Increase in Revenue reasons:

• Membership revenue increased by SR 24.8M attributable to new center openings during the current period (6 male and 4 female centers), growth in LFL (like-for-like) centers and ramping up of 22 non-LFL centers opened last year.

• Increase in Personal Training (PT) revenue by SR 7.5M due to higher number of PT centers contributing during the current quarter, partly offset by decrease in rental income by SR 0.2M due to non-renewal of certain real estate contracts.

Increase in Cost of Revenue reasons:

• Driven by higher number of operating centers in the current period and rising external costs, offset by;

• rent adjustment, due to application of new accounting standard for Leases – IFRS 16, where previously reported rent expense is recognized as part of depreciation of right-of-use assets and financial charges on lease liabilities effective from January 1, 2019,

• cost control initiatives and one-off refund of 2018 work permit fees (total SR 2.9M) received during the current quarter.

Advertising & marketing expenses were lower by SR 2.5M (42% lower than last year) due to lower expenditure (with higher focus on social media), lesser campaigns and completion of partnership agreement with FCB in June 2018.

General & administrative expenses were lower by SR 3.9M (21.6%), mainly due to lower staff cost, one-off refund of 2018 work permit fees and decrease in assets write-offs, partly offset by increase in employee’s work permit costs and professional fees during the current period.

Other income was higher by SR 0.3M mainly due to growth in rental income from internal advertising at centers.

Finance cost were higher by SR 9.6M (188%) mainly due to recording of interest expense of SR 8M on lease liabilities recognized under the new accounting standard for leases – IFRS 16, effective from January 1, 2019.

Increase in Revenue reasons:

• Membership revenue grew by SR 3.5M mainly due to the ramping up of 8 new center openings of first quarter in current year, non-LFL centers opened last year and growth in the LFL centers,

• partly offset by seasonal decrease in revenue including Personal Training (PT) revenue by SR 1.8M due to lower conductions during Ramadan & Eid holidays in the current quarter

Decrease in Cost of Revenue reasons:

• Mainly driven by lower repair works, cost control initiatives and one-off refund of 2018 work permit fees (total SR 2.9M) received during the current quarter.

Advertising & marketing expenses were lower by SR 0.1M (3.7%) due to lower campaigns and media spend.

General & administrative expenses were lower by SR 5.9M (29.1%) mainly due to lower staff cost, refund of 2018 work permit fees, and decrease in IT expenses (communication cost, user licenses, shifting of IT projects to H2 etc.).

Other income increased by SR 0.3M (10.8%) mainly due to increase in rental income from internal advertising at centers.

Increase in Revenue reasons:

• Membership revenue increased by net SR 56.1M attributable to new center openings in the current period (6 male and 4 female centers), growth in LFL (like-for-like centers) and ramping up of non-LFL centers opened last year,

• Increase in Personal Training (PT) revenue by SR 16.4M due to higher number of PT centers contributing during the current period, offset by;

• decrease in rental income by SR 0.6M due to non-renewal of certain real

estate contracts.

Increase in Cost of Revenue reasons:

• Driven by higher number of operating centers in the current period, higher consumables due to increasing number of members, repair works at certain centers and rising external costs, offset by;

• rent adjustment, due to application of new accounting standard for Leases – IFRS 16, where previously reported rent expense is recognized as part of depreciation of right-of-use assets and financial charges on lease liabilities effective from January 1, 2019,

• cost control initiatives and one-off refund of 2018 work permit fees.

Advertising & marketing expenses were lower by SR 4.9M (40.9%) due to lower expenditure (with higher focus on social media), lesser campaigns and completion of partnership agreement with FCB in June 2018.

General & administrative expenses were lower by SR 1.5M (4%), mainly due to decrease in assets written off during the current period and lower staff cost, partly offset by increase in professional fees and employee’s work permit costs during the current period.

Net increase in allowance for impairment of trade receivables was mainly due to application of ECL (expected loss model) on trade receivables.

Finance cost were higher by SR 17.6M (178%) mainly due to recording of interest expense of SR 16.3M on lease liabilities recognized under the new accounting standard for leases – IFRS 16, effective from January 1, 2019.