Birkenstock plc(BIRK) - 2024 Q4 - Annual Report

Financial & Operational Highlights This section summarizes BIRKENSTOCK's strong fiscal 2024 performance, robust Q4 results, and positive outlook for fiscal 2025 Fiscal Year 2024 Performance Summary BIRKENSTOCK reported strong fiscal 2024 results, with revenue and Adjusted EBITDA exceeding guidance, driven by robust consumer demand across all segments and channels - Fiscal 2024 revenue growth of 21% (22% constant currency) exceeded the company's guidance of 20% Adjusted EBITDA margin of 30.8% also surpassed the targeted range of 30-30.5%[1] - Strong double-digit constant currency revenue growth was observed across all segments: Americas (19%), Europe (21%), and APMA (42%)[3] Fiscal Year 2024 Key Financial Metrics (vs. FY 2023) | Metric | FY 2024 | FY 2023 | Change | | :--- | :--- | :--- | :--- | | Revenue | EUR 1.8B | EUR 1.49B | +21% | | Gross Profit Margin | 58.8% | 62.1% | -330 bps | | Net Profit | EUR 192M | EUR 75M | +155% | | EPS | EUR 1.02 | EUR 0.41 | +149% | | Adjusted Net Profit | EUR 240M | EUR 207M | +16% | | Adjusted EPS | EUR 1.28 | EUR 1.13 | +13% | | Adjusted EBITDA | EUR 555M | EUR 483M | +15% | | Adjusted EBITDA Margin | 30.8% | - | - | Fourth Quarter (Q4) 2024 Performance Summary In Q4 2024, the company maintained strong momentum with revenue increasing by 22% to EUR 456 million and net profit significantly improving to EUR 52 million Q4 2024 Key Financial Metrics (vs. Q4 2023) | Metric | Q4 2024 | Q4 2023 | Change | | :--- | :--- | :--- | :--- | | Revenue | EUR 456M | EUR 375M | +22% | | Gross Profit Margin | 59.0% | 65.4% | -640 bps | | Net Profit / (Loss) | EUR 52M | EUR (28)M | N/A | | EPS | EUR 0.28 | EUR (0.15) | N/A | | Adjusted Net Profit | EUR 55M | EUR 25M | +118% | | Adjusted EPS | EUR 0.29 | EUR 0.14 | +107% | | Adjusted EBITDA | EUR 125M | EUR 96M | +31% | | Adjusted EBITDA Margin | 27.4% | 25.5% | +190 bps | - The significant 640 bps decline in Q4 gross margin was primarily due to a prior-year quarter that was elevated by non-cash adjustments (approx. 450 bps), with the remaining decline from under-absorption, channel mix, and currency impacts[5] Fiscal Year 2025 Guidance For fiscal year 2025, BIRKENSTOCK projects continued growth, forecasting a 15-17% increase in constant currency revenue and a slight expansion in Adjusted EBITDA margin FY 2025 Financial Outlook | Metric | Guidance | | :--- | :--- | | Revenue Growth (Constant Currency) | 15-17% | | Adjusted EBITDA Margin | 30.8% - 31.3% | | Gross Profit Margin | Improvement towards 60% | | Capital Expenditures | Approx. EUR 80M | | Effective Tax Rate | Approx. 30% | | Net Leverage Ratio Target | Approx. 1.5x | Detailed Performance Review (Fiscal 2024) This section provides an in-depth review of fiscal 2024 performance, detailing revenue drivers, channel and segment growth, and balance sheet improvements Revenue and Channel Performance Fiscal 2024 revenue of EUR 1.8 billion was driven by a 14% increase in pairs sold and an 8% rise in Average Selling Price, supported by a favorable product mix and strong growth across B2B and DTC channels - Top-line growth was driven by a 14% increase in pairs sold and an 8% increase in Average Selling Price (ASP) on a constant currency basis[6] - Sales of closed-toe silhouettes grew at over twice the group average, increasing their share of the business to approximately one-third[6] - B2B revenue grew 23% (constant currency), with over 90% of this growth from existing retail partners DTC revenue grew 21% (constant currency), maintaining a penetration rate of approximately 40% The company opened 20 new owned stores, bringing the total to 67[7] Segment Performance The company achieved broad-based, double-digit revenue growth across all geographic segments in fiscal 2024, with the APMA region leading with exceptional growth of 42% - Americas: Revenue grew 19% (constant currency), with particularly strong B2B performance driven by key wholesale partners expanding their offerings[8] - Europe: Revenue increased by 21% (constant currency), reflecting market-leading growth and share gains across the region in both B2B and DTC channels[9] - APMA: Achieved the highest growth with a 42% revenue increase (constant currency), fueled by expanded physical presence and new online stores in Singapore, Malaysia, and the Philippines[10] Capital Investment and Balance Sheet In fiscal 2024, BIRKENSTOCK invested EUR 74 million in capital expenditures, mainly to expand production capacity, and significantly strengthened its balance sheet by reducing net leverage to 1.8x - The company invested EUR 74 million in capital expenditures, primarily for expanding production capacity and its own-retail footprint[11] - Net leverage was reduced to 1.8x LTM EBITDA as of September 30, 2024, a significant improvement from the previous year[4][12][39] - The company made net repayments of EUR 662 million on outstanding loans during the fiscal year and ended with EUR 356 million in cash and cash equivalents[12][28] Corporate Updates This section outlines upcoming changes to the company's segment reporting structure effective fiscal year 2025 Change in Segment Reporting Effective from the first quarter of fiscal 2025, BIRKENSTOCK will modify its segment reporting structure, reconfiguring the APMA segment into new EMEA and APAC segments - The company is changing its segment reporting structure starting in Q1 FY2025[14] - The new reporting segments will be: EMEA (Europe combined with the Middle East and Africa), APAC (Asia Pacific countries combined with India), and Americas (no change)[15] - The company will issue a 6-K with a recast of fiscal 2024 and 2023 quarterly results to align with the new structure before the Q1 2025 earnings release[14] Financial Statements & Reconciliations This section presents the consolidated financial statements for fiscal 2024 and reconciliations of key non-IFRS financial measures Consolidated Statements of Profit Presents the company's revenues, costs, and profits for fiscal year 2024 and the fourth quarter of 2024, with comparisons to the corresponding prior-year periods Consolidated Statements of Profit (In thousands of Euros) | | Year ended Sep 30, 2024 | Year ended Sep 30, 2023 | Three months ended Sep 30, 2024 | Three months ended Sep 30, 2023 | | :--- | :--- | :--- | :--- | :--- | | Revenue | 1,804,690 | 1,491,911 | 455,764 | 374,543 | | Gross profit | 1,060,677 | 925,793 | 268,724 | 244,957 | | Profit (loss) from operations | 421,082 | 260,688 | 97,529 | 25,107 | | Net profit (loss) | 191,602 | 75,022 | 52,465 | (28,287) | | EPS Basic | 1.02 | 0.41 | 0.28 | (0.15) | Consolidated Statements of Financial Position Details the company's assets, liabilities, and shareholders' equity as of September 30, 2024, compared to the prior year, showing stable total assets and decreased total liabilities Condensed Consolidated Statements of Financial Position (In thousands of Euros) | | September 30, 2024 | September 30, 2023 | | :--- | :--- | :--- | | Total assets | 4,884,939 | 4,827,470 | | Total non-current assets | 3,721,659 | 3,746,924 | | Total current assets | 1,163,280 | 1,080,546 | | Total liabilities | 2,259,920 | 2,426,882 | | Total non-current liabilities | 1,812,027 | 2,048,300 | | Total current liabilities | 447,893 | 378,582 | | Total shareholders' equity | 2,625,019 | 2,400,588 | Consolidated Statements of Cash Flows Outlines cash flows from operating, investing, and financing activities for fiscal 2024, showing increased net cash from operating activities and significant financing outflows due to loan repayments Consolidated Statements of Cash Flows (In thousands of Euros) | | Year ended Sep 30, 2024 | Year ended Sep 30, 2023 | | :--- | :--- | :--- | | Net cash flows provided by operating activities | 428,701 | 358,733 | | Net cash flows (used in) investing activities | (58,796) | (100,733) | | Net cash flows (used in) financing activities | (355,045) | (199,285) | | Net increase (decrease) in cash | 14,860 | 58,715 | | Cash and cash equivalents at end of period | 355,843 | 344,407 | Reconciliation of Non-IFRS Measures This section provides reconciliations from IFRS measures to the non-IFRS measures used by management for performance evaluation, including detailed breakdowns for constant currency revenue, Adjusted Net Profit, Adjusted EBITDA, and Net Leverage Revenue Reconciliation FY 2024 Revenue by Channel & Segment (Constant Currency Growth) | Category | Revenue (EUR M) | Constant Currency Growth | | :--- | :--- | :--- | | By Channel | | | | B2B | 1,083.7 | 23% | | DTC | 716.7 | 21% | | By Segment | | | | Americas | 943.7 | 19% | | Europe | 644.9 | 21% | | APMA | 211.8 | 42% | | Total Revenue | 1,804.7 | 22% | Adjusted Net Profit Reconciliation Reconciliation of Net Profit to Adjusted Net Profit (In thousands of Euros) | | Year ended Sep 30, 2024 | Year ended Sep 30, 2023 | | :--- | :--- | :--- | | Net profit (loss) | 191,602 | 75,022 | | Share-based compensation | 3,591 | 65,393 | | IPO-related costs | 7,460 | 30,603 | | Realized and unrealized FX gains / losses | 19,641 | 36,056 | | Release of capitalized transaction costs | 26,858 | - | | Other Adjustments | (9,821) | (1,220) | | Adjusted Net profit (loss) | 240,331 | 207,153 | Adjusted EBITDA & Net Leverage Reconciliation Reconciliation of Net Profit to Adjusted EBITDA (In thousands of Euros) | | Year ended Sep 30, 2024 | Year ended Sep 30, 2023 | | :--- | :--- | :--- | | Net profit (loss) | 191,602 | 75,022 | | Income tax expense | 102,180 | 78,630 | | Finance cost, net | 127,300 | 107,036 | | Depreciation and amortization | 101,291 | 83,413 | | EBITDA | 522,373 | 344,101 | | Adjustments | 32,582 | 138,605 | | Adjusted EBITDA | 554,955 | 482,706 | Net Leverage Calculation | | Sep 30, 2024 | Sep 30, 2023 | | :--- | :--- | :--- | | Net debt (EUR M) | 1,006.1 | 1,608.7 | | Adjusted EBITDA (LTM, EUR M) | 555.0 | 482.7 | | Net leverage | 1.8x | 3.3x | Supplementary Information This section provides important disclaimers regarding forward-looking statements, explanations of non-IFRS measures, and details for the upcoming earnings conference call Forward-Looking Statements & Non-IFRS Disclosures This section contains standard cautionary language regarding forward-looking statements and explains the company's use of non-IFRS financial measures for performance assessment - The press release contains forward-looking statements, including the fiscal 2025 outlook, which are subject to various risks and uncertainties[19] - The company uses non-IFRS measures like Adjusted EBITDA, Constant Currency Revenue, and Adjusted Net Profit because management believes they reflect underlying trends and are useful for performance evaluation[21] Conference Call Information BIRKENSTOCK will host a conference call and webcast on December 18, 2024, at 8:00 a.m. Eastern Time to discuss the fiscal 2024 results - A conference call to discuss fiscal 2024 results is scheduled for December 18, 2024, at 8:00 a.m. Eastern Time[16]