- Strong YoY growth in Adjusted EBITDA of 65.2% to €39.8m in
Q3 FY23/24 and 102.3% to €114.7m in 9M FY23/24, with 9M Adjusted
EBITDA margin of 36.2%
- Continued improvement in the Group’s Annualized Adjusted
EBITDA(1) to €159m in Q3 FY23/24 vs. €142m in Q2 FY23/24
- Strengthened balance sheet, with a strong improvement in LTM
net leverage ratio(2) to 3.6x
- Financial guidance reiterated — FY23/24 Adjusted EBITDA of
€145-165m
Global Blue Group Holding AG (NYSE:GB and GB.WS) today announces
its financial results for the third quarter and nine month period
ended December 31, 2023.
Global Blue’s CEO, Jacques Stern, commented:
“We are pleased to report another strong performance for the
Group, with continued progress across the business through the
third quarter and first nine months of the year.
“We delivered a 26.2% YoY increase in Revenue and a 65.2% YoY
increase in Adjusted EBITDA in Q3 FY23/24, supporting an annualized
quarterly Adjusted EBITDA(1) of €159m and giving us increased
confidence in our FY23/24 Adjusted EBITDA guidance of
€145-165m.
“Towards the latter part of the quarter, as previously
communicated, we took two strategic steps towards improving our
capital structure; we welcomed Tencent as a shareholder following
their $100m strategic equity investment and opportunistically
refinanced all our debt, extending maturity to 2030.
“We have meaningfully deleveraged the Group, with a net leverage
ratio(2) at 3.6x at the end of the quarter vs. 6.5x at the end of
March 2023, and confirm our long-term net leverage objective of
<2.5x”.
EXECUTIVE SUMMARY
Q3 and 9M FY23/24 financial results showed a strong increase in
both growth and profitability.
The Group delivered a 26.2% YoY increase in Revenue to €109.4m
and an 65.2% YoY increase in Adjusted EBITDA to €39.8m in Q3
FY23/24, resulting, for 9M FY23/24, in a 41.1% YoY increase in
Revenue to €317.1m and a 102.3% YoY increase in Adjusted EBITDA to
€114.7m, taking the Adjusted EBITDA margin to 36.2%. This drove a
continued improvement of the Group’s annualized quarterly Adjusted
EBITDA(1) to €159m in Q3 FY23/24, from €142m in Q2 FY23/24 and
€134m in Q1 FY23/24.
Furthermore, as announced previously, the Group completed two
significant capital structure transactions in the latter part of
the period. First, Tencent agreed to invest $100m in Global Blue
common equity, validating Global Blue’s leadership, reflecting
confidence in the ongoing travel recovery, and supporting the
stated de-leveraging target. Second, to further strengthen the
balance sheet, the Group refinanced its debt with a senior term
loan of €610.0m and a revolving credit facility of €97.5m,
extending maturity to 2030.
In January 2024, Tax Free Shopping like-for-like (“LfL”)) Issued
Sales in Store(3) recovery reached 125% in Continental Europe and
161% in Asia Pacific. The recovery of Mainland Chinese continues to
accelerate benefitting from a strong willingness to travel and shop
abroad, air capacity improvement and visa issuance reduced lead
time. In that context, the Mainland China recovery in Asia Pacific
reached 127% in January vs. 105% in Q3 FY23/24, while Mainland
China recovery in Continental Europe reached 80% in January vs. 58%
in Q3 FY23/24.
All this considered, Global Blue could achieve Adjusted EBITDA
in excess of €200m(4), based on annualization of Q3 FY23/24 results
and assuming Mainland China Revenue recovery reaches 100%(5) vs. a
Mainland China Revenue recovery at 52% in Q3 FY23/24.
In conclusion, the Group reiterates the financial guidance and
long-term targets issued on September 25, 2023, with FY23/24
Adjusted EBITDA of €145-165m.
FINANCIAL PERFORMANCE
Q3 FY23/24 Financial Performance
€M
Q3
FY21/22
Q3
FY22/23
Q3
FY23/24
Q3 FY23/24
vs.
Q3 FY22/23 (%)
Revenue
Tax Free Shopping Solutions
Added Value Payment Solutions
Retail Tech Solutions
29.4
5.9
3.6
64.4
16.2
6.1
80.3
22.3
6.8
Group Revenue
38.9
86.7
109.4
26.2%
Adjusted Operating Expenses
(35.6)
(62.6)
(69.6)
Adjusted EBITDA
Adjusted EBITDA Margin(%)
3.3
8.4%
24.1
27.8%
39.8
36.3%
65.2%
Adjusted Depreciation &
Amortisation
(10.1)
(9.2)
(9.7)
Net Finance Costs
(6.2)
(3.7)
(12.0)
Adjusted Profit before Tax
(13.0)
11.1
18.1
Adjusted Income Tax Expense
(0.4)
(3.7)
(7.0)
Non-Controlling Interests
(0.3)
(0.8)
(1.9)
Adjusted Net Income Group Share
(13.8)
6.6
9.1
Revenue The Group delivered Revenue of €109.4m in Q3
FY23/24, a 26.2% YoY increase, reflecting a strong performance
across all business lines.
Tax Free Shopping Solutions delivered Revenue of €80.3m in Q3
FY23/24, a 24.8% YoY increase. Revenue in Continental Europe
reached €68.1m, a 17.7% LfL YoY increase, while Revenue in Asia
Pacific reached €12.2m, an 83.5% LfL YoY increase. This strong
performance reflects the ongoing recovery across all origin
nationalities with the acceleration of the Mainland China recovery
being the key driver of the Revenue improvement in both Asia
Pacific and Europe.
Added Value Payment Solutions delivered Revenue of €22.3m in Q3
FY23/24, a 37.4% YoY increase, reflecting a strong performance
across both business segments. Revenue in FX Solutions reached
€10.6m, a 64.2% LfL YoY increase, while Revenue in the Acquiring
business reached €11.7m, a 26.2% LfL YoY increase.
Retail Tech Solutions delivered Revenue of €6.8m in Q3 FY23/24,
an 11.6% YoY increase, reflecting organic growth of 3.9% (€0.2m),
with the remainder related to the consolidation of ShipUp, acquired
on November 1, 2022. Whilst LfL Revenue growth was moderate at
3.9%, as a result of the cessation of sale of carriage to ZigZag
clients (revenue with a low contribution), the LfL contribution
growth of the segment (i.e., after carrier costs) was very strong
at 80.0%.
Adjusted EBITDA The Group delivered Adjusted EBITDA of
€39.8m in Q3 FY23/24, a 65.2% YoY increase, reflecting the
significant improvement in Revenue together with the ongoing focus
on the cost base. This implied an improvement in margin of 8.5pts
to 36.3% and a Revenue drop-through(6) to Adjusted EBITDA of
69.2%.
Furthermore, annualized Adjusted EBITDA(1) has shown a
consistent improvement to €159m in Q3 FY23/24, from €35m in Q1
FY22/23, €84m in Q2 FY22/23, €98m in Q3 FY22/23, €115m in Q4
FY22/23, €134m in Q1 FY23/24 and €142m in Q2 FY23/24.
9M FY23/24 Financial Performance
€M
9M
FY21/22
9M
FY22/23
9M
FY23/24
9M FY23/24
vs.
9M FY22/23 (%)
Revenue
Tax Free Shopping Solutions
Added Value Payment Solutions
Retail Tech Solutions
61.5
16.0
9.3
166.4
44.1
14.1
235.2
61.3
20.6
Group Revenue
86.8
224.7
317.1
41.1%
Adjusted Operating Expenses
(94.6)
(168.0)
(202.4)
Adjusted EBITDA
Adjusted EBITDA Margin(%)
(7.8)
(9.0%)
56.7
25.2%
114.7
36.2%
102.3%
Adjusted Depreciation &
Amortisation
(30.3)
(27.0)
(27.6)
Net Finance Costs
(18.7)
(27.6)
(36.6)
Adjusted Profit before Tax
(56.9)
2.1
50.5
Adjusted Income Tax Expense
4.4
(7.5)
(19.6)
Non-Controlling Interests
(0.7)
(1.7)
(5.6)
Adjusted Net Income Group Share
(53.2)
(7.1)
25.3
Revenue The Group delivered Revenue of €317.1m in 9M
FY23/24, a 41.1% YoY increase reflecting a strong performance
across all business lines.
Tax Free Shopping Solutions delivered Revenue of €235.2m in 9M
FY23/24, a 41.3% YoY increase. Revenue in Continental Europe
reached €202.1m, a 32.7% LfL YoY increase; while Revenue in Asia
Pacific reached €33.1m, a 125.0% LfL YoY increase, reflecting the
ongoing recovery across all origin nationalities with the reopening
of Chinese borders in January 2023 being the key driver of the
Revenue improvement in both Asia Pacific and Europe.
Added Value Payment Solutions delivered Revenue of €61.3m in 9M
FY23/24, a 38.9% YoY increase, reflecting a strong performance
across both business segments. Revenue in FX Solutions reached
€31.0m, a 54.6% LfL YoY increase; while Revenue in the Acquiring
business reached €30.3m, a 36.2% LfL YoY increase.
Retail Tech Solutions delivered Revenue of €20.6m in 9M FY23/24,
a 45.7% YoY increase, reflecting strong organic growth of 22.3%
(€3.7m), and the remainder from the consolidation of ShipUp,
acquired on 1 November 2022.
Adjusted EBITDA The Group delivered Adjusted EBITDA of
€114.7m in 9M FY23/24, a 102.3% YoY increase reflecting the
significant improvement in Revenue together with the ongoing focus
on the cost base. This implied an improvement in margin of 11ppts
to 36.2% and a Revenue drop-through(6) to Adjusted EBITDA of
62.8%.
Adjusted Profit before Tax The Group delivered Adjusted
Profit Before Tax of €50.5m in 9M FY23/24, a €48.4m YoY increase,
mainly reflecting the significant increase in Adjusted EBITDA
partially offset by an increase of €9.0m in net finance costs,
related to higher interest costs in the period.
Balance Sheet and Net Debt As at December 31, 2023, Group
Net Debt reached €508.6m, consisting of Gross Financial Debt of
€610.0m and Cash & Cash Equivalents of €101.4m, resulting in a
net leverage ratio(2) of 3.6x.
LATEST TAX FREE SHOPPING TRENDS
% Recovery Issued Sales in
Store*
Tax Free Shopping
Q1 FY23/24
Q2 FY23/24
Q3 FY23/24
January 2024
January 2024 vs. Q3
FY23/24
Continental Europe LfL
121%
119%
118%
125%
+7ppts
(excluding UK; same merchant)
APAC LfL
111%
134%
150%
161%
+11ppts
(same merchant)
Group LfL
118%
123%
127%
135%
+8ppts
(excluding UK; same merchant)
Group reported
(including UK; non-same merchant)
103%
102%
106%
110%
+4ppts
*Refers to the issued Sales in Store (spend) compared to
Calendar Year 2019.
In January 2024, the recovery in Tax Free Shopping Group
reported LfL Issued Sales in Store(3) increased to 110% vs. 106% in
Q3 FY23/24 (+4ppts) on the back of a solid performance in both
Continental Europe and Asia Pacific.
In January 2024, excluding Mainland China and Russia,
Continental Europe recovery reached 156% vs. 153% in Q3 FY23/24,
whilst recovery in Asia Pacific reached 194% in January 2024 vs.
197% in Q3 FY23/24.
The recovery in Continental Europe reached 125% in January 2024
vs. 118% in Q3 FY23/24 (+7ppts). US, GCC and regional European
shoppers continued to drive the recovery in Continental Europe in
January, with recovery at 290%, 273% and 209% respectively. The US
sustained a strong level of recovery which was again driven by High
Net Worth Individuals and Very Important Clients who have
significantly increased their spend vs. 2019. Meanwhile, the
recovery in Mainland China continued to accelerate, at 80% in
January 2024 vs. 58% in Q3 FY23/24 (+22ppts) as a result of an
increase in air capacity and higher visa issuance.
The recovery in Asia Pacific reached 161% in January 2024 vs.
150% in Q3 FY23/24 (+11ppts). Hong Kong/Taiwan and North East Asia
shoppers drove the strong recovery in Asia Pacific in January 2024,
with recovery at 426% and 242% respectively. Meanwhile, Mainland
China’s recovery continued to strengthen, at 127% in January 2024
vs. 105% in Q3 FY23/24 (+22ppts), with Very Important Clients, High
Net Worth Individuals and affluent shoppers driving the recovery,
with average spend more than doubling vs. 2019.
Impact of China reopening on Global Blue’s
profitability
With Mainland China representing approximately 36% of Tax Free
Shopping Sales in Store in 2019, the return of Chinese shoppers is
an important contributor to the ongoing recovery.
The willingness to travel of Chinese shoppers, based on Global
Blue’s proprietary survey, remained strong, reaching 76% in January
2024. The air capacity recovery from China continues to trend
upwards, reaching 82% in Continental Europe and 83% in Asia Pacific
in January 2024. Finally, as for most nationalities, a strong
average spend progression per Chinese shopper is noticeable,
reaching 115% in Asia Pacific and 63% in Continental Europe in
January 2024 vs. 2019.
In conclusion, Global Blue should be well placed to benefit from
the progressive reopening of Mainland Chinese international travel.
Based on an annualization of Q3 FY23/24 results, and assuming
Mainland China Revenue recovery reaches 100%(5) vs. a Mainland
China Revenue recovery at 52% in Q3 FY23/24.
FINANCIAL GUIDANCE AND LONG-TERM TARGETS
In September 2023, the Group issued guidance and long-term
targets as it continues to benefit from the strong growth drivers
of the business; Global Blue Group Holding AG - Global Blue
Introduces Financial Guidance and Long-term Targets.
In summary, Global Blue expects Adjusted EBITDA of €145-165m in
FY23/24 and more than €200m in FY24/25. As the environment
normalizes thereafter, in the long-term, Global Blue is targeting
8-12% Revenue growth, >50% Revenue-to-Adjusted EBITDA
drop-through(6), and a net leverage ratio(2) <2.5x.
1Annualized extrapolation includes Tax Free Shopping Solutions,
Added Value Payment Solutions and Retail Tech Solutions performance
in Q1, Q2, Q3 and Q4 FY22/23, and Q1, Q2 and Q3 FY23/24, applied to
the year. 2Net Leverage refers to Net Debt divided by the last 12
months Adjusted EBITDA excluding Retail Tech Adjusted EBITDA
losses. 3 Refers to the Issued Sales-In-Store (Spend),
like-for-like (at constant merchant scope and exchange rates).
4Simulation based on illustrative assumptions and should not be
relied upon as being indicative of future results. This is not a
forecast. This is forward-looking information – see Disclaimer.
Yearly extrapolation includes Tax Free Shopping Solutions/ Added
Value Payment Solutions performance in Q3 FY23/24 applied to the
year. 5100% Mainland China Revenue recovery would require Chinese
LfL Issued Sales in Store to reach around 127%. 6Refers to the
portion of Revenue growth that drops through to the Adjusted EBITDA
line.
WEBCAST INFORMATION
An audio recording of commentary on the results, along with
supplemental financial information, can be accessed via the
Investor Relations section of the company’s website at Global
Blue Group Holding AG - Investor Relations.
NON-IFRS FINANCIAL MEASURES This press release contains
certain Non-IFRS Financial Measures. These non-IFRS measures may
not be indicative of Global Blue’s historical operating results nor
are such measures meant to be predictive of Global Blue’s future
results. Not all companies calculate non-IFRS measures in the same
manner or on a consistent basis. As a result, these measures and
ratios may not be comparable to measures used by other companies
under the same or similar names. Accordingly, undue reliance should
not be placed on the non-IFRS measures presented in this press
release.
FORWARD-LOOKING STATEMENTS This press release contains
certain “forward-looking statements” within the meaning of the
Private Securities Litigation Reform Act of 1995, Section 27A of
the Securities Act and Section 21E of the Securities Exchange Act
of 1934, as amended, including statements regarding Global Blue or
its management’s expectations, hopes, beliefs, intentions, or
strategies regarding the future. The words “anticipate,” “believe”,
“continue”, “could”, “estimate”, “expect”, “intends”, “may”,
“might”, “plan”, “possible”, “potential”, “predict”, “project”,
“should”, “would” and similar expressions may identify
forward-looking statements, but the absence of these words does not
mean that a statement is not forward-looking. These forward-looking
statements are based on Global Blue’s current expectations and
beliefs concerning future developments and their potential effects
on Global Blue. There can be no assurance that the future
developments affecting Global Blue will be those that we have
anticipated. These forward-looking statements involve a number of
risks, uncertainties (some of which are beyond Global Blue’s
control) or other assumptions that may cause actual results or
performance to be materially different from those expressed or
implied by these forward-looking statements. These include
commercial expectations and other external factors, including
political, legal, fiscal, market and economic conditions and
factors affecting travel and traveller shopping, including the
global COVID-19 pandemic and applicable legislation, regulations
and rules (including, but not limited to, accounting policies and
accounting treatments), movements in foreign exchange rates,
inflation and other factors described under “Risk Factors” in
Global Blue’s Annual Report on Form 20-F/A for the fiscal year
ended March 31, 2023 filed with the Securities and Exchange
Commission (the “SEC”), and in other reports we file from time to
time with the SEC, all of which are difficult to predict and are
beyond Global Blue’s control. Except as required by law, Global
Blue is not undertaking any obligation to update or revise any
forward-looking statements whether as a result of new information,
future events or otherwise.
ABOUT GLOBAL BLUE
Global Blue offers innovative solutions in three different
fields:
- Tax Free Shopping: Helping retailers at over 300,000 points of
sale to efficiently manage 35 million Tax Free Shopping
transactions a year, thanks to its fully integrated in-house
technology platform. Meanwhile, its industry-leading digital Tax
Free shopper solutions create a better, more seamless customer
experience
- Payments services: Providing a full suite of foreign exchange
and Payments technology solutions that allow acquirers, hotels, and
retailers to offer value-added services and improve the customer
experience during 31 million payment transactions a year at 130,000
points of interaction
- RetailTech: Offering new technology solutions to retailers,
including digital receipts and eCommerce returns, which can be
easily integrated with their core systems and allow them to
optimise and digitalise their processes throughout the omni-channel
customer journey, both in-store and online
In addition, our data and advisory services offer a strategic
advisory to help retailers identify opportunities for growth, while
our shopper experience and engagement solutions provide data-driven
solutions to increase footfall, convert footfall to Revenue and
enhance performance.
Pre-pandemic figures FY 19/20. Source: Global Blue
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version on businesswire.com: https://www.businesswire.com/news/home/20240223778116/en/
FOR FURTHER INFORMATION Frances Gibbons, Head of Investor
Relations +44 (0) 7815 034 212 fgibbons@globalblue.com
Global Blue (NYSE:GB)
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