Basic-Fit VAT from 6% to 12% on sports in Belgium

Yesterday, the Belgian federal government announced an agreement on the federal budget, which includes raising VAT on sports subscriptions from 6.0% to 12.0%. The BeNeLux region remains Basic-Fit's key profit driver, delivering a 46.5% EBITDA less rent margin in 1H25 compared to 12.0% across its other markets. For Belgium, we forecast FY25 revenue of approximately €250 million and underlying EBITDA less rent of €115 million. If the additional 6.0% VAT is absorbed without price adjustments, this would reduce EBITDA by €15 million. At the current 7.8x EV/EBITDA multiple, this equates to a €120 million market cap impact.
As a reference point, Basic-Fit faced a similar situation in the Netherlands two years ago when the government proposed increasing VAT on sports from 9.0% to 21.0%, a measure that was ultimately withdrawn following significant industry opposition. We believe Basic-Fit has sufficient pricing power to offset the impact on average revenue per member, though this could constrain further price increases.