LEEJAM Sports Company
“More than just a gym”
From its humble beginnings, Leejam has continued in its path of evolution, fast becoming the region’s largest operator of sports and fitness centres. Under the tutelage of the Company’s vibrant, dynamic and energetic core of key management personnel, with extensive experience in the industry, Leejam has been able to further diversify its offerings to create a so-called “One Stop Fitness Shop”, offering state-of-the-art facilities for all users, leading apparel lines and locations that people want to spend time in, in all corners of the Country. In addition, the leadership team pride themselves in knowing that the evolution of the brand under their guidance aligns directly with Saudi Arabia’s Vision 2030; to get people exercising daily and to lead a healthier life.
2020 KEY HIGHLIGHTS
Financial & Operational
Leejam is committed to continually evaluating and improving performance. The carefully selected Key Performance Indicators, both financial and operational, are used to measure the Company’s performance over time.
Total Number of Gyms
Total Number of Members
MALE SEGMENT EBITDA
FEMALE SEGMENT EBITDA
Chairman’s StatementAli Hamad Al-Saqri
Getting Fit Through Challenges
It is with great pleasure that I present our Annual Report for 2020, a year of global challenges; one that we not only survived, but successfully overcame, which is testament to the strength of our business.
In light of an unprecedented global pandemic that had, and still has, a wide negative impact on the global economy and on lifestyles around the world, the year 2020 marked an unexpected turn of events that affected us all. The effects of this pandemic meant that international cooperation was required in order to face the difficult repercussions.
The collaboration and great efforts were pioneered by the leadership of our beloved Kingdom in its capacity as leaders of G20. With all its pride, our beloved Country has led this global effort with the aim of focusing all its energies to eradicate the virus and achieve the desired recovery of the economy. These efforts coincided with the enforcement of precautionary and preventive measures, whilst simultaneously trying to stimulate the economy and support the private sector to overcome these repercussions and preserve jobs, increase gains and achievements.
Perhaps what is most satisfying and inspiring is the pride I take in knowing the pioneering role that Leejam plays in its provision of services to families across the Kingdom. It is what science has taught us, that exercise is the first line of defence against illness, and that physical fitness is the key factor in strengthening the body’s immune system and in raising morale in order to enhance one’s own ability to control and reduce stress, as well as fight insomnia.
This, in turn, gives us the ability to cope with viral outbreaks, whilst continuing to enjoy good physical and psychological health. Furthermore, it allows us to continue being productive at work, continue innovating and to be in a state of contentment and happiness. These facts give us tremendous momentum that motivate us to continue providing the highest levels of performance and services and to achieve all the aspirations and goals of our dear members, by helping to surpass all the difficulties and challenges we may face.
By divulging deeper into Leejam’s vision, mission and values, we have been keen, since the establishment of the Company, to encourage people of all age groups to exercise regularly and to increase fitness levels through our modern, state-of-the-art clubs in various parts of the Kingdom, as well as in the neighbouring United Arab Emirates. Looking towards the future, with significant expansion plans in place, Leejam is focusing on strengthening its budget offering ‘Fitness Time Xpress’ to improve market penetration and reach places which were not previously accessible. The Company is also working to significantly improve member experience with the goal of making the centres not only the fitness club of choice, but also a venue where members can interact with one another in a friendly and welcoming environment to promote healthy living and quality of life. The motivation behind this quest for healthy living lies in our desire to support the Kingdom in the realisation of its Vision 2030. Another key focus area of Leejam is Digitalisation and providing members with a connected gym experience.
Despite our very strong position, it was inevitable that our business would be affected by the global pandemic, especially during periods of lockdown, where we were unable to operate. As such, we immediately took appropriate measures to minimise the impact. First and foremost, to protect the lives and wellbeing of staff, the implementation of virtual, remote working wherever possible was put in place, which was actually implemented before Government instruction, whilst constantly planning for a safe way to return to work. We worked relentlessly to reduce costs and secure the future of the Company, during a period where revenues were reduced to zero. Nonetheless, we have managed to come out stronger with Revenue of 659.6 million Saudi Riyals and with 265,000 members, which represents a total market share of 28%.
In conclusion, my sincere gratitude and appreciation goes out to our shareholders, members, partners and government agencies for all of their continued support during a difficult year.
More importantly, I must acknowledge the dedication, strength and resilience that all of our employees have shown. It is in tough times where people must come together, and I am immensely proud of the efforts that everyone has shown. It is because of their hard work and perseverance that we were able to overcome all challenges that were faced, for which I am extremely grateful. It is as the saying goes, “teamwork makes the dream work”
Finally, we ask Allah almighty to preserve our wise leadership, may God protect them, and to perpetuate this generous nation and bestow upon all citizens and residents security, safety, progress and prosperity.
Covid-19, a driving force
With a multitude of challenges, coupled with increasing uncertainty and anticipation of global developments, the global Covid-19 pandemic has had far reaching consequences and repercussions.
We have collectively pooled our efforts at Leejam to transform these negative repercussions into a driving force, that has only pushed us to be more determined in enhancing our existing offerings and continuing our path of evolution and diversification. We were confident, and remain so, of a return to normal life, coinciding with the release of a vaccine against Covid-19 being made public to both citizens and residents of Saudi Arabia.
Perseverance is the key to success
Strength in Depth
Continuing the trend
- Diligent and risk-based decision making
- Customer centricity
- Innovative and diverse range of products and services tailored to meet customer needs
- Focus on quality and efficiency
- Long term lease of land and construction of state-of-the-art and technologically superior facilities
- High value membership
- Strategic locations
- Certified trainers and experts
- Brands catering to various KSA demographics
- Internationally certified training programs Provision of opportunities for women.
- Customer Service
- Operational Efficiencies
- Represented Brands
Services and Features
- Personal Training
- CrossFit Style
- High Intensity Interval
- Training (HIIT)
- Extreme Boxing
- Half Olympic Sized Pools
- Soccer, Basketball and Volleyball Courts
- Business centres
Leejam’s Value Creation
- Membership growth, retention and loyalty
- Sustainable returns for shareholders
- Steering society towards a healthy lifestyle
- Consistency in increasing market share.
To lead by example
- Portray the core values of Leejam in all Company activities starting with leadership and cascaded down to the entire organization.
- Coaching theme must be embraced for direct reports and mentoring the great talents in all teams to create a pool of outperformer.
- Conduct a well-planned meetings internally, scheduled one-on-one and team meetings regularly.
- Project the right image for the Company throughout the Company and centres. Leadership image will reflect on Company’s image.
To manage business performance
- Ensure all Financial KPIs are cascaded and distributed to departmental teams. Monitor approved KPIs on a monthly basis and immediate action plan for any deviation is required.
- Ensure all other KPIs (customers, regulatory, processes) are also cascaded down to all teams.
- As for Strategic projects and expansions, stakeholders must be accountable and responsible for execution within their allocated timeframes.
To ensure structure and process
Driving improvement and enhancements across the organization. Without limitations, to set the strategy but continually scan the market locally and internationally, to adopt what is beneficial for future growth.
Focus on evolution, diversification, innovation and digitalisation.
Holding Strong in the Face of Adversity
2020 proved to be a year of challenges, which tested our resolve and strength in depth. A total shutdown period of a little over 3 months meant we went back to the drawing board and implemented our rigorous busines continuity plan, including stringent cost cutting measures, ensuring the financial impact of the Covid-19 pandemic was minimised.
Because of the global Covid-19 pandemic, the figures for 2020 were down from the previous year. Even with a total shutdown of all centres for a little over 3 months, total revenue was down 30% to SAR 660 million from the SAR 945 million in 2019. Gross profit was also down for the year, with Leejam ending 2020 with SAR 129 million, a reduction of 64%. These are both as a result of the total shutdown of our revenue streams.
The effects were elongated because of user sentiment both before and after the lockdown, and it took a while for our members to be comfortable returning to a gym. There was a decrease in membership income of SAR 264 million owing to the shutdown, a decrease in personal training income by SAR 18 million due to the suspension of all activities and the directives to reduce availability of sessions post lockdown in line with Government directives, along with a decrease in rental income of SAR 3.4 million due to the termination of rental contracts and the provision of rent concessions to lessees during the year.
However, with the overall lower results from the previous year came some incredibly positive news which we can all be proud of, and which will give us a platform to build upon for 2021. In line with ensuring the financial strength of Leejam, we have built up cash reserves of SAR 200 million, as per the guidance of our Board of Directors, who gave us their unwavering support throughout this tough period. We manged to significantly reduce costs, whilst increasing our standings in terms of the number of fitness centres. We were the first gym to open, within 12 hours of the Government announcement, and we ensured the highest hygiene levels across all of our facilities. This meant our members felt safe and comfortable returning, which is evident in footfall towards the end of 2020, which reached 90% of pre-covid attendance. In addition, we signed agreements with Technogym and Squatwolf that will see our product offering evolve and diversify further in the coming years.
Through the continuous and ongoing support of our esteemed Board of Directors, we were able to integrate various mechanisms to see us through this difficult period, with minimal losses in real terms. Revenue for 2020 reached 659.6 Million Saudi Riyals.
These incredibly positive figures took into consideration rationalisation of costs and an overall slowdown in membership sales, attributable to the nationwide lockdown which forced the closure of all fitness centres. With all this in mind, we persevered. We applied an “Attack is the best form of defence” approach to maintain our competitive edge. Our extensive planning focussed on delivering our three year strategy ahead of time and how we could incentivise users to return post-lockdown.
We successfully negotiated new partnerships, to take maximum advantage of diversifying our line and maximising the benefits available through modern technology and we successfully prototyped our first smart gyms. We have continued diversifying the types of centres on offer with the launch of Fitness Time Xpress, aimed at lower budgets, supporting our vision and mission in steering society towards a healthy lifestyle and getting people to exercise daily. These developments, along with further digitalisation and the enhancement of our customer experience will lay the foundations for future growth and development.
Summary of statement of income (SAR)
Summary of balance sheet (SAR)
Geographical analysis of the company's total revenues (SAR)
|Headquarters and Central Province||380,542,778||371,062,299||395,494,485||461,880,348||311,265,095|
|United Arab Emirates||9,938,480||13,646,252||17,531,020||18,787,902||13,361,000|
Long Term (SAR)
|Lender name||Principal amount||Loan term||Repaid amount within the year||Remaining Amount||Total debt of company and its subsidiaries|
|National Commercial Bank||34,418,822||5 Years||18,689,994||15,728,828.09||487,586,916|
|Banque Saudi fransi||276,562,500||5 Years||41,562,500||235,000,000.00|
|Saudi British Bank||271,242,166||5 Years||59,384,078||211,858,088.04|
|Bank AlJazira||25,000,000||5 Years||-||25,000,000.00|
|Subsidiary name||Capital||Company's stake||Main activity||Country / operations headquarters||Country / incorporation address|
|Fitness Time Trading Co. Limited||50,000||95%||Inactive (no activity)||-||Kingdom of Saudi Arabia|
Details of shares and debt instruments of each subsidiary
|Subsidiary name||Incorporation country||Direct stake (%)||Indirect stake (%)||Remaining ownership stake|
|Fitness Time Trading||Kingdom of Saudi Arabia||95%||-||5%|