Global Blue Guidance September 25, 2023 Page 1 of 9 GLOBAL BLUE INTRODUCES FINANCIAL GUIDANCE AND LONG-TERM TARGETS Market leadership and technology differentiation drives robust revenue growth, profit margins, and cash flow • Adjusted EBITDA guidance for the fiscal year ending March 2024 (FY23/24) of €145- 165m (85-115% YoY growth), building on strong proof points during the first months of FY23/24 on the back of travel recovery and technology initiatives. • Adjusted EBITDA guidance for fiscal year ending March 2025 (FY24/25) of more than €200m, benefiting from a continued recovery in spend from Asian shoppers and further product investments. • Global Blue expects a normalization in growth starting in FY25/26 and is targeting a long-term revenue growth of 8-12% and ‘Revenue-to-Adjusted EBITDA drop-through’ of more than 50%, supporting a net leverage target of less than 2.5x Net Debt / LTM Adjusted EBITDA. Signy, Switzerland, September 25, 2023 Global Blue Group Holding AG (NYSE:GB and GB.WS) today announced its new financial guidance and long-term targets. Global Blue’s CEO, Jacques Stern, commented: “We recently reported a strong start to our financial year, with 68% YoY growth in Revenue and 300%+ YoY growth in Adjusted EBITDA in Q1 FY23/24. We have positioned the business to outperform the ongoing international travel recovery, thanks in particular to key investments in digitalization and new products, as well as continued cost management. “As such, as the effects of Covid on our business wane and in line with listed company practices, we are introducing financial guidance. We expect to achieve Adjusted EBITDA for FY23/24 of between €145-165m (85-115% YoY growth) and for FY24/25 of more than €200m. Thereafter, we are targeting a normalized long-term revenue growth of 8-12% and ‘Revenue-to-Adjusted EBITDA drop-through’(1) of more than 50%. “Our focus on continuing to digitalize and enhance the Tax Free Shopping journey is driving a better experience for merchants, international shoppers, and all other stakeholders in the ecosystem; this is also delivering demonstrable financial benefits to Global Blue and supporting new merchant wins, allowing us to maintain our leadership position.
Global Blue Guidance September 25, 2023 Page 2 of 9 “We believe our investments in Added Value Payment Solutions and Retail Tech Solutions are gaining traction, increasing our relevance to retailers, merchant acquirers, and hoteliers as they serve not only international travellers but also domestic consumers. We are excited to announce the successful launch of three new technology solutions in these areas: hospitality & retail payments gateway, data analytics, and digital marketing.” Summary Financial Outlook Guidance (fiscal year ending March 31) Adjusted EBITDA(*) FY23/24 • €145-165m (versus €78m FY22/23 and €187m pre-Covid CY19) Adjusted EBITDA(*) FY24/25 • More than €200m Capex (both years) • €40-45m annually, of which ~80% is capitalized software • D&A generally in-line with Capex Long-term Targets Revenue • 8-12% Adjusted EBITDA(*) • >50% ‘revenue-to- Adjusted EBITDA drop-through’(1) Capex • €40-45m annually, of which ~80% is capitalized software • D&A generally in-line with Capex Net Working Capital • Approximately neutral on an annual basis • Due to seasonality, NWC requires investment during peak season (summer) and is a source of cash during winter; cash on hand and revolving credit facility accommodate this seasonality Effective Tax Rate(7) • 24-26% Leverage • Net Debt / LTM EBITDA <2.5x • Organic cash flow generation expected to be prioritized towards debt payment to achieve the target (*) A reconciliation of the foregoing guidance for the non-IFRS metric of Adjusted EBITDA to net income (loss) cannot be provided without unreasonable effort because of the inherent difficulty of accurately forecasting the occurrence and financial impact of the various adjusting items necessary for such reconciliation that have not yet occurred, are out of our control, or cannot be reasonably predicted. For the same reasons, the Company is unable to assess the probable significance of the unavailable information, which could have a material impact on its future IFRS financial results. As this is the first time Global Blue is publicly providing its financial outlook and long-term targets, the Company is providing additional details and metrics below to aid investors, analysts and other market participants in evaluating the Company’s guidance, and the Company may not disclose such additional details and metrics in future periods. In addition, Global Blue is providing guidance through FY24/25 as the Company expects that its business will continue to recover from the effects of the pandemic through FY24/25, and it does not expect to provide multi-year guidance thereafter. Actual results may differ materially from the Company’s guidance as a result of, among other things, the factors described under “Forward-Looking Statements” below.
Global Blue Guidance September 25, 2023 Page 3 of 9 FY23/24 Guidance: Adjusted EBITDA of €145-165m Q1 FY23/24 results showed a significant increase in both growth and profitability – 68% YoY on Revenue and 300%+ YoY on Adjusted EBITDA – on the back of travel recovery, technology-driven initiatives, and cost discipline. Global Blue expects the travel recovery to be solid for the rest of year, especially with the progressive return of Mainland Chinese to Asian destinations first and Europe thereafter. Because the Company’s revenues are based on the aggregate value of transactions (as opposed to number of transactions), inflation continues to be a tailwind for Global Blue, with luxury goods selling at a nominal average price premium of 25% versus 2019 levels. Global Blue’s technology investments have further supported its top-line performance: • Digitalization: Investment in payments integration, allowing for eligibility detection and credit card capture at point of sale, and other technologies have supported a 4ppt step- up versus FY19/20 in the Issue Ratio(2) (64% in FY22/23), especially for travellers coming from the United States (+22ppt to 63% in FY22/23 vs. FY19/20). • Commercial Gains: Net Retention Rate(3) in the last 4 years (FY19/20-FY22/23) for Tax Free Shopping Solutions of 103.0% (versus 100.3% in the 5 years before Covid, FY14/15- FY18/19) and for Added Value Payment Solutions of 104.7%, supported by a new data- driven account management approach. Based on those assumptions, Global Blue is guiding to an Adjusted EBITDA of between €145m and €165m for FY23/24, reflecting a strong YoY growth of 85-115% when comparing to €78m Adjusted EBITDA in FY22/23. FY24/25 Guidance: Adjusted EBITDA of >€200M Management believes Global Blue is well-positioned to continue to benefit from the return of Asian shoppers in FY24/25 towards 2019 levels, in particular Mainland Chinese (Q1 FY23/24 revenue from Mainland Chinese shoppers was still only 38% of 2019 levels), driven by a clear willingness to travel, an increase in air capacity, and an increase in average spend versus 2019. In parallel, Global Blue expects the demand from non-Asian travelers to normalize, with air capacity still expected to improve, but “pent-up demand” triggered by the end of Covid period expected to progressively fade. In addition, Global Blue expects to see the continued benefit from its technology investments, in the form of greater digitalization and further commercial gains. Based on those assumptions, and consistent with the sensitivity table provided during Q1 FY23/24 results showing Adjusted EBITDA guidance for various recovery levels of Mainland Chinese shoppers revenue, Global Blue expects to achieve an Adjusted EBITDA of more than €200m in FY24/25.
Global Blue Guidance September 25, 2023 Page 4 of 9 Long-Term Targets: Normalized Revenue growth of 8-12% and a ‘Revenue-to- Adjusted EBITDA drop-through’(1) of >50% Long-Term Volume & Revenue Growth Targets Tax Free Shopping Solutions In the long-term, Global Blue is targeting a yearly growth of Tax Free Shopping Sales in Store (5) between 10% to 14% as a result of the following five drivers, consisting of market drivers and technology-driven management initiatives: • Luxury Market: The Global Personal Luxury Market is a large, resilient, and consistent compounder, growing at a 6.7% CAGR during 2009-2019, and expected to grow broadly in line at 5.5% to 6.5%(4) during 2022-2030. • Overseas Luxury Market Premium: In line with historical track-record, Global Blue expects the Overseas Market growth to outpace that of the broader Luxury Market. Global Blue is targeting a long-term CAGR of 6.0% to 8.0%(4) (vs. 10.0% in 2009-2019), adjusting for the potential effects of repatriation of a portion of Chinese luxury spend back to China. • New Countries Adopting Tax Free Shopping Scheme: As the leading global Tax Free Shopping provider, Global Blue has a track-record of opening in new countries, with 7 opened between 2009 and 2019 (contributing 2.4% in Sales in Store(5) CAGR over that period) and 3 during Covid. Today, over 100 countries with VAT have not yet introduced a Tax Free Shopping scheme for tourists. In that context, Global Blue is expecting to open in at least 4 new countries over the medium-term, with a target contribution of 1.5% to 2.0% to the CAGR. • Digitalization: Digitalization simplifies the Tax Free Shopping process, such that more transactions are issued and refunded. This effect has contributed 2.0% to the 2009-2019 Sales in Store(5) CAGR. Global Blue is targeting a similar contribution going forward of 2.0% to 2.5%, expected to be driven by the increased take-up of Global Blue’s new technology, e.g., eligibility detection, in-store or in-mobile credit card capture, and Mobile Customer Care. • Commercial Gains: Global Blue’s first mover advantage in digitalization, combined with a new data-driven account management approach, has enabled Global Blue to deliver a Net Retention Ratio(3) of 103.0% in the last 4 years. In the long-term, Global Blue is targeting market share gains that would add 0.5% to 1.5% to the Sales in Store(5) CAGR, which would imply a Net Retention Rate(3) of 100.5% to 101.5%.
Global Blue Guidance September 25, 2023 Page 5 of 9 Global Blue is targeting Tax Free Shopping Revenue growth over the long-term of 7.0% to 11.0%. The growth differential between Sales in Store and Revenue is attributable to pricing evolution (inherent to a volume-based take-rate model) and mix effects (country, merchant, and service). Global Blue is targeting pricing evolution and mix effects to result in an impact of 125bps p.a. and of 175bps p.a., respectively, or a total of 300 bps p.a. differential between Sales in Store(5) and Revenue growth. From 2009-2019, this metric was 400 bps p.a. Added Value Payment Solutions Global Blue is targeting a long-term CAGR Sales in Store(5) growth of its FX solution of 9.0% to 13.0%, as a result of the following three drivers: • Cross-border Digital Payments: The cross-border digital payment market, of which FX Solutions is a subset, is expected to grow between 5 to 7%. • Commercial Gains: Global Blue expects to continue to drive market share gain and is targeting a long-term contribution of 3% to 5% to the Sales in Store(5) CAGR, or a Net Retention Rate(3) of 103% to 105% compared to 104.7% in the last 4 years. • Digitalization & Penetration: Enhanced technology at point of interaction and continued merchant training are expected to drive more penetration of FX Solutions. Global Blue is targeting a contribution of c.1% to the Sales in Store(5) CAGR in the long-term, a conservative assumption compared to the 3.8% contribution to the Sales in Store(5) CAGR delivered between 2009 and 2019. Based on the above Sales in Store(5) drivers, Global Blue is targeting an FX Solutions Revenue growth between 9.0% to 13.0%. In parallel, in the long-term, Global Blue is targeting a CAGR Sales in Store(5) and Revenue growth of its acquiring business in Australia to be in line with the Australian GDP. Retail Tech Solutions In 2021, Global Blue made the strategic decision to increase its scope of technology services to retailers and introduce solutions that extend to both domestic and e-commerce shoppers. Global Blue invested ~$100M to acquire three companies specializing in post-purchase solutions, two in the e-commerce space (ZigZag and Ship-up) and one in-store (Yocuda)(6). Global Blue’s unique access to its retail partners’ C-suite, driven by Tax Free Shopping Solutions and Added Value Payment Solutions, provides the Company with an efficient go-to-market for such solutions. Retail Tech Solutions is targeting continued high Revenue growth (at least 15%), as it is still in the scale-up phase and a clear beneficiary of cross-sell within the Global Blue ecosystem. Global Blue is targeting the Retail Tech Solutions segment to reach Adjusted EBITDA breakeven in the next 2 or 3 fiscal years.
Global Blue Guidance September 25, 2023 Page 6 of 9 Additional Growth Drivers In furtherance of the above strategic decision, in the past four years, Global Blue has launched three products that were developed in-house to unlock new growth opportunities. At this stage, the contribution to growth has not been factored in the above targets: • Hospitality & Retail Payments Gateway: The Hospitality and Retail sector is increasingly shifting towards an omni-channel customer journey, with a focus on the payment experience. As such, building on its deep payment capabilities, Global Blue has recently developed an integrated payment software for the Hospitality and Retail sector, which Global Blue is cross-selling into its 50+ merchant acquirer partners that are already using its FX Solutions technology. • Data Analytics: More companies are basing their strategy and action plan decisioning on data. Through the Tax Free Shopping process, Global Blue collects an average of 50 data points per transaction, e.g., “who” through passport information, “what” through SKU- level itemized collected, and “where / when”. From this extensive dataset, Global Blue has built a comprehensive data offering for retailers and non-retailers to better understand and improve their performance. • International Shoppers Digital Marketing: While the Overseas Luxury Market accounts for nearly one-third of the Luxury Market, Digital Marketing targeting this segment of client is largely an unpenetrated market. Due to Global Blue’s differentiated and proprietary database of 3m+ enrolled international shoppers and its 70% Tax Free Shopping market share, Global Blue has successfully launched Digital Marketing campaigns for its affiliated retailers to drive consumers to their e-commerce websites when at home, or their store when they shop abroad. Profit & Cash Flow Targets Group Adjusted EBITDA Margin Global Blue is targeting ‘Revenue-to-Adjusted EBITDA drop-through’(1) of more than 50% p.a., reflecting the revenue dynamics described above and the cost structure articulated below for reference. Contribution margin (defined as revenue less variable costs for any given period, divided by revenue for such period) by line of business is: • Tax Free Shopping Solutions: 80% to 85% contribution margin; variable costs mainly relate to airport refunding (airport and agent fees). • Added Value Payment Solutions: 60% to 65% contribution margin; variable costs mainly relate to payment network fees and interchange. • Retail Tech Solutions: 60% to 65% contribution margin; variable costs mainly relate to logistics carriers costs at ZigZag.
Global Blue Guidance September 25, 2023 Page 7 of 9 Fixed costs represent 65% of the total costs today, with the benefit of a long-term savings plan implemented during the Covid-impacted period in 2020-2021, during which Global Blue reduced its fixed costs by ~20%, or ~€35 million. Global Blue is targeting fixed costs to increase at a rate of approximately 1pt above inflation, due to ongoing investments in Opex to support its growth drivers. Conclusion Global Blue is pleased to introduce guidance and long-term targets that reflect the ongoing international travel recovery, as well as technology-driven initiatives that are helping to drive growth, profitability, and cash flow generation. 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 for 8-12% revenue growth, >50% ‘Revenue-to-Adjusted EBITDA drop-through’(1), and <2.5x net leverage, with further upside from newly-introduced technology solutions including hospitality & retail payments gateway, data analytics, and digital marketing. (1) Revenue-to-Adjusted EBITDA drop-through refers to the portion of Revenue growth that drops through to the Adjusted EBITDA line and compares the change in Adjusted EBITDA for any given period to the change in Revenue for the same period, expressed as a percentage. It is calculated, with respect to any given period, by dividing (a) the change in Adjusted EBITDA for such period as compared to the prior period, divided by (b) the change in Revenue for such period, as compared to the prior period. (2) Issue ratio represents the number of Tax Free Shopping forms that have been issued, as a percentage of all Tax Free Shopping forms that were eligible to be issued. (3) Net Retention Rate for a given year is a percentage calculated as: 1 + the Sales in Store gained from new accounts and store openings in the given year, net of lost accounts and store closures, divided by the total Sales in Store for the given year. Net Retention Rate does not adjust for luxury inflation through the period. (4) Luxury market forecast based on the following public reports: Bain & Co / Altagamma Luxury Goods Worldwide Market Study (January 2023). (5) Sales in Store, as used with respect to the TFS business, refers to the value (including VAT) of the goods purchased by the international shopper. Sales in Store, as used with respect to the Added Value Payment Solutions business, refers to the value (including VAT) of the payments made by the international shopper. (6) ZigZag is an e-commerce returns specialist; Ship-up is a post online check-out consumer engagement specialist; Yocuda is a digital receipts specialist and post offline check-out consumer engagement. (7) Effective tax rate target assumes cost of debt based on the current senior facility and interest rates (6-months Euribor + 2.75% spread).
Global Blue Guidance September 25, 2023 Page 8 of 9 FOR FURTHER INFORMATION Frances Gibbons, Head of Investor Relations +44 (0) 7815 034 212 fgibbons@globalblue.com NON-IFRS F INANCIAL MEASURES Thi s p ress r elease conta ins cer ta in Non-IFRS F inancia l Measures . Speci fi ca l ly, we refer to the non - I FRS financia l measure “Ad justed EB ITDA.” These non-IFRS measures should be cons idered in add it ion to result s p repared in accordance w i th I FRS, but should not be cons idered a sub st itute for or super ior to IFRS result s . I n the op inion of management , a di scuss ion of these measure s p rovides investor s , f inancia l ana lyst s , r at ing agencies and other f inancia l statement users w ith a bet ter under stand ing of the s igni f i cant factor s that compr i se the Company’s period ic r esult s of operations and how management eva luates the Company’s f inancia l per formance. These non-IFRS measures may not be ind icat ive of G lobal B lue’s hi s torica l operat ing results nor are such measures meant to be p red ict ive of G lobal B lue’s future result s . Not a l l companies ca lculat e non-IFRS measures in the same manner or on a cons i stent bas is . As a r esult , these measures and rat ios may not be comparab le to measures used b y other companies under the same or s imi lar names. Accord ing ly, undue rel i ance should not be p laced on the non -I FRS measures p resented in thi s p ress r elease. FORWARD-LOOK ING STATEMENTS Thi s p ress r elease conta ins cer ta in “forward - look ing s tatements” w i thin the meaning of the P r ivate Secur i t ies L i t ig ation Reform Act of 1995, Sect ion 27A of the Secur i t ies Act and Sect ion 21E of the Secur i t ies Exchange Act of 1934, as amended , includ ing s tatements r egard ing G lobal B lue or it s management ’s expectat ions , hopes, bel iefs , intent ions or s tr ategies r egard ing the future. The word s “target ,” “ant icip ate,” “bel ieve”, “cont inue”, “could”, “est imate”, “expect”, “ intends”, “may”, “might”, “p lan”, “poss ib le”, “potent ia l”, “p red ict”, “project”, “should”, “would” and s imi lar express ions may ident i fy forward - look ing s tatements , but the ab sence of these word s does not mean that a s tatement i s not forward -look ing . These forward - look ing s tatements are based on G lobal B lue’s cur rent expectat ions and bel iefs concerning future developments and thei r potent ia l effect s on G lobal B lue. There can be no assurance that the fut ure developments affect ing G lobal B lue w i l l b e those that we have ant icip ated . These forward -look ing statements involve a number of r i sk s , uncer ta int ies (some of which are beyond G lobal B lue’s cont rol ) or other assumpt ions that may cause actua l r esult s or per formance to be mater ia l ly d i fferent fr om those exp ressed or imp l ied b y these forward -look ing s tatements . Among the key factor s that could cause actua l r esult s to d i ffer mater ia l ly fr om those projected in the forward -look ing s tatements are the fol low ing : cur rency exchange rate r i sk in the conduct of bus iness ; high dependence on internat ional t r avel ; dependence on the o vera l l level o f co nsumer spend ing , which i s a ffected b y genera l economic cond i t ions and spend ing pat terns ; sens i t i vi t y of net work ing capi t a l to short -term, month-to-month volume g rowth, and any r ap id volume g rowth and short -term, temporary surge of i t s net work ing cap ita l ; decrease in Va lue-Added Tax r ates or changes in VAT or VAT refund pol i cies ; changes in the regulatory envi ronment , l i cen s ing requirements and government ag reements ; adap tat ion and enhancement of our ex i s t ing technology offer ing s and ensur ing cont inued resi l ience and upt ime of our under lying technolog y p lat form; loss of merchant accou nt s to our compet i tor s due to the compet i t i ve market ; d i s intermed iat ion of thi rd -party ser viced Tax -Free Shopp ing p rocesses ; pr ice harmonizat ion or convergence between dest inat ion market s and home markets ; taxat ion in mult ip le jur i sdict ions , which i s comp lex and often requi res mak ing sub ject ive d eterminat ions sub ject to scrut iny b y, and d i sag reements w i th, tax regulator s ; ad ver se compet i t ion law rul ing s ; integ ri t y, r el iabi l i t y and effi ciency o f our comp l iance s ystems and fr amework ; dependence of TFS bus iness on a i rpor t concess ions and agreements w i th agent s ; r i sk s associated w it h operat ing in emerg ing market s ; ri sk s associated w i th the ongoing confl i ct between Russ ia and Ukra ine; ri sk s associated w i th s t rateg ic ar rangements or investments in joint ventures wi th third par t ies ; fa i lure to ident i fy ex terna l bus iness oppor tuni t ies or r ea l i ze the expected benefi t s fr om our s t rateg ic acqui s i t ions ; loss through phys ica l d i saster , d ata secur i t y b reach, computer malfunct ion or sabotage; r el iance of AVPS bus iness on relat ionship s wi th acqui rer s and involvement of card schemes; co unterpar ty r i sk and credi t r i sk ; losses fr om fraud , theft and emp loyee er ror ; inab i l i t y to at tr act , integrate, manage and reta in quali f ied per sonnel or key emp loyees; comp lex and st r ingent data p rotect ion and pr ivacy laws and regulat ions ; ant i - money launder ing , sanct ions and anti -b ribery laws and regulation and related comp l iance cost s and thi rd -par ty r isk s ; r i sk s r elat ing to intel lectua l p roperty; l i t i g ation or invest ig at ions involving us , and result ing mater ia l set t lements , f ines or penalt ies ; event of default r esult ing fr om fa i lure to comp ly w ith covenant s or other ob l ig at ions conta ined our Faci l it ies Ag reement ; r el iance on our operat ing sub s id iaries to provide fund s necessary to meet our f inancia l ob l ig at ions , and the const r a int on our abi l i t y to pay d ividend s; r est r i ct ions imposed on our bus iness b y our indeb tedness , and the r i sk that a s i gni f i cant increase in our i ndeb tedness could result in cha nges to the terms on which cred i t is ex tended to us ; inabi l i t y to execute s tr ategic p lans due to inab i l it y to generate suffi cient cash flow; interest r ate ri sk s ; currency t r ans lat ion and tr ansact ion r i sk ; impai rment of intang ib le assets ; the cont rol b y Si lver Lake over us , and potent ia l
Global Blue Guidance September 25, 2023 Page 9 of 9 d i fferences in the interest s pur sued b y Si lver L ake fr om the interest s of our other secur i t yholder s ; inab i l i t y to remed iate mater ia l weaknesses in interna l cont rol over f inancia l r epor ting and fa i lure to mainta in an effect ive system of interna l cont rols , and the inab i l i t y to accurately or t imely repor t our f inancia l cond i t ion or r esult s of operat ions and other factor s descr ibed under “R i sk Factor s” in G lobal B lue’s Annual Report on Form 20 -F for the fi sca l year ended March 31, 2023 f i led w ith the Secur i t ies and Exchange Commiss ion (the “SEC”), and in other repor t s we fi le fr om t ime to t ime w i th the SEC, a l l of which are d i ff i cult to p red ict and are beyond G lobal B lue’s cont rol . Excep t as r equi red b y law, G lobal B lue i s not under tak ing any ob l ig at ion to update or r evi se any forward -look ing s tatements whether as a r esult of new informat ion, future event s or otherw ise. ABOUT GLOBAL BLUE Global Blue offers innovative solutions in three d ifferent fields : • Tax Free Shopping: Hel ping retailers at over 300,000 points of sale to eff iciently ma nage 35 mil l ion Tax Free Shopping transactions a year, thanks to its ful ly integrated in -house technology platform. Meanwhile, its industry -leading digital Tax Free shopper solutions creat e a better, more seamless customer experience • Payments serv ices: Provid ing a ful l suite o f foreign exchange and Payments technology solutions that al low acquirers, hotels and retailers to of fer value -added serv ices and improve the customer experience dur ing 31 mil l ion payment transactions a year at 130,000 points of interaction • RetailTech: Offer ing new technology solut ions to retailers, includ ing dig ital receipts and eCommerce returns, which can be easily integrated with the ir core systems and al low them to optimise and dig ital ise their processes throughout the omn i -channel customer journey , both in -st ore and onl ine In add it ion, our data and adv isory services o ffer a strategic adv isory to help retaile rs identi fy opportunit ies for growth, while our shopper experience and engagement solutions provide data -dr iven solutions to increase footfal l , convert footfal l to Revenue and enhance performance . Pre-pandemic figures FY 19/20. Source: Global Blue