© 2006 les mills international limited click to edit master text styles second level third level...

© 2006 Les Mills International Limited© 2006 Les Mills International Limited

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© Les Mills International 2004 1



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TAKE YOUR GROUP FITNESS

BUSINESS TO THE MAX



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© Les Mills International Ltd Group Fitness Management 2007

TODAY’S TOPICS The Future of the US Health Club Market

The Future of Group Fitness

The Size of the Group Fitness prize

Introducing Les Mills International

Group Fitness powered by Les Mills

The four drivers of Group Fitness

1) LES MILLS™ Group Fit Formulas

2) LES MILLS™ Group Fitness Training

3) LES MILLS™ Group Fitness Management

4) LES MILLS™ Group Fitness Marketing materials

Next steps



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THE FUTURE OFTHE US HEALTH CLUB

MARKET



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OVER 20,000 HEALTH CLUBS OFFERING GROUP FITNESSAND THIS TREND IS FORECAST TO GROW

19,700

20,315

20,906

21,533

22,179

22,845

2003 2004 2005 2006 2007 2008

Total Health Clubs Offering Group Fitness US Market (2003 – 2008)

Source: IHRSA Trend report, IHRSA member census



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HEALTH CLUB MEMBERSHIP IS FORECAST TO INCREASE

30.632.8 33.8

37.839.5

41.242.8

44.5 46.1

2000 2001 2002 2003 2004 2005 2006 2007 2008

Total Health Clubs Membership in US Market (m) Compound Annual Growth

Rate of 4%

Source: IHRSA Trend report



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GROUP FITNESS PARTICIPATION IS FORECAST TO INCREASE

Source: IHRSA Trend report

10.010.6 10.9 11.3

11.8 12.2 12.7

2002 2003 2004 2005 2006 2007 2008

Total Participation in Group Fitness at Clubs (m) Annual Growth Rate of 3%



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THE FUTURE OFGROUP FITNESS



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FUTURE MARKET FOR GROUP FITNESS Experience and transformation economies are booming (1)

Wellness spending in the US alone will surpass one trillion dollars by 2010 (2)

Health clubs are at the sharp end of the experience economy - gym attendance is becoming the biggest sport in the world (3)

(1) Pines and Gilmour, The Experience Economy 1999(2) Paul Zane Pilzner; The Wellness Revolution How to make a fortune in the Next Triilion Dollor Industry

2002(3) Phillip Mills; 2004



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(4) Phillip Mills; 2005(5) James J. Annesi; Effects of Minimal Group Promotion on Cohesion and Exercise Adherence 1999(6) IHRSA Retention Report 2004

FUTURE MARKET FOR GROUP FITNESS Group Fitness is the vanguard of the fitness industry and has huge

potential as a form of entertainment (4)

“90% of all exercisers report that they would prefer to workout in a group.” (5)

“Increase in group fitness participation is a key indicator of club growth and profitability” (6)

Group Fitness is at the sharp end of the experience economy!

CREATING MORE ENTERTAININGEXERCISE ENVIRONMENTSExample: Evolution of the exercycle

1980 Old fashioned stationary bike

1985 Computerized bike

1990 Cardio theater

1995 Spinning class

1999 RPM™



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THE SIZE OF THEGROUP FITNESS PRIZE



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CALCULATE CURRENT OCCUPANCY

Calculate total square footage of your Group Fitness studio(s)? _______

Divide this number by 40 (1) _______

This number represents your Maximum Class Capacity (MCC) _______

How many classes are at:

75% MCC, or _______

Between 30% - 75% MCC, or _______

Less than 30% MCC _______

Ask yourself these questions:

How much of the prize am I giving up with my present programming?

How much of the prize could I gain with better programming?

WORKBOOK

SHEET 1

(1) Les Mills International recommend circa 40 square feet per person

THE SIZE OF THE PRIZE



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THE SIZE OF THE PRIZEEXAMPLE OF SINGLE STUDIO WITH CAPACITY OF 30

Current weekly attendance = 500

Target weekly attendance = 1000

500 extra attendances ÷ 1.75 * = 285 new members

285 x (cost of membership= $142,500 $500 annualised)

Achieve 75% of income = $106,875



* Average member attendance per week - IHRSA 2004



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THE SIZE OF THE PRIZEEXAMPLE OF SINGLE STUDIO WITH CAPACITY OF 30

How much would you spend to achieve $142,500 extra member revenue?

Increased GFM wages and incentives $6,000 Increased instructor wages and incentives $8,000 Studio improvements $7,500 Additional marketing costs $8,000 Licence fees $2,500 Increased training costs $2,500

TOTAL $34,750

Return on investment (on $142,500) 410%

Return on investment (on 50% of income - $71,250) 205%



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THE SIZE OF THE PRIZEADDITIONAL FACTORS TO CONSIDER IF YOU HAVE VERY BUSY

STUDIOS

Independent research confirms that members at Les Mills licensees visit their facilities on average 2.9 times per week*

At Les Mills Auckland, busy Group Fitness studios provided a number of profitable benefits

Improved retention

Ability to increase membership prices significantly over time

New members due to the reputation of Group Fitness

Ultimately, Les Mills Auckland chose to invest in increased Group Fitness space to maximize attendance levels while accessing all the other benefits of group exercise as a competitive advantage

* AC Nielsen Survey, 2006



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THE SIZE OF THE PRIZE FOR YOUR CLUB

Add up your weekly class attendances

TOTAL ____________

What could this be if your instructors were delivering world class, life-changing experiences every time?

POTENTIAL TOTAL ____________

Take the difference between these two numbers, divide it by 1.75 (IHRSA average member weekly attendance) and multiply it by your annual membership rate

POTENTIAL INCOME GAIN $ ____________

Assume a 50% success rate of the income gain to be conservative

50% POTENTIAL INCOME GAIN $ ____________

CALCULATE REVENUE

WORKBOOK

SHEET 2

MANY CLUBS JUST WANT TOBREAK EVEN IN GROUP FITNESS

WHAT IF YOU WERE THE BEST IN:

Your suburb?

Your city?

Your region?

Your state?

WHAT WOULD IT DO FOR:

Your break-even?

Your retention?

Your sales?

Your profit?

RECOGNIZE THE BUSINESSPOTENTIAL OF GROUP FITNESS

• Club of 1,470 members• Annual GF re-launch • 140 new members • USD 8,250 investment• USD 85,500 income • >10 times payback • 4 hour evening concert • Theatrical event • 400 attendees • 200 non-member

guests • 70% conversion rate • Cross-club teamwork



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GROUP FITNESS POWERED

BY LES MILLS



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INTRODUCING LES MILLS INTERNATIONAL

Licensed to over 11,000 clubs in more than 70 countries

Occupying 20% of world’s health clubs’ Group Fitness timetables

Servicing the world with a unique global agency network

60,000 Les Mills certified elite fitness instructors

In excess of 4 million consumers per week doing Les Mills classes

Servicing over1,200 clubs in USA



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LES MILLS AUCKLAND – CLUB BASEDGROUP FITNESS MODEL FOR THE WORLD

Les Mills World of Fitness, Auckland, New Zealand

11,000 members - Membership average US$80 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

7,000 + Group Fitness visits per week



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Source Conversa Global CVM Study 2004

Notes: (1) Sample size n = 644 Countries n = 10

INTERNATIONAL RESEARCH REVEALS STRENGTH OF THE LES MILLS™ SYSTEM 38% of fitness clubs surveyed believed there were no competitors

for LES MILLS™ programs

Ratings by Les Mills licensees were on average 25% higher than those given to Les Mills competitors

Key reasons why clubs purchased LES MILLS™ Group Fit Formulas were:

recognition of the contribution to growing and retaining membership

the quality of the programs

demand from club customers



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THE FOUR DRIVERSOF GROUP FITNESS



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THE FOUR DRIVERS OF GROUP FITNESSWORKING HARD TOGETHER

GROUP FITNESS MARKETING MATERIALS

GROUP FIT FORMULAS

GROUP FITNESS TRAINING

GROUP FITNESS MANAGEMENT SYSTEM



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Program development means identifying the the most popular activities people want

Functional strength training

Mind body

Martial fitness

Step training

Indoor cycling

Sports conditioning / HiLo

Dance

WHAT DO PEOPLE WANT?MODEL FOR PROGRAM DEVELOPMENT

Create easy-to-follow, results driven, enjoyable choreography

Use current top 40 music with maximum appeal to the widest market

Base your program development on commercial reality. Be cautious of short term fads

DRIVER ONE



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WHAT DO PEOPLE WANT FROM GROUP FITNESS?

Identify the largest market categories

Using pre-choreography produced by world-leading instructors

Test and refine the programs in live club situations

Listen to thousands of songs each quarter for music selection

Always base our programs on a commercial program formula

Programs developed to meet consumer needs based on independent market research

EXAMPLE of Sustainable Group Fit Formulas

DRIVER ONE



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THE ESSENCE OF THE LES MILLS™ GROUP FIT FORMULAS

The real weights workout where I feel strong and get challenged

The martial arts workout where I am unleashed

The yoga, tai chi, pilates workout where I feel strong and centre, long and strong

The dance workout where I get high on the feeling of dance

Ride the rhythm for the athlete within

The lively step workout where I get lifted

The cardio conditioning workout inspired by sports training

The low-impact workout that lets you choose just how hard you

work DRIVER ONE



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DRIVER ONE

WHAT GROUP FIT FORMULAS DO CLUBS WANTTHE GLOBAL MIX - JUNE 07

Across its range of 8 GF formulas , Les Mills has licensed approx. 37,000 programs to over 11,000 clubs

BODYPUMP™

BODYCOMBAT ™

BODYFLOW®

RPM ™

BODYJAM ™

BODYATTACK ™

BODYSTEP ™

BODYVIVE ™

9,952



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DRIVER ONE

More than 90% visit their clubs at least twice a week to specifically take part in Les Mills’ classes(1)

Nearly 40% visit at least 4 times a week to take part (2)

Average of at least 2.9 visits a week compared to IHRSA estimate of 1.75 visits (3)

75% of members surveyed said they might change clubs if they stopped offering Les Mills programs (4)

Over 90% said they would definitely recommend Les Mills’ programs to their friends (5)

(1 - 5) AC Nielsen Survey 2006

Notes: Sample size n = 1002 Country: USA

INDEPENDENT RESEARCH REVEALS THE STRENGTH OF THE LES MILLS™ SYSTEM



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GROUP FITNESS TRAINING



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Choreography

Build on instructor strengths to create stars

Technique“Physical Execution”

Coaching“Teaching Skills”

Fitness magic“Theatre Skills”

Connecting“Communication”

FIVE KEY ELEMENTS OF TEACHING

DRIVER TWO



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A QUALITY GROUP FITNESSTRAINING PROCESS

Module training

Certification

Quarterly workshops

Advanced instructor training

Technique intensives

Quality assessments

Team training for quarterly launch

Individual tuition

Distributor driven

Club driven

DRIVER TWO



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.

*Recruitment needs to reflect the essence of each program

WORKING SIDE BY SIDE TO CERTIFY INSTRUCTORS

1. Group Fitness Manager selects instructors for Module*

2. Group Fitness Manager prepares instructors for Module

3. Instructors attend LES MILLS™ Module training for 2 or 3 days

4. Group Fitness Manager coaches instructors to be class ready

5. Group Fitness Manager ensures instructors submit videos

6. Les Mills assesses instructor videos up to 12 weeks post Module

7. CERTIFICATION

DRIVER TWO



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TRAINING NEEDS WORLD CLASSGROUP FITNESS RESOURCES

DRIVER TWO



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GLOBAL INSTRUCTOR RESEARCH ON

LES MILLS™ TRAINING SYSTEMS Key findings Score

Overall score across all instructors 8.2

Les Mills instructor training and certification 8.3

Importance of being part of a global family 8.8

Percentage of instructors who viewed Les Mills as having no competition 38 %

Percentage rating for importance of being part of a world wide movement to improve peoples' health and fitness 70 %


Notes: (1) Sample size n = 4,218; (2) Sample size n = 928DRIVER TWO



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GLOBAL INSTRUCTOR RESEARCH ON

LES MILLS™ TRAINING SYSTEMS

Instructors place a high value on the LES MILLS™ Training System in each region, while gaining substantial inspiration and

reward from being part of a global movement to improve people’s health and

fitness.


Notes: (1) Sample size n = 4,218; (2) Sample size n = 928 DRIVER TWO



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GROUP FITNESS MANAGEMENT SYSTEM



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THE GROUP FITNESS MANAGEMENT SYSTEM IS BUILT AROUND 8 KEY ELEMENTS1. Create a Group Fitness scorecard

2. Maximize your Group Fitness timetable

3. Recruit world class Group Fitness instructors (and keep them!)

4. Organize great Group Fitness instructor training

5. Develop the best Group Fitness studio you can afford

6. Create a Group Fitness marketing plan

7. Plan for Group Fitness success

8. Appoint, or be, a world class Group Fitness Manager

DRIVER THREE



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GROUP FITNESS MANAGEMENT SYSTEM TOOLS TO DRIVE BUSINESS SUCCESS 1

An interactive workshops about the 8 Key Elements of Group Fitness Management where attendees learn about:

The importance of measuring attendances

Using attendance data to create successful timetabling

How to find world class instructors

What training is required to create world class instructors

The impact of studio design on member experience

Innovative marketing strategies to build attendances

Key factors to consider when creating a plan for success

What it takes to be a truly great Group Fitness Manager

DRIVER THREE



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Club Group Fitness Coaches in each agency

Most comprehensive online GF Management guide available e.g.

Instructor interview guide and recruitment campaigns

Instructor assessment and self assessment forms

Studio design guide and checklists

Launch and re-launch manuals

Budget templates

GF Management interview guide and self assessment forms

Online timetable creator

Group Fitness case study database - Group Fit P.R.O.F.I.T.

Online GF Managers forum

GROUP FITNESS MANAGEMENT SYSTEM TOOLS TO DRIVE BUSINESS SUCCESS 2

DRIVER THREE



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LES MILLS™ Group Fitness recruitment campaigns

GROUP FITNESS INSTRUCTOR RECRUITMENT

DRIVER THREE



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Simplified framework to assess the 5 key elements

Easy to understand instructor priorities

Powerful tool to support ongoing, in-house training

Building towards mastery

GROUP FITNESS ASSESSMENT TOOL

DRIVER THREE



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GROUP FITNESS TIMETABLE CREATOR

DRIVER THREE



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GROUP FITNESS LAUNCH AND RE-LAUNCH MANUALS

DRIVER THREE

ONLINE CASE STUDY DATABASE

DRIVER THREE



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DRIVER THREE

BEST PRACTICE CASE STUDY: LEVITE JCC, BIRMINGHAM, ALABAMA

• Facility of 2,250 members• Only 8% capacity usage in GF 18

months ago • Quickly reduced Instructor team from

50–20 people • Average attendance in class was 4-8

people • Launched Les Mills programs in March

2005 • Successful freestyle classes maintained • Today 88% capacity usage in Les Mills

classes • 82% retention • 59% of total attendances are from GF



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BEST PRACTICE CASE STUDY: LEVITE JCC, BIRMINGHAM, ALABAMA

DRIVER THREE

• Only one studio available • GF Manager negotiated use of other

space for classes • Deliver 65 land classes per week • 45 classes in the studio, 20 in other

facility venues • Premium priced in the area • Very high quality in Instructor team • Instructor team to reach 40 people• Minimum of 20% male attendance in

Les Mills classes • Rank in the top 10 out of 250 JCCs in

USA



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GROUP FITNESS MARKETING MATERIALS



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E-CLUB: YOUR ONLINE MARKETING TEAM

DRIVER FOUR

REAP THE BENEFITS OF MARKETING BRANDS

© 2006 Les Mills International Limited

Abs & Butt

OR

OR

WHAT WOULD YOU RATHER MARKET?

DRIVER FOUR

http://www.dogpile.com/info.dogpl/clickit/search?r_aid=8C6C760B535A42D3A518F32D24E76460&r_eop=11&r_sacop=11&r_spf=0&r_cop=main-title&r_snpp=11&r_spp=3&qqn=Ys%3B-Ys%3A%3A&r_coid=372380&rawto=http://www.nikeshoesbusiness.com/nike-shox/nike-shox-Ride-1.htm

http://www.dogpile.com/info.dogpl/clickit/search?r_aid=8C6C760B535A42D3A518F32D24E76460&r_eop=15&r_sacop=15&r_spf=0&r_cop=main-title&r_snpp=15&r_spp=3&qqn=f3%27RRGpJ&r_coid=372380&rawto=http://www.nikeshoesbusiness.com/nike-shox/nike-shox-Ride-1.htm

1. LES MILLS™ Group Fit Formulas

2. Quarterly event campaigns

3. Outdoor campaigns

4. Imagination campaign

5. Black and white series

6. Fantasy campaign

7. Life changing campaign

8. What’s in it for me campaign

9. Shape your future campaign

10. Tree campaign

E-CLUB: YOUR ONLINE MARKETING TEAM

DRIVER FOUR



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HOW DO I SIGN UP AS A LES MILLS LICENSEE? Les Mills’ sales team contacts club

Club signs license agreement

Training of instructors undertaken

Instructors sign instructor agreement

Instructors enroll in autoship

Instructors submit video for assessment & final certification

Les Mills regional account managers actively assist the club in launching the new programs to its members

Licensee club re-launches the program every quarter to coincide with Les Mills new quarterly release



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NEXT STEPS FOR CURRENT LICENSEESTO LAUNCH MORE PROGRAMS

1. Review Group Fitness scores

2. Contact regional Les Mills distributor

3. Select two programs to launch in the next 3 - 6 months

4. Update license agreement

5. Book instructor training

6. Rebook Group Fitness Management training



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Research shows that licensees enjoyed greater business benefits when they schedule more than 50% of the timetable with LES MILLS™ programs and offer 5 or more LES MILLS™ programs


Notes: (1) Sample size n = 4,218; (2) Sample size n = 928

NEXT STEPS FOR CURRENT LICENSEESTO LAUNCH MORE PROGRAMS



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LES MILLS OFFERS UNPARALLELED DEPTH OF EXPERIENCE IN GROUP FITNESSLes Mills

Is the undisputed world leader in Group Fitness

Has over 25 years expertise in creating and perfecting its Group Fitness System, used in over 11,000 clubs world-wide

Spends millions of dollars annually to ensure its products are world class

Has a safety review process, comprising medical and fitness industry professionals who review each program before its release to the market

Is continually innovating to improve existing products and bring new products to the market



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MAKING YOUR DREAMS BECOME A REALITY

Where do you see yourself?

Ready to sign up

Interested but need more information

Thanks but no thanks – would like to try classes first

© 2005 Les Mills International Limited© 2005 Les Mills International Limited© 2006 Les Mills International Limited

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