Birkenstock plc(BIRK) - 2023 Q4 - Annual Report

Fiscal Year 2023 Financial Results and 2024 Outlook Fiscal Year 2023 Performance Highlights The company achieved strong 20% revenue growth to €1.492 billion, with healthy Adjusted Net Profit and EBITDA growth | Financial Metric | FY 2023 | FY 2022 | Change | | :--- | :--- | :--- | :--- | | Revenues | €1.492 billion | €1.243 billion | +20% | | Gross Profit Margin | 62.1% | 60.3% | +180 bps | | Net Profit | €75 million | €187 million | -60% | | EPS | €0.41 | €1.02 | -60% | | Adjusted Net Profit | €207 million | €175 million | +18% | | Pro-forma Adjusted EPS | €1.10 | €0.93 | +18% | | Adjusted EBITDA | €483 million | €435 million | +11% | | Adjusted EBITDA Margin | 32.4% | 35.0% | -260 bps | | Cash Flow from Operations | €359 million | €234 million | +53% | Detailed Financial Analysis for Fiscal Year 2023 Revenue grew 20% to €1.492 billion, driven by unit and ASP increases, strong DTC channel performance, and robust operating cash flow Revenue and Channel Performance Revenue growth was driven by increased units and ASP, with DTC channel revenue growing 29% and reaching 40% of total revenue - Number of units sold increased by 6%[2] - Average Selling Price (ASP) increased by 14%[2] - The Direct-to-Consumer (DTC) channel showed strong performance, with revenue increasing by 29% on a constant currency basis. This led to DTC penetration expanding by 200 basis points to 40% of total revenue[2] Profitability and Earnings Net Profit decreased to €75 million, but Adjusted Net Profit grew to €207 million, and Adjusted EBITDA increased by 11% to €483 million | Profitability Metric | FY 2023 | FY 2022 | | :--- | :--- | :--- | | Net Profit | €75 million | €187 million | | Adjusted Net Profit | €207 million | €175 million | | EPS | €0.41 | €1.02 | | Pro-forma Adjusted EPS | €1.10 | €0.93 | | Adjusted EBITDA | €483 million | €435 million | | Adjusted EBITDA Margin | 32.4% | 35.0% | Cash Flow and Capital Structure Operating cash flow increased 53% to €359 million, fully covering €101 million in capex, and post-IPO debt repayment reduced net leverage below 2.5x - Cash flows from operating activities increased by 53% to €359 million, driven by strong operational performance and lower inventory buildup compared to FY 2022[4] - Capital expenditures of €101 million, primarily for production capacity expansion, were completely covered by operating cash flows[5] - Post-IPO, the company utilized proceeds and existing cash to repay USD 450 million and EUR 100 million of debt, reducing net leverage to below 2.5 times[5] Segment Performance All geographic segments reported double-digit constant currency revenue growth, with Americas at 20%, Europe at 18%, and APMA leading at 27% | Region | Reported Growth | Constant Currency Growth | | :--- | :--- | :--- | | Americas | 21% | 20% | | Europe | 18% | 18% | | APMA | 24% | 27% | - The APMA region's high growth was primarily driven by acceleration in the key strategic markets of China and India[6] Fourth Quarter (Q4) 2023 Performance Q4 2023 revenues grew 16% reported and 22% constant currency, with Americas B2B revenue surging 73% constant currency - Q4 2023 revenues grew by 16% on a reported basis and 22% on a constant currency basis compared to Q4 2022[7] - The Americas segment reported the highest growth in Q4, with B2B revenues in the region growing 61% (reported) and 73% (constant currency)[7] Fiscal Year 2024 Outlook FY2024 outlook projects revenues of €1.74-€1.76 billion (17-18% growth), Adjusted EBITDA of €520-€530 million (30% margin), and €150 million in capex | Metric | FY 2024 Guidance | | :--- | :--- | | Revenues (Constant Currency) | €1.74 billion to €1.76 billion (+17% to +18% YoY) | | Adjusted EBITDA (Constant Currency) | €520 million to €530 million | | Adjusted EBITDA Margin | Approximately 30% | | Capital Expenditure | Approximately €150 million | | Effective Tax Rate | Approximately 30% | - The Adjusted EBITDA margin is expected to face a modest headwind due to planned ramp-up costs and initial underabsorption at the new Pasewalk facility[10] Consolidated Financial Statements Consolidated Statements of Profit (Loss) Revenue grew to €1.492 billion, but net profit declined to €75 million due to higher operating expenses and €107 million in net finance costs | (In thousands of Euros) | Year ended Sep 30, 2023 | Year ended Sep 30, 2022 | | :--- | :--- | :--- | | Revenue | 1,491,911 | 1,242,833 | | Gross profit | 925,793 | 749,802 | | Profit from operations | 260,688 | 363,027 | | Finance cost, net | (107,036) | (112,503) | | Profit before tax | 153,652 | 250,524 | | Net profit | 75,022 | 187,111 | | EPS (Basic) | 0.41 | 1.02 | Consolidated Statements of Financial Position Total assets were €4.83 billion, with shareholders' equity at €2.40 billion and liabilities at €2.43 billion, including significant intangible assets | (In thousands of Euros) | September 30, 2023 | September 30, 2022 | | :--- | :--- | :--- | | Total non-current assets | 3,746,924 | 3,828,721 | | Total current assets | 1,080,546 | 959,906 | | Total assets | 4,827,470 | 4,788,627 | | Total shareholders' equity | 2,400,589 | 2,357,818 | | Total non-current liabilities | 2,048,300 | 2,106,843 | | Total current liabilities | 378,581 | 323,966 | | Total liabilities | 2,426,881 | 2,430,809 | Consolidated Statements of Cash Flows Operating cash flow increased to €359 million, while investing activities used €101 million and financing activities used €199 million | (In thousands of Euros) | Year ended Sep 30, 2023 | Year ended Sep 30, 2022 | | :--- | :--- | :--- | | Net cash from operating activities | 358,733 | 234,136 | | Net cash used in investing activities | (100,732) | (71,646) | | Net cash used in financing activities | (199,285) | (105,317) | | Net increase in cash | 58,716 | 57,173 | | Cash at end of period | 344,408 | 307,078 | Reconciliation of Non-IFRS Financial Measures Reconciliation of Revenue FY2023 total revenue grew 20% to €1.492 billion, with DTC channel growing 29% and APMA region leading with 27% constant currency growth | FY 2023 Revenue Growth vs FY 2022 | Growth (%) | Constant Currency Growth (%) | | :--- | :--- | :--- | | B2B Channel | 15% | 15% | | DTC Channel | 28% | 29% | | Total Revenue | 20% | 20% | | AMERICAS Region | 21% | 20% | | EUROPE Region | 18% | 18% | | APMA Region | 24% | 27% | Reconciliation of Net Profit (Adjusted) IFRS Net Profit of €75 million is adjusted for FX, IPO costs, and share-based compensation, resulting in an Adjusted Net Profit of €207 million | (In thousands of Euros) | Year ended Sep 30, 2023 | | :--- | :--- | | Net profit | 75,022 | | Add: Realized and unrealized FX losses | 36,056 | | Add: IPO-related costs | 30,603 | | Add: Share-based compensation | 65,394 | | Add: Other adjustments | 6,552 | | Less: Tax adjustment | (6,475) | | Net profit (Adjusted) | 207,152 | Reconciliation of EBITDA (Adjusted) Net Profit of €75 million is adjusted for tax, finance costs, D&A, and non-recurring items, yielding an Adjusted EBITDA of €483 million | (In thousands of Euros) | Year ended Sep 30, 2023 | | :--- | :--- | | Net profit | 75,022 | | Add: Income tax expense | 78,630 | | Add: Finance cost, net | 107,036 | | Add: Depreciation and amortization | 83,413 | | EBITDA | 344,101 | | Add: Adjustments (FX, IPO costs, etc.) | 138,605 | | Adjusted EBITDA | 482,706 | Reconciliation of Gross Profit (Adjusted) FY2023 reported Gross Profit of €926 million equals Adjusted Gross Profit, while FY2022 Adjusted Gross Profit was €774 million after adjustments - For fiscal year 2023, there were no adjustments to Gross Profit. Reported Gross Profit of €925.8 million equals Adjusted Gross Profit[27] - For fiscal year 2022, Gross Profit was adjusted by €24.4 million due to the accounting effect of the Transaction on inventory valuation, increasing Adjusted Gross Profit to €774.2 million[27]