closed on 16 March

− 27k members in “free freeze” mode

• Earliest anticipated opening: mid May to early June
• 60% salary support, details currently being prepared
• Legal support for tenants not paying rent

No Note: Membership data and gym numbers as at 23 March 2020. Group EBITDA reflects the proforma combined Group Run-Rate Adjusted EBITDA of Pure Gym and Fitness World for the year ended 31 December 2019, including an adjustment made to those gyms which are less than three years old at the end of the reporting period to replace the Adjusted EBITDA earned by these sites in the last twelve-month period with the projected Adjusted EBITDA for their third year of operation, but excluding any potential synergies for the combined group.

COVID-19 status

Fitness World Acquisition: Rationale & Business Overview PureGym: 2019 Results Highlights COVID-19 Update Group Financial Position: Liquidity & Leverage Outlook: Looking to the Future Appendix

In Investor Presentation 29 April 2020 7

Weekly cash burn rate

Ba Base Case COV OVID-19 19 12-we week full Gr Group closure scenario:

• Unmitigated weekly cash burn rate of £9m
• Successfully reduced to c.£4.5m per week for 12 weeks (excluding

revenue initiatives), comprising: ‒ £1m interest ‒ c.£3.5m operational costs (with scope for further reduction in a prolonged lock down scenario) ‒ Operational costs “P&L burn rate” reduced by c.65%

• Equates to a further 33

33 weeks of available cash given £150m liquidity Ke Key assumptions:

• All new site capex paused
• Committed capex post 31 March only £15m (largely payment of prior

period invoices)

• Government support sustained for full period of closure
• ”Constructive resolution” being pursued with majority of landlords

Fitness World Acquisition: Rationale & Business Overview PureGym: 2019 Results Highlights COVID-19 Update Group Financial Position: Liquidity & Leverage Outlook: Looking to the Future Appendix

In Investor Presentation 29 April 2020 8

PureGym 2019 Results Highlights

For the year ended 31 December 2019

Pu PureGym Ambassa ssador: Dina Ash sher-Sm Smith

(Sunday Times Sportswoman of the Year for 2019)

In Investor Presentation 29 April 2020 9

PureGym 2019 Results Highlights

1, 1,135 135k

closing members

+12.1% vs 2018

£1 £18.90

ARPM per month

+2.4% vs 2018

Continued strong growth in members and revenue Strong Adjusted EBITDA Margin Exceeded £100m Run Rate Adjusted EBITDA Continued organic site rollout and investment in estate Strong cashflow conversion supporting deleveraging

34. 34.9%

Adjusted EBITDA Margin

• vs. 35.6% in 2018

£8 £89.1m

Adjusted EBITDA

up +9.6% vs 2018

£2 £22.9m

Q4 Adjusted EBITDA

up +19.2% vs Q4 2018

19 19

New organic gyms in Q4 2019

3. 3.6x

2019 pro forma total net leverage

down from 3.8x at Dec 2018

3. 3.7x

2019 pro forma interest cover

up from 3.9x at Dec 2018

87. 87.4%

Operating cashflow conversion

vs 101.8% in 2018

41 41

New PureGyms opened in 2019

vs 30 gyms in 2018

£1 £104.5m

Run Rate Adjusted EBITDA

up +10.1% vs 2018

+11.6%

FY revenue growth

vs 2018

21 21

Gym refurbishments in 2019

35. 35.0%

Q4 Q4 Adjusted EBITDA Margin

• vs. 33.2% Q4 2018

FY2018 financials reflect the result of Pinnacle Bidco plc, restated on a like-for-like basis for the 12 months to 31 December 2018.

Fitness World Acquisition: Rationale & Business Overview PureGym: 2019 Results Highlights COVID-19 Update Group Financial Position: Liquidity & Leverage Outlook: Looking to the Future Appendix

In Investor Presentation 29 April 2020 10 10

Notes: All years stated under IFRS; for 12 months ended 31 December. Financials are for PureGym standalone, excl. Fitness World. 1 Gyms includes PureGym branded sites at year-end. # of members excludes pre-opening members, includes members at PureGym branded gyms only. 2 Adj. EBITDA is before pre-opening costs and adjusted for non-cash expenses. 3 3 Calculated as Adj. EBITDA plus immature units (open for less than 36 months) EBITDA at maturity less actual contribution of immature units. 4 4 Op. FCF calculated as Adj. EBITDA less maintenance, refurb, and corporate capex and change in NWC, but before expansion capex. Operating cash flow conversion is calculated as operating cash flow divided by Adj. EBITDA.

84 84 132 132 170 170 19 192 222 222 26 263

2014A 2015A 2016A 2017A 2018A 2019A

PureGym 6 year track record

Gy Gyms (number)1

+2 +25.6% CAGR

412 412 62 622 818 818 92 927 1, 1,012 012 1, 1,135 135 2014A 2015A 2016A 2017A 2018A 2019A

Me Members (k)1

+22. +22.5% CAGR

Re Reve venue (£m)

+3 +30.0% CAGR

69 69 12 125 16 160 19 198 228 228 25 255

2014A 2015A 2016A 2017A 2018A 2019A

25 25 36 36 47 47 71 71 81 81 89 89

2014A 2015A 2016A 2017A 2018A 2019A

Ad Adjusted EBITDA A (£m)2

+28 +28.9% CAGR

36% 36% 36% 36% 35% 35% 30% 30% 36% 36% 28 28%

37 37 58 58 70 70 85 85 95 95 10 105

2014A 2015A 2016A 2017A 2018A 2019A

RR RR Adjusted EBITDA (£m)3

+22. +22.8% CAGR

112% 112% 103% 103% 78% 78% 94% 94% 102% 102% 87 87%

2014A 2015A 2016A 2017A 2018A 2019A

Op Op FCF conversion (%)4

Fitness World Acquisition: Rationale & Business Overview PureGym: 2019 Results Highlights COVID-19 Update Group Financial Position: Liquidity & Leverage Outlook: Looking to the Future Appendix

In Investor Presentation 29 April 2020 11 11

Core strengths of business apparent during Q1 2020

At At a macro and micro level we entered this crisis in “good health”

• In both January and February, all business units were significantly ahead of

budget

• A highly successful ”peak” trading period with members reaching 1.9m in

total across the Group

• Really strong resonance of our product offering and positive member

feedback

• Excellent pipeline of high quality new sites, primarily in the UK
• Diversified business with completion of Fitness World acquisition
• Core strengths of business: high quality, affordable fitness with no

contractual commitment will be doubly clear in the recovery

Fitness World Acquisition: Rationale & Business Overview PureGym: 2019 Results Highlights COVID-19 Update Group Financial Position: Liquidity & Leverage Outlook: Looking to the Future Appendix

In Investor Presentation 29 April 2020 12 12

Fitness World Acquisition

Rationale & business overview

In Investor Presentation 29 April 2020 13 13

Creating a pan-European gym champion

On On 14 January 202 020, Pu PureGy Gym acquired Fitness World Gr Group for £34 345 5 million1

• Fitness World Run-rate Adjusted EBITDA of £52 million
• Represents a 7.0x transaction multiple
• Transaction funded by a €445m bridging loan

Fi Fitness World is a market leading value gym operator

• Strong strategic fit for PureGym with an aligned low-cost model approach
• Clear #1 in Denmark and #7 value operator in Europe2
• #1 value in Switzerland (#2 overall 2) with emerging presence in Poland

Po Positions Pu PureGy Gym as a pan pan-Eu European Ch Champion

• Provides territory, diversification and scale benefits
• Over 500 gyms & 1.7m members combined as at 31 December 2019
• Presence in 4 countries with combined population c.120 million
• Fitness World is a highly resilient, profitable and cash generative business

1 1 The Acquisition represented an all cash transaction at an enterprise value of £345m (converted using DKK/GBP of 0.1146 as of 14 January 2020. Includes Fitness World net cash balance of £7m) and excludes finance lease liabilities assumed of £17m, i.e. £355m on a cash-free debt-free basis and 7.0x on a consistent exchange rate basis). Fitness World Group LTM Dec-19A Run Rate

• adj. EBITDA of c.£52m is converted using DKK/GBP of 0.1173 (representing the average exchange rate over 2019).

2 2 Measured by members. Source: OC&C analysis.

Pu Pure Gym Am Ambas assad ador: Sir Chris Hoy

(6 times Olympic champion) Fitness World Acquisition: Rationale & Business Overview PureGym: 2019 Results Highlights COVID-19 Update Group Financial Position: Liquidity & Leverage Outlook: Looking to the Future Appendix

In Investor Presentation 29 April 2020 14 14

1 Converted using 2019 average DKK/GBP of 0.1173. 2 2 Members # excludes pre-opening members, includes members at PureGym branded gyms only. Gyms # includes PureGym branded gyms only. 3 3 Adj. EBITDA defined as profit or loss for a certain period before income tax expense, net finance cost, depreciation of property, plant and equipment, right of use assets, amortisation of intangible fixed assets, impairment of property, plant & equipment, profit/loss on disposal of property, plant and equipment, lease modifications, exceptional administrative expenses, and other extraordinary items, after adding back Pre-Opening Costs and the Cash Rent Adjustment. 4 4 Op. FCF calculated as adj. EBITDA less maintenance, refurb, and corporate capex and change in NWC, but before expansion capex. Operating cash flow conversion is calculated as operating cash flow divided by adj. EBITDA.

2019A, unless otherwise noted

Combined group at a glance

Me Members (number) Gy Gyms (number) Co Countri ries es of opera eration Re Revenue Re Revenue by geography Ru Run-ra rate e adjusted ed EBITDA Ru Run-ra rate e adjusted ed EBITDA by by ge geogr graph aphy Ad Adjusted EBITDA

3 3 /ma

margin Op Operatin ing FCF / Conve versio ion

4 4

1 (UK) 1.1m2 2632 £255m £105m £89m / 35% £78m / 87% 3 (UK, CH, PL) 0.6m 241 £193m £52m £43m / 22% £24m / 55% 4 (UK, DK, CH, PL)) 1.7m 504 £447m £161m (inc RR synergies) £132m / 29% £101m / 77%

UK 58% DK 35% CH 6% PL 1% UK 67% DK 27% CH 5% PL 1% DK 83% CH 14% PL 3% DK 83% CH 15% PL 1% UK 100% UK 100%

1

>4 >40% of revenue

• utside the UK

~9 ~95% of EBITDA from markets with #1 positions

Fitness World Acquisition: Rationale & Business Overview PureGym: 2019 Results Highlights COVID-19 Update Group Financial Position: Liquidity & Leverage Outlook: Looking to the Future Appendix

In Investor Presentation 29 April 2020 15 15

Clear path to drive stakeholder value from combination

Ma Margin improvement through application of Group best practice

• Apply world class revenue and yield management techniques
• Optimisation of the Danish estate
• Transfer value adding initiatives across portfolio such as ancillary sales

Ca Capture benefits of geographic diversification & scale

• We are already seeing the benefits of geographical diversification
• Cost synergies from procurement, eliminating overhead duplicated and

harmonising operating models

• Leverage scale in key areas such as IT, digital strategy and online investment

Ac Accelerate market expansion

• Switzerland and Poland currently underserved markets providing further

growth opportunity

Fitness World Acquisition: Rationale & Business Overview PureGym: 2019 Results Highlights COVID-19 Update Group Financial Position: Liquidity & Leverage Outlook: Looking to the Future Appendix

In Investor Presentation 29 April 2020 16 16

Global “Premier League” of budget gym operators emerging

Fitness World Acquisition: Rationale & Business Overview PureGym: 2019 Results Highlights COVID-19 Update Group Financial Position: Liquidity & Leverage Outlook: Looking to the Future Appendix

500+ Sites 700+ Sites 700+ Sites 2,000+ Sites

In Investor Presentation 29 April 2020 17 17

Group Financial Position

Combined Group liquidity & pro-forma leverage position

In Investor Presentation 29 April 2020 18 18

Group liquidity

£1 £150m available liquidity as as at at 20 Apr pril 2020:

• £155m cash on the balance sheet, includes:

‒ Benefit of £14m Fitness World revenue generating initiatives during closure period ‒ £85m fully drawn Revolving Credit Facility

• £10m overdraft facility available
• Less £15m capital expenditure already incurred

Ac Actions taken to preserve available liquidity:

• Postponed all new site capital expenditure and most site refurbishment

projects

• Pulled back on discretionary expenditure
• Implemented broad programme of cost mitigation measures across the

entire Group Eq Equates to 33 3 we weeks of current burn rate

Fitness World Acquisition: Rationale & Business Overview PureGym: 2019 Results Highlights COVID-19 Update Group Financial Position: Liquidity & Leverage Outlook: Looking to the Future Appendix

In Investor Presentation 29 April 2020 19 19

1 1 Includes 2019 PureGym Run-Rate Adjusted EBITDA of £105m and 2019 Fitness World Run-Rate Adjusted EBITDA of £52m (converted at an average rate for 2019 of DKK/GBP 0.1173) and £4.5m of potential synergies. 2 2 In the event that the bridge is not refinanced by January 2021, the documentation provides for it to convert into a term loan with maturity matching that of the current fixed rate notes (due 2025). In general, the key terms of this debt and maximum interest rate are consistent with our existing sterling notes.

Pro-forma Combined Group leverage position at Dec’19

4. 4.6x Pro-For Forma Gr a Group L

• up Lev

ever erage P age Pos

• sition
• n
• Fitness World transaction funded by €445m bridge loan (£381m)
• Pro-Forma Senior Secured Net debt £738m as at 31 December 2019
• Run-Rate Adjusted EBITDA £161m1, includes £4.5m potential

synergies

• Returning to 4.6x leverage, consistent with leverage at original bond

issuance (Jan’18) No No “clif liff edge” on brid idge loan

• Bridge loan remains in place until January 2021, after which it

converts to a term loan2 CO COVID-19 19 clo losure impact

• Weekly cash burn and working capital deferments of c.£25m will

increase the Group’s net debt position in the second half

• Leverage update will be provided during Q1 2020 results in May

Cash Senior Secured Notes 6.375% EUR Senior Secured Bridge Loan To Total Senior Secured Net Debt Non-property leases To Total Net Debt 2019 Run-Rate Adjusted EBITDA1 Pr Pro-fo form rma at 31 Dec 2019 (£m) 4. 4.6x 4. 4.7x

Fitness World Acquisition: Rationale & Business Overview PureGym: 2019 Results Highlights COVID-19 Update Group Financial Position: Liquidity & Leverage Outlook: Looking to the Future Appendix

(73) 430 381 73 738 8 20 75 758 161 Le Leverage £m £m

In Investor Presentation 29 April 2020 20 20

Key stakeholders have affirmed their support

Hi Highly supportive and well capi capital alised ed equi equity spons ponsor

• r
• PureGym majority owners Leonard Green & Partners (“LGP”) are experienced fitness investors with a global perspective
• LGP closely involved through weekly updates and are pleased with progress on cash burn and liquidity position
• Highly supportive of management team, the business and its future prospects
• Recognise PureGym’s strong leadership position and the ability for the value segment to gain significant market share in

recessionary environments

• $15bn of recently raised funds available to support portfolio investments if required

‘B ‘B’ ’ ra rating intact as Cre redit Rating Agencies account fo for r COVID-19 19 disruption in April

• Fitch ‘B-’
• S&P ‘B-’
• Moody’s ‘B3’

Fitness World Acquisition: Rationale & Business Overview PureGym: 2019 Results Highlights COVID-19 Update Group Financial Position: Liquidity & Leverage Outlook: Looking to the Future Appendix

“The company has sufficient liquidity headroom to weather a lockdown period of at least three to six months, while its low-cost business model should help the company recover and perform well in a recessionary environment.”

Fitch 8 April 2020

In Investor Presentation 29 April 2020 21 21

Outlook

Looking to the future

In Investor Presentation 29 April 2020 22 22

Focus during closure on member engagement, trust & loyalty

Fr Free app with over 100 00 workouts and classes for ex existing ng and and pr prev evious

• us mem

ember bers

• Over 400k active mobile app users since 20th March,

who have conducted more than 1m sessions

• During closure still a top 5 ranked Apple Health &

Fitness sector app

Fitness World Acquisition: Rationale & Business Overview PureGym: 2019 Results Highlights COVID-19 Update Group Financial Position: Liquidity & Leverage Outlook: Looking to the Future Appendix

Ex Exclusive live daily classes, wo workouts and nutrition and we wellbeing content

• Over 1.4 million views of live and on demand classes
• Social following now over 650k, with Instagram

growing 20% since lockdown

In Investor Presentation 29 April 2020 23 23

New normal: ongoing content added to app & ahead of reopen

Ho Home workout content developed in mobile app

Fitness World Acquisition: Rationale & Business Overview PureGym: 2019 Results Highlights COVID-19 Update Group Financial Position: Liquidity & Leverage Outlook: Looking to the Future Appendix

20 60 110 70 80 190 40 100 90 90 180 180 400 400 April May June # workouts Third party PureGym branded PureGym created

In Investor Presentation 29 April 2020 24 24

Membership base is proving to be reasonably resilient

Robust member base largely intact at reopening

• 83% of Group member base expected to be intact vs budget around time of reopening - 1.5m members forecast to

be in “freeze” mode

• New joiners expected to re-commence, albeit slowly, when business reopens

Fitness World Acquisition: Rationale & Business Overview PureGym: 2019 Results Highlights COVID-19 Update Group Financial Position: Liquidity & Leverage Outlook: Looking to the Future Appendix

84% 83% 87% 82% 83% Poland Switzerland Denmark UK Group

Fo Forecast member base at opening versus original budget

Actual members Budget

No Note: Data as at 15 April 2020

07-Mar 13-Mar 19-Mar 25-Mar 31-Mar 06-Apr 12-Apr

Nu Number of UK leavers vs budget

Leavers 7 day average Budget leavers 7 day average

Short period of ”excess leavers” around closure Leaver rate now running well below

• riginal budget

Actual leavers 7 day moving average Budget leavers 7 day moving average

In Investor Presentation 29 April 2020 25 25

Research suggests willingness to return to the gym

Cu Current r t rese search su suggests a sts a h health thy w willingness to ss to r retu turn to to th the gym and th that t hygiene will be criti tical

• Positive indication that members intend to return

‒ 67% of members indicate willingness to come back (63% in Denmark) when gyms re-open ‒ 61% of recent UK leavers² state the intention to re-join when gyms re-open

• However, cleanliness and hygiene will be critical and members

want to play their part ‒ 83% of members describe cleanliness and hygiene as ‘essential’ or ‘much more important’ than before the crisis in the UK (84% in Denmark) ‒ 70% intend to change their behaviour in the UK, including wiping down kit and social distancing (76% in Denmark)

Fitness World Acquisition: Rationale & Business Overview PureGym: 2019 Results Highlights COVID-19 Update Group Financial Position: Liquidity & Leverage Outlook: Looking to the Future Appendix

1 Member survey conducted in April 2020, includes responses from 1,616 members in the UK and 399 members in Denmark. 2 Leaver survey conducted in April 2020, includes responses from 651 members in the UK.

67% 63% 19% 17% 14% 20% PureGym Fitness World Denmark Willing or very willing Indifferent Unwilling

Wi Willingness to come me back when gyms ms reopen1 Im Importance of cleanliness & hyg ygiene to members1

PureGym UK 53% 26% 30% 58% 16% 16% PureGym UK Fitness World Denmark Essential Much more important Same as before

• r very unwilling

In Investor Presentation 29 April 2020 26 26

PureGym takes a leading role in achieving reopening

Pu PureGym m is is pla layin ing a le leadin ing role le wit within in the in industry to seek Governme ment agreeme ment on reopenin ing protocols ls and appr approaches

• aches
• Governments typically following WHO guidance (with local “tweaks”) on lifting restrictions
• When Governments allow gyms to reopen, certain restrictions likely to be in place for sometime:

‒ Limit member numbers in gym, potentially controlled via “slot booking” ‒ Social distancing measures (workout space delineation and equipment separation) ‒ Restrictions to certain facilities (group exercise and locker rooms) ‒ Enhanced cleaning regimes: setting a new standard ‒ Clear communication and enforcement of health and safety guidance

• Phased approach to reopening society and businesses is emerging across Europe

Fitness World Acquisition: Rationale & Business Overview PureGym: 2019 Results Highlights COVID-19 Update Group Financial Position: Liquidity & Leverage Outlook: Looking to the Future Appendix

In Investor Presentation 29 April 2020 27 27

Cu Current “best estimate” of reopening phase

Current view on reopening phase by geography

Fitness World Acquisition: Rationale & Business Overview PureGym: 2019 Results Highlights COVID-19 Update Group Financial Position: Liquidity & Leverage Outlook: Looking to the Future Appendix

UK UK De Denmark Sw Switzerland Po Polan and Ja Jan Fe Feb Ma Mar Ap Apr Ma May

Lo Lockdown Gy Gyms open pr

• pen pre-CO

COVID-19 19 Ph Phased society y / business reopening

Management intensely focused on reopening phase:

• Extensive day-to-day plan for two-week recommissioning period
• Operational processes, including capacity control, revised cleaning regimes and direct debit management
• Commercial and marketing plans for reopening progressing well

Diversification benefiting the business through staggered commencement of cash inflows

Ju Jun Ju Jul

21st 12th 16th 16th

In Investor Presentation 29 April 2020 28 28

Delivering social distancing in a typical PureGym site

Fitness World Acquisition: Rationale & Business Overview PureGym: 2019 Results Highlights COVID-19 Update Group Financial Position: Liquidity & Leverage Outlook: Looking to the Future Appendix

Group Ex Studio Free Weights Area

Cycle Studio Cardio Fixed Pin / Cable Flex / Functional

Co Contro rols in place: 1. Controlled POD entry 2. 2 metre rule across the gym floor and locker room 3. Cardio: every other machine out of use to maintain separation 4. Studio’s: 50% maximum occupancy in Group Exercise and Cycle 5. Free Weights: some equipment removed from the floor and spaced at 2m intervals 6. Flex and Functional: floor spacers to create 2m stations 7. Fixed Pin and Cable: some equipment out of use to maintain separation

1 2 2 3 4 4 6 7 5

In Investor Presentation 29 April 2020 29 29

Clubs have capacity to operate if members adjust behaviour

• There is sufficient capacity to accommodate members although some ”flattening of the peak” will be required
• In our recent survey many members suggested they will aim to visit at less busy times

Fitness World Acquisition: Rationale & Business Overview PureGym: 2019 Results Highlights COVID-19 Update Group Financial Position: Liquidity & Leverage Outlook: Looking to the Future Appendix

00:00 00:30 01:00 01:30 02:00 02:30 03:00 03:30 04:00 04:30 05:00 05:30 06:00 06:30 07:00 07:30 08:00 08:30 09:00 09:30 10:00 10:30 11:00 11:30 12:00 12:30 13:00 13:30 14:00 14:30 15:00 15:30 16:00 16:30 17:00 17:30 18:00 18:30 19:00 19:30 20:00 20:30 21:00 21:30 22:00 22:30 23:00 23:30 Members in the gym Time of day Usage Potential limit

1 Actual member usage on Monday 9th March 2020

Ac Actu tual u usage v vs p pote tenti tial l limit ( t (average a across l large b box f format e t esta tate te1)

Pre-crisis usage Potential limit post crisis 30 30 – 50% 50% re reduction in ma maximu mum m capaci capacity Typical pre-crisis maximum capacity

In Investor Presentation 29 April 2020 30 30

Using technology platform to help manage restricted access

Fitness World Acquisition: Rationale & Business Overview PureGym: 2019 Results Highlights COVID-19 Update Group Financial Position: Liquidity & Leverage Outlook: Looking to the Future Appendix

“L “Live ve” ” feeds s of current attendance by gym and member fe feedback used by staff ff fo for r monitori ring and contro rol To Tools and functionality to support members in choosing wh when to visi sit gyms, s, booking sl slots, s, gaining access, ss, et etc

ABERDEEN KITTYBREWSTER 80 ABERDEEN RUBISLAW 92 ABERDEEN SHIPROW 76 AINTREE 74 ALTRINCHAM 97 ASHTON UNDER LYNE 77 AYLESBURY 91 BARNSTAPLE 59

In Investor Presentation 29 April 2020 31 31

Sufficient available space to adopt safety measures

Fitness World Acquisition: Rationale & Business Overview PureGym: 2019 Results Highlights COVID-19 Update Group Financial Position: Liquidity & Leverage Outlook: Looking to the Future Appendix

The average “standard” PureGym site in the UK has around the same surface area as 4-5 tennis courts

In Investor Presentation 29 April 2020 32 32

Cleanliness and hygiene will clearly be the #1 priority

• TrainSafe will drive a significant and permanent shift in

member behaviour to ensure their safety, as well as that

• f other members and staff
• It will extend beyond the gym itself with an extensive

communication programme backed up with contractual and enforcement changes

Fitness World Acquisition: Rationale & Business Overview PureGym: 2019 Results Highlights COVID-19 Update Group Financial Position: Liquidity & Leverage Outlook: Looking to the Future Appendix

De Define & ma maintain excellent cleaning & hygiene standards Sh Shift member and staff behavior to ensure safety

• Benchmarked on NHS

NHS non-cl clinical settings

• 3 hourly cleaning of high touch points - 24/7
• Complemented by overnight deep cleans by external

cleaning provider

• Extensive provision of member cleaning stations (anti-

viral wipes)

• Full PPE for staff along with temperature checking and

health declarations

In Investor Presentation 29 April 2020 33 33

Reinforced and extensive in gym and online communications

• xx

Fitness World Acquisition: Rationale & Business Overview PureGym: 2019 Results Highlights COVID-19 Update Group Financial Position: Liquidity & Leverage Outlook: Looking to the Future Appendix

En Engage We will ensure all members are fully aware of the new regimes in place, in advance of visiting the gym:

• Full CRM education programme with video walk throughs for members and staff
• Full visibility throughout the website, social media, and app

En Encourage

• Full in gym messaging in all areas, including video screens
• App notifications will remind and encourage members on visiting the gym
• Members will be encouraged to self-police with a shared-conduct approach;

keeping gyms safe for everyone En Enforce

• Terms and conditions will be updated with new Safety & Hygiene procedures
• This will form part of the joining and welcome processes
• Members will be banned if they fail to uphold collective standards

In In g gym ym a and m multi c channel c communication o

• f “

“new r rules” Mu Multi-st stage approach to enforcing adherence

If you are showing any symptoms of Covid-19, do not visit the gym

1

Check the app to check availability and bring your

• wn towel & water bottle

2

You must follow the TrainSafe rules clearly laid

• ut in the gym all times

3

Safety is our No.1 priority and everyone must play their part Extensive in gym communications All members and new members will be fully educated on the new standards

In Investor Presentation 29 April 2020 34 34

Conclusions

Fitness World Acquisition: Rationale & Business Overview PureGym: 2019 Results Highlights COVID-19 Update Group Financial Position: Liquidity & Leverage Outlook: Looking to the Future Appendix

St Strong position heading into pandemic following an excellent FY 201 019 9 and start to 202 020 Re Reacted quickly as pandemic situation progressed Go Good progress delivered in mitigating cash burn rate although more to do £1 £150m of available liquidity today with strong shareholder support Ma Management team are dealing with the past but really focused on the reopening phase Ex Expecting revenue from a solid member base to be switched back on, albeit slowly, in June St Strategic logic for Fitness World acquisition remains intact for the long-te term

1 2 3 4 7 5 6

In Investor Presentation 29 April 2020 35 35

Appendix 1

PureGym additional information for FY 2019

In Investor Presentation 29 April 2020 36 36

Capital expenditure

• £50.6m spent on expansionary capex

‒ 41 new sites including 11 SBF ‒ 263 total gym estate (15 SBFs)

• £16.5m spent on maintenance & refurbishment works across estate
• 21 refurbishments completed YTD

Expansionary capital expenditure Maintenance and refurb capital expenditure Tota tal l capita ital l expenditu iture £m £m 2018 20 2019 32.5 11.3 43 43.8 50.6 16.5 67 67.1

Fitness World Acquisition: Rationale & Business Overview PureGym: 2019 Results Highlights COVID-19 Update Group Financial Position: Liquidity & Leverage Outlook: Looking to the Future Appendix

In Investor Presentation 29 April 2020 37 37

IFRS 16 Lease Accounting

• No

No economic ic im impact on the group and no affect on how business run

• No

No im impact on Adju justed EBITDA which is reported on a consistent basis2

• No

No im impact on Agency Credit it Ratin ings

• In

Income statement ‒ Rent charge replaced by depreciation of ROU asset and finance charge on unwind of lease liability ‒ Overall income statement charge is higher in the earlier portion of a lease and lower in the later compared to previous accounting

• treatment. As PureGym has a relatively “young” lease portfolio,

loss before tax will increase in 2019 as a result of the change

• Ba

Balance sheet as at 1 Jan 201 019 ‒ ROU asset created of £215.3m, being the discounted future cashflows at inception less depreciation to 31 Dec 2018 ‒ Present Value of lease payments, net of deferred rent creditor resulted in lease liability of £295.9m on implementation, split between current and non-current ‒ Reduction in net assets of £70.7m

1 Modified retrospective application with right of use (‘ROU’) asset measured using the retrospective method 2 See definitions in Glossary which are updated to reflect differences pre and post IFRS 16 implementation

Non-Current assets Current assets Cash Total assets Publicly traded bond debt Capitalised finance costs Lease liabilities Net deferred tax liability Other current liabilities Total liabilities exc preference shares Re Reconciliation to IFRS RS balance sheet: Net assets exc preference shares Less preference shares* Net liabilities

At 3 At 31 D Dec 2 2019, £ £m

Po Post-IF IFRS 16 16 IF IFRS 16 adj adjus ustment ent Pr Pre-IF IFRS 16 16 744.5 28.2 51.6 824.3 (430.0) 7.3 (2.7) (10.0) (102.0) (537.4) 286.9 (338.0) (51.1)

Pi Pinnacle Topco Ltd Consolidated balance sheet

247.6 (4.3)

• 243.3
• (334.3)

7.7 9.9 (316.7) (73.4)

• (73.4)

992.16 23.9 51.6 1,067.6 (430.0) 7.3 (337.3) (2.3) (92.1) (854.1) 213.5 (338.0) (124.5)

Im Implementation of IF IFRS 16 1 1 January 20191 …. …. Opera rating leases capi capital alised ed ‘o ‘on bala lance sheet’

Fitness World Acquisition: Rationale & Business Overview PureGym: 2019 Results Highlights COVID-19 Update Group Financial Position: Liquidity & Leverage Outlook: Looking to the Future Appendix

In Investor Presentation 29 April 2020 38 38

PureGym KPIs

To Total number of Pu PureGyms To Total number of unconverted, open Soho gyms To Total number of gyms To Total number of Mature Gyms To Total number of members (‘000s) Av Aver erage age num number ber of

• f mem

ember bers (‘000s) Av Aver erage age num number ber of

• f mem

ember bers per per gy gym Av Aver erage age rev evenue enue per per mem ember ber per per mont

• nth

h (£) Re Reporte ted EBITDA (£ million) Adj Adjus usted ed EBITDA A (£ million) Adj Adjus usted ed EBITDA A mar argi gin Gy Gym Site Adjusted EBITDA DA (£ million) Gy Gym Site Adjusted EBITDA DA margin Ma Mature Gym Adjusted EBITDA (£ million) Av Aver erage age Mat atur ure e Gym Adj Adjus usted ed EBITDA A (£ million) Av Aver erage age Mat atur ure e Gym Adj Adjus usted ed EDITDA A Mar argi gin n (%) Av Aver erage age Mat atur ure e Gym ROCE (%) Av Aver erage age Ini nitial al Capi apital al Inv nves estment ent for

• r Mat

atur ure e Gyms (£ million) Ru Run-Ra Rate te Adjuste ted EBITDA (£ million) Op Operating Ca Cash Flow (£ million) Op Operating Ca Cash Flow Co Conversion Pr Pro Forma Net Debt (£ million) Ra Rati tio of Pro Forma Net t Debt t to to Group Ru Run-Ra Rate te Adjuste ted EBITDA (LTM) Ra Rati tio of Ru Run-Ra Rate te Adjuste ted EBITDA to to Pro Forma Net t Inte terest t Expense

£m £m

20 2019 2018

1

Quarter ended 31 Dec 20 2019 2018

1

12 months ended 31 Dec

263

• 263

n/a 1,135 1,160 4,602 18.84 31.7 22.9 35.0% 29.0 44.2% n/a n/a n/a n/a n/a n/a 23.6 103.1% 381.1 n/a n/a 222 6 228 n/a 1,012 1,039 4,789 18.56 16.4 19.2 33.2% 24.6 42.6% n/a n/a n/a n/a n/a n/a 28.0 145.7% 370.2 n/a n/a 222 6 228 170 1,012 1,032 4,994 18.45 73.1 81.3 35.6% 102.7 45.0% 88.3 519 45.9% 43.6% 1,190 95.0 82.7 101.8% 370.2 3.9x 3.7x 263

• 263

192 1,135 1,124 4,710 18.90 125.2 89.1 34.9% 113.0 44.3% 99.4 518 45.5% 43.3% 1,195 104.5 77.8 87.4% 381.1 3.6x 3.7x

No Note: IFRS 16 implemented from 1 January 2019. Prior periods continue to report under IAS 17 1 FY2018 financials reflect the result of Pinnacle Bidco plc, restated on a like-for-like basis for the 12 months to 31 December 2018.

Fitness World Acquisition: Rationale & Business Overview PureGym: 2019 Results Highlights COVID-19 Update Group Financial Position: Liquidity & Leverage Outlook: Looking to the Future Appendix

In Investor Presentation 29 April 2020 39 39

Appendix 2

Fitness World acquisition and the Combined Group

In Investor Presentation 29 April 2020 40 40

1 1 Measured by members as of December 2019. 2 Converted using 2019 average DKK/GBP of 0.1173. 3 RR adj EBITDA is the adjusted EBITDA including RR adj.: we define Run Rate Adjustments as the adjustment made to those gyms which are less than three years old at the end of the reporting period. These adjustments replace the Adjusted EBITDA earned by these sites in the last twelve month period with the projected Adjusted EBITDA for their third year of operation.

De Denmark

• 185 sites
• ~486k members

241 241 Gym Gyms

Across Denmark, Switzerland and Poland

£1 £193m

2

2019A revenue

£5 £52m

2

2019A RR adj.3

~5 ~589k

Members

Fitness World Group at a glance

• Founded in 2005
• Market leader in Denmark with 45% market share1
• Acquired the leading value operator in Switzerland, Basefit.ch, in Oct

2018

• Growing presence in Poland since 2015
• Fitness World operates a similar business model as PureGym in the U.K.,

characterised by affordable and flexible gym memberships with no fixed term contracts and extended opening hours ‒ High customer engagement through strong digital member platform ‒ Wide range of membership options catering to different consumer needs ‒ Ability to change or freeze membership at any time, increases the likelihood of re-joiners ‒ Strong circulation model with c.40% joiners being previous members ‒ Very high Value Added Sales (VAS) per visit including own, high margin, nutrition brand, ”Functional Nutrition”

Ge Geographic presence

As of December 2019

Sw Switzerland

• 39 sites
• ~79k members

Po Poland

• 17 sites
• ~25k members

Fitness World Acquisition: Rationale & Business Overview PureGym: 2019 Results Highlights COVID-19 Update Group Financial Position: Liquidity & Leverage Outlook: Looking to the Future Appendix

In Investor Presentation 29 April 2020 41 41

Fitness World Group by numbers

Gy Gyms (number)

160 160 180 180 228 228 241 241 2016A 2017A 2018A 2019A

Ad Adjusted EBITDA2 (£ (£m)1 RR RR Adjusted EBITDA3 (£ (£m)1 RR RR Adjusted EBITDA by geography

(2019A)

1 1 Converted using 2016, 2017, 2018 and 2019 average DKK/GBP of 0.1063, 0.1170, 0.1201, 0.1173 respectively. 2 2 Adj. EBITDA is before pre-opening costs and adjusted for non-cash expenses. 3 Calculated as Adj. EBITDA plus immature units (open for less than 36 months) EBITDA at maturity less actual contribution of immature units.

457 457 476 476 565 565 589 589 2016A 2017A 2018A 2019A

Me Members (k)

+8 +8.9% CAGR

Re Reve venue (£m)1

117 117 145 145 164 164 193 193 2016A 2017A 2018A 2019A

+1 +14.6% CAGR +1 +17.9% CAGR

24 24 30 30 35 35 43 43 2016A 2017A 2018A 2019A

21 21% 21 21% 22% 22% 21 21%

% margin

+20 +20.4 .4% % CAG AGR R

27 27 34 34 47 47 52 52 2016A 2017A 2018A 2019A

+24 +24.0% CAGR

DK 83% CH 15% PL 1%

Fitness World Acquisition: Rationale & Business Overview PureGym: 2019 Results Highlights COVID-19 Update Group Financial Position: Liquidity & Leverage Outlook: Looking to the Future Appendix

In Investor Presentation 29 April 2020 42 42

~4 ~45%

% Market share8

21 21.7 26 26.0 27 27.3 27 27.4 2016A 2017A 2018A 2019A

So Sources: : December 31st year end. McKinsey. OC&C analysis. 1 ~10% of Danish population > 14 years old are Fitness World members. 2 As of May 2019. Source: McKinsey. 3 High level of re-joiners with ~40% of FY16A and FY17A churners having re-joined as of May-19. 4 Converted using 2016, 2017, 2018 and 2019 average DKK/GBP of 0.1063, 0.1170, 0.1201, 0.1173 respectively. 5 5 ARPM calculated as revenue divided by closing members, divided by 12. 6 Calculated as length of membership, back to the month of the last subscription start for the full member base at each shown point in time. Source: McKinsey. 7 7 Op. FCF calculated as adj. EBITDA less maintenance, refurb, and corporate Capex and change in NWC, but before expansion capex. Denmark Capex and change in NWC is calculated as total Capex and change in NWC multiplied by Denmark % share of total revenue. 8 As of March 2019. 47 474 45 456 445 445 48 486

Denmark operations

185 185 Gyms Op Operations s highlights s 32. 32.2

2

Danish population are Fitness World Members1

~1 ~10%

Average membership tenure (months)

~4 ~40% Member churn ~4 ~486k Members Ge Geographic prese sence

Aa Aalborg Aa Aarhus Od Odense Co Copenhagen

Me Member and ARPM De Development ( (£)4,

4,5

+8 +8.1% CAGR

Closing members

29 29 30 30 32 32 33 33 2016A 2017A 2018A 2019A

Gr Growi wing customer te tenure6

Continuous subscription months

11 11 21 21 20 20 22 22 2016A 2017A 2018A 2019A

63% 63% 69% 69% 42 42% 57% 57%

St Strong

• ng cas

cash h pr prof

• file

e (£)

Illustrative Op. FCF4,

4,7

Op FCF % conversion

116 116 14 142 155 155 160 160 27.0 34.0 43.0 44.0

2016A 2017A 2018A 2019A

Revenue RR adj. EBITDA

Ke Key financials (£)4

+1 +17.0% CAGR +1 +11.3% CAGR

Fitness World Acquisition: Rationale & Business Overview PureGym: 2019 Results Highlights COVID-19 Update Group Financial Position: Liquidity & Leverage Outlook: Looking to the Future Appendix

In Investor Presentation 29 April 2020 43 43

Switzerland (Basefit.ch) and Poland operations

1 2019 to 2023E Polish value health and fitness market CAGR in revenue terms. Source: OC&C. 2 2 Converted using 2016, 2017, 2018 and 2019 average DKK/GBP of 0.1063, 0.1170, 0.1201, 0.1173 respectively. PF financials, Basefit.ch is under prior ownership for 2016-2018. 3 3 Source: Mckinsey.

Switzerland and Poland operations

11 11 16 16 21 21 26 26 4 6 6 8

2016A 2017A 2018A 2019A

Sw Switzerland (Basefit.ch) operations PF PF Ke Key fin inancia ials ls

2

£m £m

Po Polis lish fit itness ma market & comp mpetit itiv ive la landscape

• Entered market in 2015 with 3 gyms
• Value segment expected to grow 6% p.a., significantly above industry

average

• Growth drivers are the increases in amount of gyms, health

consciousness, and disposable income

• Highly fragmented market overall

─ Top 19 branded players constitute only 14% of total gym market3

17 17 Gyms Po Pola land operatio ions hig ighlig lights ~2 ~25k Members

Revenue CAGR

FY16A – FY19A

50 50%

Polish Value Operator

3rd

rd La

Large gest

Member CAGR

FY16A – FY19A

28 28%

Expected growth in Polish Value Market

~6 ~6% p. p.a

1

39 39 Gyms Sw Switzerland operations highlights ~7 ~79k Members

Swiss Value Operator

La Large gest 27 27% p. p.a

Revenue CAGR

FY16A – FY19A

34% 34%

RR adj. EBITDA CAGR

FY16A – FY19A

35% 35% Member churn

+3 +34% CAGR +2 +27% CAGR

Prior ownership until Oct-2018

Revenue RR adjusted EBITDA

Fitness World Acquisition: Rationale & Business Overview PureGym: 2019 Results Highlights COVID-19 Update Group Financial Position: Liquidity & Leverage Outlook: Looking to the Future Appendix

In Investor Presentation 29 April 2020 44 44

So Source: : OC&C analysis. 1 2018A total health and fitness market size. 2 Population as of 2018A . 3 Including estimated RR synergies of £4.5m.

#2

79k 79k 39 39 Ma Market Size1 €0.8bn Popul Populat ation

• n2

8. 8.5m 5m 20 2019A R Revenue £2 £27m 20 2019A RR RR Adj. EBI EBITDA £8 £8m

#1 #1

48 486k 18 185 Ma Market Size1 €0.4b 4bn Popul Populat ation

• n2

5. 5.8m 8m 20 2019A R Revenue £16 £160m 20 2019A RR RR Adj. EBI EBITDA £4 £44m 25 25k 17 17 Ma Market Size1 €0.9bn Popul Populat ation

• n2

38m 38m 20 2019A R Revenue £6 £6m 20 2019A RR RR Adj. EBI EBITDA £1m £1m 1, 1,13 135k 26 2635 Ma Market Size1 €4. 4.8bn Popul Populat ation

• n2

66m 66m 20 2019A R Revenue £2 £255m 20 2019A RR RR Adj. EBI EBITDA £10 £105m

Pu PureGym gr group

• up

1. 1.7m 50 504 Ma Market Si Size1 €6.9bn Po Population2 11 119m 20 2019A Reve venue £4 £447m 20 2019A RR RR Adj. EBI EBITDA £1 £161m3

Pu PureGym gr group

• up rev

evenue enue by by geogr geography aphy

(2019A)

UK 58% DK 35% CH 6% PL 1%

>4 >40% of revenue

• utside the UK

Fitness World Acquisition: Rationale & Business Overview PureGym: 2019 Results Highlights COVID-19 Update Group Financial Position: Liquidity & Leverage Outlook: Looking to the Future Appendix

Combined Group: A healthy degree of diversification

In Investor Presentation 29 April 2020 45 45

Expanding presence as a leading player in Europe

So Sources: : European Health & Fitness Market 2019 Report – EuropeActive. 1) PureGym excludes pre-opening members, includes members at PureGym branded gyms only. PureGym, Fitness World and The Gym Group as of Dec-2019, and Basic-Fit as of Q3 2019. Members of other players as per latest estimates included in the 2019 EuropeActive Report.

Combined Group: A leading player in Europe

2, 2,128 128 1, 1,950 950 1, 1,724 724 1, 1,135 135 794 794 720 720 650 650 609 609 589 589 568 568 46 466 45 450 40 400 389 389 380 380

# # of EU co countries es pres esen ent 5 7 4 1 1 4 1 8 3 3 5 1 2 2 1 Ho Home country ry Fra Franchise No No No No No No No No No No Ma Mainly No No No No No No No No c.

• c. 50/50

Ma Mainly Ma Mainly No No ~5 ~50/50

1 1 1

The combined PureGym / Fitness World business is #3 #3 by members, and #2 #2 by number

• f
• f gy

gyms – partly reflecting continued roll-out of sites that are still ramping up

Low Cost Mid-Market / Premium

Nu Number of Members

Fitness World Acquisition: Rationale & Business Overview PureGym: 2019 Results Highlights COVID-19 Update Group Financial Position: Liquidity & Leverage Outlook: Looking to the Future Appendix

In Investor Presentation 29 April 2020 46 46

…delivering unbeatable value-for-money

Combined Group: Delivering unbeatable value-for-money

De Denma mark

No No fixed-te term rm contra tracts ts P P So Some P So Some So Some Va Value-fo for-mo money1 £2 £212 £2 £25+2 £6 £60+ £2 £21+ 1+3 £23 23+ £29 29+ Si Simple, transp sparent pr prici cing ng P So Some So Some P So Some So Some On Online joining / / mem ember bershi hip p managem anagement ent P P So Some P So Some So Some Na National footprint P So Some So Some P So Some So Some 24 24 / / 7 7 / / 365 365 acces access P So Some So Some So Some So Some So Some Hi High qual quality y fit-out

• ut

P P Mi Mixed P Mi Mixed Mi Mixed Pr Prof

• fes

essional

• nal, hel

helpf pful ul staf aff P P P P P P Ex Extens ensive e cl clas ass schedul chedule e P So Some P P So Some P Per Personal

• nal trai

aini ning ng P P P P So Some P Br Broad

• ad dem

demogr

• graphi

aphic c cons consum umer er bas base e P So Some So Some P O So Some We Wet fa faciliti ties (e.g .g. . pool, , sauna) O So Some So Some O So Some P Te Tennis / squash courts O O So Some O O So Some Re Receptionist / sales office O So Some P P P P Ca Café bar / restaurant offering O O So Some O O So Some Op Operating model

Owned and

• perated

Owned and operated / franchise Owned and operated / franchise Owned and

• perated

Owned and operated / franchise Owned and operated / franchise

Other value

• perators

Traditional

• perators

Other value

• perators

Traditional

• perators

Dif Differentia iated, powerful l cons consum umer er pr propos

• position
• n

No No high cost, low ut utilisat ation

• n am

ameni enities es whi which ch was waste e space pace and and dr drive e up up cos cost

1 Converted using 2019 average DKK/GBP of 0.1173. 2 Source: Brand websites. LDC 2019. Average over all sites of monthly peak gym membership fee on the non contract option. 3 Based on Fitness Basic membership which provides access to one club only and no group classes (cheapest membership offered). Offered in selected Danish gyms.

Fitness World Acquisition: Rationale & Business Overview PureGym: 2019 Results Highlights COVID-19 Update Group Financial Position: Liquidity & Leverage Outlook: Looking to the Future Appendix

In Investor Presentation 29 April 2020 47 47

Combined Group: Pro forma financials

To Total net adjustments, including:

• Cash rent adjustments to normalise EBITDA such that it is comparable between

EBITDA reported under IFRS16 in the current period and IAS17 in the prior periods

• Pre-opening costs adjustment related to the total of all gym site operating costs

incurred during the pre-opening period, including staff, marketing, and rent expenses

• Share based compensation add-backs, as well as QoE adjustments related to costs

found to be one-time in nature Ru Run-ra rate adju justments1

• Run-rate EBITDA adjustments references expected incremental EBITDA contribution

from gyms which are less than 36 months old ‒ Gyms reach maturity circa month 24 and therefore first deliver fully mature annual EBITDA in year 3 (months 25-36)

• EBITDA from gyms that are less than 36 months old is projected to months 25 to

36, from which their current EBITDA contribution is subtracted to arrive at the run- rate adjustments

• Only gyms that are currently open are being accounted for, and no credit is given to

gyms that have yet to be opened

• On this basis, adjusting to full maturity as of FY 2019A delivers a further £25.1m of

EBITDA in aggregate

Se Set out below are the pro forma financials as if the Group were combined at end 20 2019

1 1 Run-rate adjustment methodology for PureGym is aligned with Offering Memorandum in 2018. The same methodology is applied to Fitness World run-rate adjustments. 2 2 Fitness World financials converted at an average rate of 0.1173 for the year ended 31 December 2019.

1 2

1 2 3

Re Reported EBITDA DA (I (IFRS RS 16) QoE adjustments Pre-opening costs Share-based payments Adjustment for cash rent Ad Adjusted EBITDA Run-rate adjustments Ru Run-ra rate Ad Adjusted EBITDA Adjustment for synergies Ru Run-Ra Rate Adjusted EBITDA DA, incl. synergies Pu PureGym Co Combined bus busines ness Fi Fitness Wo World2 £2 £209.1 0.8 3.6 0.3 (82.1) £1 £131.6 25.1 £1 £156.7 4.5 £1 £161.2 £8 £83.8 0.8 0.1

• (42.2)

£4 £42.5 9.6 £5 £52.2 £1 £125.2

• 3.5

0.3 (39.9) £8 £89.1 15.4 £1 £104.5

Syn Synergies

• Combination gives opportunity to realise £4.5m of synergies over time,

comprising: ‒ £1.9m overheads & procurements ‒ £0.8m IT cost optimisation ‒ £1.8m Estate management optimisation

FY FY20 2019 R Repor eported E ed EBITDA t to R

• Run

un-ra rate adjusted EBIT ITDA Bri ridge (£m)

3

Fitness World Acquisition: Rationale & Business Overview PureGym: 2019 Results Highlights COVID-19 Update Group Financial Position: Liquidity & Leverage Outlook: Looking to the Future Appendix

In Investor Presentation 29 April 2020 48 48

Combined Group: Track record of consistent cash generation

£ £ in millions 20 2017A 20 2018A 20 2019A 20 2017A 20 2018A 20 2019A 20 2017A 20 2018A 20 2019A Adj Adj. . EBITDA1 71 71 81 81 89 89 29 29 35 35 43 43 10 101 11 116 13 132 Ma Maintenance & Refurbishment Capex (7) (11) (15) (11) (11) (17) (19) (22) (32) Ch Changes in Working Ca Capital Inventories (0) (0) (1) (1) (0) (1) (1) (0) (2) Trade and Other Receivables (3) (1) (9) (1) (1) (1) (4) (2) (10) Trade and Other Payables 6 14 14 4 (0) (1) 10 13 13 To Total ∆ in in w work rkin ing c capit ital 3 13 13 4 4 2 2 (2 (2) (3 (3) 5 11 11 1 1 Op

• Op. FCF

CF2 67 67 83 83 78 78 20 20 22 22 23 23 87 87 10 105 10 101 % Conversion 94% 102% 87% 68% 63% 54% 87% 90% 77%

1 Adj. EBITDA is before pre-opening costs and adjusted for non-cash expenses. 2 Op. FCF calculated as adj. EBITDA less maintenance, refurb, and corporate capex and change in NWC, but before expansion capex. Operating cash flow conversion is calculated as operating cash flow divided by adj. EBITDA.

Fr Free cash flow

1 gener

generat ation

• n & conv

conver ersion

• n

Supports a strong deleveraging profile

History of industry-leading operating cashflow conversion Positive working capital inflows

1 2 Fitness World Acquisition: Rationale & Business Overview PureGym: 2019 Results Highlights COVID-19 Update Group Financial Position: Liquidity & Leverage Outlook: Looking to the Future Appendix

In Investor Presentation 29 April 2020 49 49 £m £m 31 31 De Dec 2019 x RR RR Adj. EBITDA DA3 Ad Adjustments Pr Pro-fo form rma x Pr Pro-fo form rma RR RR Adj. EBITDA DA4 SSRCF Available 60 0.6x 35 95 0.6x Cash (52) (0.5x) (21) (73) (0.5x) SSRCF Drawn

• Existing Senior Secured Notes

430 4.1x

• 430

2.7x EUR Senior Secured Bridging Loan1

• 381

381 2.4x To Total Senior Se Secure red Net Debt 378 378 3. 3.6x 6x 360 360 738 738 4. 4.6x Existing PureGym Non-property Finance Leases 3 0.0x

• 3

0.0x Rollover Fitness World Non-property Finance Leases

• 17

17 0.1x To Total Net Debt 381 381 3. 3.6x 6x 377 377 758 758 4. 4.7x LT LTM Dec ec-19 19 Run Rate adj. EBI EBITDA 10 105 57 57 16 161

So Sources £m £m % Drawn RCF (£95m available)

• EUR Senior Secured Bridging Loan1

381 100% To Total 38 381 10 100%

Transaction funding

Sour Sources ces and and us uses es

1 1 Acquisition funded through a €445m senior secured bridge facility. In general, the key terms of this debt and maximum interest rate are consistent with our existing sterling notes. Should the bridge remain in place on 13 January 2021 then the bridge facility agreement provides for automatic conversion to a term loan, repayable in February 2025. 2 Converted using DKK/GBP of 0.1146 as of 14 January 2020. Includes Fitness World net cash balance of £7m as at 14 January 2020 and excludes finance lease liabilities assumed of £17m. 3 LTM Dec-19A PureGym Run-Rate Adj. EBITDA of £105m. 4 LTM Dec-19A Pro-forma Run-Rate Adj. EBITDA of £161m, including £4.5m of synergies.

Us Uses £m £m % EV Purchase Price2 345 90% Cash to Balance Sheet 21 6% Transaction Costs 15 4% To Total 38 381 10 100%

Pr Pro-fo form rma Ca Capita talisa sati tion

Fitness World Acquisition: Rationale & Business Overview PureGym: 2019 Results Highlights COVID-19 Update Group Financial Position: Liquidity & Leverage Outlook: Looking to the Future Appendix

In Investor Presentation 29 April 2020 50 50

Key: Guarantors £381m bridging loan that converts to a term loan in Jan 20211 Re Restricted Group £95m Super Senior Revolving Credit Facility £430m existing Senior Secured Notes Pr Principal Sh Shareholder Ma Management Sh Shareholders Gym Topco Limited Gym Midco Limited Gym Midco 2 Limited Gym Bidco Limited Pure Gym Limited Pinnacle Topco Limited Pinnacle Bidco plc (Issuer) Pinnacle Midco 2 Limited UK Subsidiaries US Subsidiaries Pinnacle Europe Holdings Limited Forward TopCo A/S Fitness World Group A/S Functional Supply A/S Fitness World A/S Basefit.ch AG Fitness Institute ApS Fitness World Poland Sp. Z.o.o. Indirect Holdings Issuer Acquisition Parameter 1 1 Acquisition funded through a €445m senior secured bridge facility. In general, the key terms of this debt and maximum interest rate are consistent with our existing sterling notes. Should the bridge remain in place on 13 January 2021 then the bridge facility agreement provides for automatic conversion to a term loan, repayable in February 2025.

Post acquisition Group structure

Co Corporate s structure a at 1 14 J January 2 2020

Fitness World Acquisition: Rationale & Business Overview PureGym: 2019 Results Highlights COVID-19 Update Group Financial Position: Liquidity & Leverage Outlook: Looking to the Future Appendix

In Investor Presentation 29 April 2020 51 51

Glossary

Te Term De Definition

Ad Adjusted EBITDA The profit or loss for a certain period before income tax expense, net finance cost, depreciation of property, plant and equipment and right of use assets, amortisation of intangible fixed assets, impairment of property, plant and equipment, profit/loss on disposal of property, plant and equipment, profit/loss on lease modifications, exceptional administrative expenses, and other extraordinary items, after adding back Pre-Opening Costs, share based payment charges and the Cash Rent Adjustment. Ad Adjusted EBITDA A Marg rgin Adjusted EBITDA for that period divided by revenue for that period. Av Avera rage Number r of f Members rs The average of the number of members as at the beginning of the first month and the end of every month in that period. Av Avera rage Continuous Members rship Te Tenure The average monthly tenure of all active and paying members, including members who have frozen their membership, as of a given point in time. This includes previous memberships where the gap in membership was 30 days or less but excludes the period(s) of non-membership. Av Avera rage Initial Capital Investment fo for r Mature re Gyms The Initial Capital Investment for all Mature Gyms for a certain period divided by the number of Mature Gyms in that period. Av Avera rage Gym ROCE Gym Site Adjusted EBITDA for the relevant portfolio of gyms for that period divided by the Initial Capital Investment attributable to that portfolio of gyms. Av Avera rage Mature re Gym Ad Adjusted EBI EBITDA Mature Gym Adjusted EBITDA for a certain period divided by the revenue attributable to Mature Gyms for that period. Av Avera rage Mature re Gym Ad Adjusted EBI EBITDA Margin Mature Gym Adjusted EBITDA for a certain period divided by the revenue attributable to Mature Gyms for that period. Av Avera rage Mature re Gym ROCE Mature Gym Adjusted EBITDA for a certain portfolio of gyms for a certain period divided by the Initial Capital Investment attributable to that portfolio of gyms. Av Avera rage Revenue Per r Member r Per r Mo Month Revenue for that period divided by the number of months in that period and further divided by the average number of members during that period. The average number of members during that period is calculated as the average of the number of members as of the beginning of the first month and the end of every month in that period. Ba Base sefit Refers to Basefit.ch AG, the brand that Fitness World operates under in Switzerland.

Fitness World Acquisition: Rationale & Business Overview PureGym: 2019 Results Highlights COVID-19 Update Group Financial Position: Liquidity & Leverage Outlook: Looking to the Future Appendix

In Investor Presentation 29 April 2020 52 52

Glossary

Te Term De Definition

Ca Cash Rent Adjustment From January 1, 2019, as the deduction of the cash rent payable during the period which otherwise was not reflected in EBITDA (as reported on an IFRS16 basis). Pre January 1, 2019, under IAS17, the total rent payable over the life of the lease is spread over the lease term and charged to the income statement on a straight-line basis in arriving at EBITDA. As we typically receive a rent free period of a year or more as an incentive from developers or landlords to lease space in their buildings this results in rent charged to EBITDA being greater than the cash outlay in the early years of the lease term and less than the cash outlay in the later years of the lease term. The Cash Rent Adjustment adds back any non-cash element of the rent expensed in the period during these early years (less any amounts already added back as a Pre-Opening Cost) and deducts any shortfall in rent expense in the later years to reflect the actual cash outlay due for that period under our lease arrangements. Management believes that adjusting EBITDA to reflect cash rent is a better reflection of our actual earnings. Co Combined Group Refers to Pure Gym and Fitness World. Co Combined Group EBITDA EBITDA of Pure Gym plus EBITDA of Fitness World Co Combined Group Adjusted EBITDA Adjusted EBITDA of Pure Gym plus Adjusted EBITDA of Fitness World. Co Combined Group Adjusted EBITDA Ma Margin Combined Group Adjusted EBITDA for a certain period divided by the Combined Group Revenue. Co Combined Group Gym Site Adjusted EBI EBITDA Margin Gym Site Adjusted EBITDA of Pure Gym plus Gym Site Adjusted EBITDA of Fitness World. Co Combined Group Revenue Revenue of Pure Gym plus revenue of Fitness World. Co Combined Group Run Rate Adjusted EBI EBITDA Margin Run-Rate Adjusted EBITDA of Pure Gym plus Run-Rate Adjusted EBITDA of Fitness World. Co Combined Group Operating Ca Cash Fl Flow Operating Cash Flow of Pure Gym plus Operating Cash Flow of Fitness World. EBI EBITDA The profit or loss for a certain period before income tax expense, net finance cost, depreciation of property, plant and equipment and right of use assets, amortisation of intangible fixed assets, impairment of property, plant and equipment, profit/loss on disposal of property, plant and equipment, profit/loss on lease modifications and exceptional administrative expenses.

Fitness World Acquisition: Rationale & Business Overview PureGym: 2019 Results Highlights COVID-19 Update Group Financial Position: Liquidity & Leverage Outlook: Looking to the Future Appendix

In Investor Presentation 29 April 2020 53 53

Te Term De Definition

Ex Expansi sionary Capital Ex Expenditure The Initial Capital Investment and the capital costs of expanding gym sites incurred in that period. Fi Fitness World or Fi Fitness World Gr Group Rrefers to Forward TopCo A/S and its subsidiaries. Gy Gym Cohorts Groups of Pure Gym or Fitness World clubs, as applicable, that opened during a specified period. Gy Gym Site Adjusted EBITDA Adjusted EBITDA for that period, excluding Head Office Costs. Gy Gym Site Adjusted EBITDA Margin Gym Site Adjusted EBITDA divided by revenue for that period. Head Head Office ce Cos

• sts

all non-gym specific costs, other than depreciation and amortisation, related to the operation of head office functions in a given period. In Initial Capital In Investment The capital cost of bringing a new gym into operation or extending a gym, including expenditures on site fit out, fixtures, fittings and equipment and excluding the cost of any right of use property assets, ongoing maintenance and refurbishment capex. Lar Large ge Box

• x For
• rmat

at (LB LBF Large Box Format (LBF) gyms are gyms that are typically over 12,000 square feet in size. Ma Maintenance and corporate capital ex expendi penditur ures es The total capital expenditure incurred in a period less Expansionary Capital Expenditure incurred in that period. Ma Mature Gym Adjusted EBITDA Profit for a certain period before income tax expense, net finance cost, depreciation of property, plant and equipment and right of use assets, amortisation of intangible fixed assets, impairment of property, plant and equipment, profit/loss on disposal of property, plant and equipment, profit/loss on lease modifications and exceptional administrative expenses for Mature Gyms, after adding back the Cash Rent Adjustment and Pre-Opening Costs for Mature Gyms and after adding back Head Office Costs. Ma Mature Gym EBITDA profit for a certain period before income tax expense, net finance cost, depreciation of property, plant and equipment and right of use assets, amortisation of intangible fixed assets, impairment of property, plant and equipment, profit/loss on disposal of property, plant and equipment, profit/loss on lease modifications, exceptional administrative expenses and Head Office Costs for Mature Gyms. Mature Gym EBITDA does not include the Cash Rent Adjustment or adjustments for Pre-Opening Costs or

• ther extraordinary items that were added back to Adjusted EBITDA and Gym Site Adjusted EBITDA.

Ma Mature Gym The gyms that have been open as Pure Gyms for 24 months or more or as Fitness World clubs open as for 24 months or more as of the end of the relevant reporting period.

Glossary

Fitness World Acquisition: Rationale & Business Overview PureGym: 2019 Results Highlights COVID-19 Update Group Financial Position: Liquidity & Leverage Outlook: Looking to the Future Appendix

In Investor Presentation 29 April 2020 54 54

Te Term De Definition

Net Net Debt ebt Total indebtedness of the group including finance lease liabilities as reported under IAS17 (excluding property lease liabilities recognised under IFRS 16) less cash and cash equivalents. New New Gyms The gyms that have been open as Pure Gyms for less than 24 months or Fitness World clubs for less than 24 months as of the end of the relevant reporting period. Num Number ber of

• f Gyms

The total number of gyms that are open and trading as of the specified date or the end date of the relevant period. Op Operating Cash Flow Adjusted EBITDA plus Working Capital Cash Flow and less Maintenance and Corporate Capital Expenditures for that period. Op Operating Cash Flow Conversion The Operating Cash Flow for that period divided by Adjusted EBITDA for that period. Pr Pre-Op Opening Costs The total of all gym site operating costs incurred during the pre-opening periods of gyms in that period. Pre-Opening Costs primarily consist of staff, marketing and also rent expenses when reporting under IAS17. RO ROCE Adjusted EBITDA divided by Initial Capital Investment and refers to return on capital employed. Ru Run-Ra Rate Adjusted The adjustment made to those gyms which are less than three years old at the end of the reporting period. These adjustments replace the Adjusted EBITDA earned by these sites in the last twelve month period with the projected Adjusted EBITDA for their third year of operation. Se Senio ior r Se Secure red Net Debt The total senior secured indebtedness of the group (excluding finance lease liabilities as reported under IAS17), less cash and cash equivalents. Sm Small ll Box Form rmat (SB SBF) Small Box Format (SBF) gyms are gyms that are typically 6,000-9,000 square feet in size. So Soho Gyms The trading name of Ovalhouse Limited. Wo Working Capital Cash Flow Cash movements in working capital less the Cash Rent Adjustment, where this is applicable under IAS17

Glossary

Fitness World Acquisition: Rationale & Business Overview PureGym: 2019 Results Highlights COVID-19 Update Group Financial Position: Liquidity & Leverage Outlook: Looking to the Future Appendix

Investor Contact Details

PureGym Town Centre House Merrion Centre Leeds LS2 8LY Website: corporate.puregym.com Email: ir@puregym.com