- Significant YoY growth in Adjusted EBITDA — 82.8% to €47.2m
in Q2 FY23/24 and 129.7% to €75.0m in H1 FY23/24, taking the H1
EBITDA margin to 36%
- Continued growth inflection with annualized Q2 FY23/24
Adjusted EBITDA reaching €142m(1)
- Improved capital structure:
- $100M strategic equity investment from Tencent reflecting
confidence in ongoing travel recovery and supporting
de-leveraging
- Opportunistic refinancing with new 7-year debt rated B+ /
B1
- 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 second quarter and six months period
ended September 30, 2023.
Global Blue’s CEO, Jacques Stern, commented:
“We are pleased to report a strong set of financial results with
continued progress in growth and profitability through the second
quarter and first half of the year, alongside multiple strategic
developments.
“We delivered a 38% YoY increase in Revenue and an 83% YoY
increase in Adjusted EBITDA in Q2 FY23/24, supporting an annualized
quarterly Adjusted EBITDA of €142m(1) and giving us confidence in
our FY23/24 Adjusted EBITDA guidance of €145-165m.
“In parallel, we are pleased to welcome Tencent as a
shareholder, following their $100m strategic equity investment, and
to have opportunistically refinanced all our debt, extending
maturity to 2030.”
EXECUTIVE SUMMARY
Q2 and H1 FY23/24 financial results showed a significant
increase in both growth and profitability.
The Group delivered a 38% YoY increase in Revenue to €113m and
an 83% YoY increase in Adjusted EBITDA to €47m in Q2 FY23/24,
resulting, for H1 FY23/24, in a 50% YoY increase in Revenue to
€208m and a 130% YoY increase in Adjusted EBITDA to €75m taking the
EBITDA margin to 36%. This drove a continued improvement of the
annualized quarterly Adjusted EBITDA (including Retail Tech
Solutions) to €142m(1) in Q2 FY23/24, from €115m in Q4 FY22/23 and
€134m in Q1 FY23/24.
In November (post the period-end), Global Blue concluded two
significant capital structure transactions. First, Tencent agreed
to invest $100 million in Global Blue common equity, consisting of
50% primary and 50% secondary, for a 7.6% stake in the Group. This
investment validates Global Blue’s leadership, reflects confidence
in ongoing travel recovery, and supports stated de-leveraging
target. Second, to further strengthen the balance sheet, the Group
opportunistically refinanced its debt with a senior term loan of
€610m and a revolving credit facility of €97.5m, extending maturity
to 2030 and implying a post-refinancing Net Debt / annualized
quarter Adjusted EBITDA of 3.8x(7).
In October 2023, excluding Mainland China and Russia, Tax Free
Shopping like-for-like (“LfL”(2)) Issued Sales in Store(3) recovery
reached 154% in Continental Europe and 189% in Asia Pacific. The
Group continued to benefit from the reopening of Mainland China in
January 2023, with recovery in Asia Pacific at 109% in October vs.
105% in Q2 FY23/24, while Mainland China recovery in Continental
Europe, continuing to be impacted by long lead time in visa
issuance and the absence of group travel, saw a recovery at 52% in
October vs. 45% in Q2 FY23/24.
Taking this together, Global Blue could achieve Adjusted EBITDA
in excess of €200m(4), based on annualization of Q2 FY23/24 results
and assuming Chinese Revenue recovery illustratively reaches 105%
(still well below other nationalities today) vs. a 40% Revenue
recovery in Q2 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
Q2 FY23/24 Financial Performance
€M
Q2 FY21/22
Q2 FY22/23
Q2 FY23/24
Q2 FY23/24 vs.
Q2 FY22/23 (%)
Revenue
Tax Free Shopping Solutions
Added Value Payment Solutions
Retail Tech Solutions
23.0
5.3
2.9
62.5
15.3
4.1
86.2
20.2
6.7
Group Revenue
31.2
81.9
113.2
38.2%
Adjusted Operating Expenses
(31.6)
(56.1)
(66.0)
Adjusted EBITDA
(0.4)
25.8
47.2
82.8%
Adjusted Depreciation &
Amortisation
(10.2)
(9.1)
(8.9)
Net Finance Costs
(6.1)
(13.8)
(13.9)
Adjusted Profit before Tax
(16.7)
2.9
24.4
Adjusted Income Tax Expense
1.5
(4.4)
(8.1)
Non-Controlling Interests
(0.4)
(0.6)
(2.3)
Adjusted Net Income Group Share
(15.6)
(2.1)
14.0
Revenue The Group delivered Revenue of €113.2m in Q2
FY23/24, a 38.2% YoY increase, reflecting a strong performance
across all business lines.
Tax Free Shopping Solutions delivered Revenue of €86.2m in Q2
FY23/24, a 37.9% YoY increase. Revenue in Continental Europe was
€75.0m, a 28.5% LfL YoY increase, while Revenue in Asia Pacific was
€11.2m, a 154.5% LfL YoY increase. This strong performance reflects
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 €20.2m in Q2
FY23/24, a 32.0% YoY increase, reflecting a strong performance
across both business segments. Revenue in FX Solutions was €10.4m,
a 38.5% LfL YoY increase, while Revenue in the Acquiring business
was €9.8m, a 41.8% LfL YoY increase.
Retail Tech Solutions delivered Revenue of €6.7m in Q2 FY23/24,
a 65.0% YoY increase, reflecting strong organic growth of 39.1%
(€1.6m) from ZigZag and Yocuda, and the remainder from the
consolidation of ShipUp (acquired on 1 November 2022).
Adjusted EBITDA The Group delivered Adjusted EBITDA of
€47.2m in Q2 FY23/24, an 82.8% YoY increase, reflecting the
significant improvement in Revenue together with the ongoing focus
on the cost base. This implied an improvement in margin of 10pts to
42% and a ‘Revenue drop-through to Adjusted EBITDA’(5) of 68%.
Furthermore, annualized Q2 FY23/24 Adjusted EBITDA (including
Retail Tech Solutions) of €142M(1) has shown a consistent
improvement, from €35m in Q1 FY22/23, to €84m in Q2 FY22/23, to
€98m in Q3 FY22/23, to €115m in Q4 FY22/23, and to €134m in Q1
FY23/24.
H1 FY23/24 Financial Performance
€M
H1 FY21/22
H1 FY22/23
H1 FY23/24
H1 FY23/24 vs.
H1 FY22/23 (%)
Revenue
Tax Free Shopping Solutions
Added Value Payment Solutions
Retail Tech Solutions
32.1
10.1
5.7
102.1
27.9
8.0
154.8
39.0
13.8
Group Revenue
47.9
138.0
207.7
50.4%
Adjusted Operating Expenses
(59.0)
(105.4)
(132.7)
Adjusted EBITDA
(11.1)
32.6
75.0
129.7%
Adjusted Depreciation &
Amortisation
(20.2)
(17.8)
(17.9)
Net Finance Costs
(12.5)
(23.8)
(24.6)
Adjusted Profit before Tax
(43.8)
(9.0)
32.5
Adjusted Income Tax Expense
4.9
(3.8)
(12.6)
Non-Controlling Interests
(0.4)
(0.9)
(3.7)
Adjusted Net Income Group Share
(39.4)
(13.7)
16.1
The Group delivered Revenue of €207.7m in H1 FY23/24, a 50.4%
YoY increase reflecting a strong performance across all business
lines.
Tax Free Shopping Solutions delivered Revenue of €154.8m in H1
FY23/24, a 51.7% YoY increase. Revenue in Continental Europe was
€133.9m, a 41.8% LfL YoY increase; while Revenue in Asia Pacific
was €20.9m, a 160.0% 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 €39.0m in H1
FY23/24, a 39.8% YoY increase, reflecting a strong performance
across both business segments. Revenue in FX Solutions was €20.4m,
a 50.0% LfL YoY increase; while Revenue in the Acquiring business
was €18.7m, a 43.0% LfL YoY increase.
Retail Tech Solutions delivered Revenue of €13.8m in H1 FY23/24,
a 71.4% YoY increase, reflecting strong organic growth of 43.8%
(€3.5m) from ZigZag and Yocuda, and the remainder from the
consolidation of ShipUp (acquired on 1 November 2022).
Adjusted EBITDA The Group delivered Adjusted EBITDA of
€75.0m in H1 FY23/24, a 129.7% YoY increase reflecting the
significant improvement in Revenue together with the ongoing focus
on the cost base. This implied an improvement in margin of 12ppts
to 36% and a ‘Revenue drop-through to Adjusted EBITDA’(5) of
61%.
Adjusted Profit before Tax The Group delivered Adjusted
Profit Before Tax in H1 FY23/24 of €32.5m, a €41.5m YoY increase,
mainly reflecting the significant increase in Adjusted EBITDA.
Balance Sheet and Net Debt (prior to the refinancing) As
at September 30, 2023, Group Net Debt reached €568.5m, consisting
of Gross Financial Debt of €790.1m and Cash & Cash Equivalents
of €221.6m. The Group was in compliance with the total net leverage
financial covenant testing.
SUBSEQUENT FINANCIAL EVENTS
Strategic Equity Investment On November 16, 2023, the
Group announced a $100m strategic equity investment from Tencent, a
world leading internet and technology company. Tencent agreed to
invest $100m in Global Blue common equity at a price of $5.50 per
share, which is generally in line with the volume-weighted average
price over the past 3 months. The common shares consist of 50%
secondary common shares to be sold by affiliates of Silver Lake and
Partners Group and certain members of Global Blue’s board and
management and 50% primary common shares to be issued by Global
Blue, the proceeds of which will be used to de-lever. This implies
an ownership in Global Blue that will be approximately 7.6% of the
total issued share capital on a fully-diluted basis. The
transaction closed on November 28, 2023.
Opportunistic Refinancing On November 24, 2023, in order
to further strengthen the balance sheet in the face of continued
growth, the Group refinanced its term loan, revolving credit
facilities (RCF), and shareholder liquidity facility. The new debt
consists of a 7-year term loan of €610m and a 6.5-year RCF of
€97.5m, bringing maturity to 2030 and implying a post-refinancing
Net Debt / annualized quarter Adjusted EBITDA of 3.8x(7). The term
loan and RCF have a variable annual interest rate equal to Euribor
plus a spread of 500bps and 450bps, respectively, with several
step-downs as the Company de-levers. The RCF has a
utilization-based leverage covenant, tested quarterly at 8.0x
senior leverage. In parallel, the Group secured a credit rating
with S&P at B+ and Moody’s at B1.
LATEST TAX FREE SHOPPING TRENDS
% Recovery Issued Sales in
Store(2)
Tax Free Shopping
Q1 FY23/24
Q2 FY23/24
October 2023
October 2023 vs. Q2
FY22/23
Continental Europe LfL
121%
119%
115%
(-4ppts)
(excluding UK and same merchant)
APAC LfL
111%
134%
147%
+13ppts
(same merchant)
Group LfL
118%
123%
123%
-
(excluding UK and same merchant)
Group reported
(including UK and non-same merchant)
103%
102%
106%
+4ppts
Refers to the issued Sales in Store (spend) compared to Calendar
Year 2019.
In October 2023, the recovery in Tax Free Shopping Group
reported LfL(2) Issued Sales in Store(3) slightly increased to 106%
in October 2023 vs. 102% in Q2 FY23/24 (+4ppts) on the back of a
slightly lower performance in Continental Europe and a strong
acceleration in Asia Pacific.
In October 2023, excluding Mainland China and Russia,
Continental Europe recovery reached 154% vs. 157% in Q2 FY23/24,
whilst recovery in Asia Pacific reached 189% in October 2023 vs.
169% in Q2 FY23/24.
The recovery in Continental Europe slightly softened to 115% in
October 2023 vs. 119% in Q2 FY23/24 (-4ppts) and was due to the mix
of traveler nationalities as the exposure to Mainland China
residents was higher during Golden Week, where the recovery rate is
still below other nationalities. Additionally, the recent events in
Palestine during the latter part of October 2023 had a minor impact
on the recovery, causing a decrease from -1 to -2ppts. US, GCC and
regional European shoppers continued to be key contributors to the
recovery in Continental Europe in October, with recovery at 260%,
241% and 192% respectively. The US recovery remained strong, in
line with the summer performance, and was driven by a significant
increase in spend by the High Net Worth Individuals and Very
Important Client categories. While recovery in Mainland China
remains constrained by long lead time in visa issuance and the
absence of group travel, the recovery level increased to 52% in
October 2023 vs. 45% in Q2 FY23/24 (+7ppts) with High Net Worth
Individuals and Affluent shoppers being key contributors to the
recovery where the rate of spending has more than doubled.
The recovery in Asia Pacific reached 147% in October 2023 vs.
134% in Q2 FY23/24 (+13ppts). Hong Kong/Taiwan and North East Asia
shoppers drove the strong recovery in Asia Pacific in October 2023,
with recovery at 555% and 276% respectively. Meanwhile, Mainland
China’s recovery remained strong at 109% in October 2023 vs. 105%
in Q2 FY23/24 (+4ppts), as a result of the progressive return of
Chinese shoppers and a significant increase in the average spend
per shopper.
Impact of China Reopening on Global Blue’s
profitability
With Mainland China representing approximately 36% of Tax Free
Shopping Sales in Store(3) 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 above 70% in October 2023. The
air capacity recovery from China continues to trend upwards,
reaching 60% in Continental Europe in October 2023 vs. 54% in Q2
FY23/24 and 61% in Asia Pacific in October 2023 vs. 54% in Q2
FY23/24. However, the lead time required for visa issuance and the
absence of group travel remain key barriers to a stronger recovery
in Continental Europe.
Finally, as for most nationalities, a strong average spend
progression per Chinese shopper is noticeable, reaching 132% in
Asia Pacific and 33% in Continental Europe in October 2023 vs.
2019.
In summary, Global Blue should be well placed to benefit from
the progressive reopening of Mainland Chinese international travel.
Based on an annualization of Q2 FY23/24 quarter’s results, Global
Blue could achieve Adjusted EBITDA in excess of €200m(4) once
Chinese Revenue recovery reaches 105% vs. a 40% Revenue recovery in
Q2 FY23/24.
RECENT ACHIEVEMENTS
During the period, the Group continued to make strategic
progress in furtherance of its focus on digitalization, commercial
gains, and product development.
Tax Free Shopping Solutions has continued to gain several
marquee new clients in H1 FY23/24. This reinforces Global Blue’s
leading market position in Tax Free Shopping and highlights its
sustainable and differentiated proposition. The division maintained
a net retention rate(6) of 103.0% in the prior four years (FY19/20
to FY22/23) vs. 100.3% in FY14/15 to FY18/19. There has also been
continued progress in digitalization of the Tax Free Shopping
journey, allowing Global Blue to increase the success ratio (i.e.,
penetration). There has been progress across the issuing,
validation and refunding process, alongside investments in consumer
interaction such as mobile customer care which saw Global Blue
interact, post-purchase, with 66% of shoppers’ transactions.
Added Value Payment Solutions was also successful in securing
market share with new acquirer gains and cross-sales in the period
and maintained a net retention rate(6) of 104.7% in FY20/21 to
FY22/23. Equally importantly, the division launched its Hospitality
and Retail Gateway, which is sold to acquirers and payment services
providers allowing them to compete with cross-border integrated
software payment providers. This has been implemented within 276
hotels with seven acquirers signed, alongside a healthy global
pipeline supporting future growth.
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.
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’(5), and a net debt / LTM Adjusted EBITDA
<2.5x.
Main long-term targets
Tax Free Shopping Solutions: Post
the Mainland China recovery (FY25/26), growth in the Overseas
Luxury Market is expected to deliver a long-term CAGR of 6.0% to
8.0% in FY25/26 to FY 27/28. With the additional contribution from
the opening of new markets (1.5 to 2.5%), increased digitalization
(2.0 to 2.5%) and net retention gain (0.5 to 1.5%), Global Blue
expects Issued Sales in Store(3) growth of 10.0% to 14.0% in
FY25/26 to FY27/28.
On that basis, Global Blue is targeting Revenue growth of 7.0%
to 11.0% for FY25/26 to FY27/28. The growth differential between
Sales in Store(3) 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 a 3.0% differential between
Sales in Store(3) and Revenue growth.
Added Value Payment Solutions: Post
the recovery, Global Blue is targeting a long-term CAGR Sales in
Store(3) growth of its FX Solutions business of 9.0% to 13.0% for
FY25/26 to FY27/28. This is driven by the expected growth in the
cross-border digital payment market (5.0 to 7.0%), commercial gains
with new acquirers (2.0 to 4.0%), cross-sale of new channels (1.0%)
and increased penetration (1.0%).
On that basis, Global Blue is targeting FX Solutions Revenue
growth between 9.0% to 13.0% and in line with Sales in Store(3)
growth, with treasury gain increase offset by lower pricing. In
parallel, in the long-term, Global Blue is targeting a CAGR Sales
in Store(3) and Revenue growth of its acquiring business in
Australia to be in line with Australian GDP.
Retail Tech Solutions
Retail Tech Solutions is targeting continued high Revenue growth
of at least 15%, as it is still in the scale-up phase and a clear
beneficiary of cross-sell within the Global Blue ecosystem.
Finally, along with the current and future recovery, Global Blue
will continue to benefit from its long-term growth drivers, while
remaining well hedged against the risk of worldwide inflation and
potential European recession.
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.
1 Annualized 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 and Q2 FY23/24, applied to the
year. 2 Refers to the Issued Sales-In-Store (Spend), like-for-like
(at constant merchant scope and exchange rates). 3 Sales in Store,
in respect to the TFS business, refers to the value (including VAT)
of the goods purchased by the international shopper. Sales in
Store, in respect to the Added Value Payment Solutions business,
refers to the value (including VAT) of the payments made by the
international shopper. 4 Simulation 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 Q2 FY23/24 applied to the year. 5 Refers to the portion of
Revenue growth that drops through to the EBITDA line. 6 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. 7 Based on
Q2 FY23/24 annualized EBITDA excluding Retail Tech.
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
View source
version on businesswire.com: https://www.businesswire.com/news/home/20231129880785/en/
FOR FURTHER INFORMATION
Frances Gibbons, Head of Investor Relations +44 (0) 7815 034 212
fgibbons@globalblue.com
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