Global Blue AG(GB) - 2024 Q3 - Quarterly Report

General Information Report Overview and Legal Disclosures This Form 6-K report presents Global Blue Group Holding AG's interim financial results for the three and nine months ended December 31, 2023, including standard legal disclosures - The report is Global Blue Group Holding AG's interim report for the three and nine months ended December 31, 2023[4] - The report is incorporated by reference into the company's registration statements on Form F-3 and Form S-8[6] - The report was signed by Jacques Stern, Chief Executive Officer, on February 23, 2024[9] Forward-Looking Statements This section cautions readers that the report contains forward-looking statements, subject to uncertainties that could cause actual results to differ materially - The report contains forward-looking statements that are subject to numerous uncertainties and factors beyond the company's control, which could cause actual results to differ materially[11] - Readers are cautioned not to place undue reliance on these statements, which speak only as of the report date[13] - The company does not undertake any obligation to update or revise forward-looking statements, except as required by law[13] Management's Discussion and Analysis of Financial Condition and Results of Operations (MD&A) Business Overview Global Blue operates as a strategic technology and payments partner for merchants, specializing in Tax Free Shopping, Added Value Payments, and Retail Tech Solutions, experiencing significant recovery from the COVID-19 pandemic - Global Blue serves as a strategic technology and payments partner to merchants, offering Tax Free Shopping (TFSS), Added Value Payments Solutions (AVPS), and Retail Tech Solutions (RTS)[16][17] - The business has experienced a continued recovery from the COVID-19 outbreak, with China lifting its zero-COVID-19 policy in early 2023, leading to a gradual recovery of Chinese travelers in Europe[18][25][27] Company Profile and Segments Global Blue is a global leader in Tax Free Shopping and a leading provider of Added Value Payments Solutions, also offering Retail Tech Solutions across three reporting segments - Global Blue is a global leader in Tax Free Shopping Solutions (TFSS) and a leading provider of Added Value Payments Solutions (AVPS), including Dynamic Currency Conversion (DCC)[16] - The company also offers Retail Tech Solutions (RTS), encompassing an e-commerce returns platform, eReceipts, and a post-purchase technology platform[16] - Global Blue's business is separated into three reporting segments: TFSS, AVPS, and RTS[17] COVID-19 Impact and Recovery COVID-19 severely impacted Global Blue's revenue, but international travel has gradually reopened, with Chinese traveler sales in Europe reaching 59% of pre-pandemic levels by December 2023 - COVID-19 negatively impacted Global Blue's business, with revenue declining 89.4% in FY2021[18] - International travel has gradually reopened, with Southeast Asia and China (early January 2023) being the last to recover[18] - Sales in Store (SiS) for Chinese travelers in Europe reached 59% of December 2019 levels by December 2023[18] Key Performance Indicators (KPIs) - Sales in Store (SiS) Global Blue monitors Sales in Store (SiS) as a key performance indicator, directly linked to revenue, showing significant increases across all segments for the three months ended December 31, 2023 - Global Blue monitors Sales in Store (SiS) as a key performance indicator, which has a direct link to the Group's revenue performance[19][23] Sales in Store (SiS) Performance (EUR billions) | Segment | Three Months Ended Dec 31, 2023 | Three Months Ended Dec 31, 2022 | Three Months Ended Dec 31, 2021 | Nine Months Ended Dec 31, 2023 | Nine Months Ended Dec 31, 2022 | Nine Months Ended Dec 31, 2021 | | :------ | :------------------------------ | :------------------------------ | :------------------------------ | :----------------------------- | :----------------------------- | :----------------------------- | | TFSS SiS | 5.1 | 3.9 | 1.5 | 14.7 | 9.5 | 3.0 | | AVPS SiS | 1.6 | 1.4 | 0.5 | 4.7 | 3.8 | 1.5 | | RTS SiS | 1.0 | 0.5 | 0.4 | 1.8 | 1.3 | 0.9 | | Total SiS| 7.7 | 5.8 | 2.4 | 21.2 | 14.7 | 5.4 | - TFSS SiS increased by 33.2% to EUR5.1 billion for the three months ended December 31, 2023, driven by continued recovery from COVID-19[24][25][27] - AVPS SiS increased by 12.8% to EUR1.6 billion for the three months ended December 31, 2023, due to resumed international travel and new business[28][29] - RTS SiS increased by 90.6% to EUR1.0 billion for the three months ended December 31, 2023, mainly due to ZigZag's merchant base expansion[30][31] Results of Operations Global Blue reported significant improvements in financial performance for the three and nine months ended December 31, 2023, driven by travel and tourism recovery, leading to increased revenue, operating profit, and Adjusted EBITDA Key Income Statement Data (EUR millions) | Metric | 3 Months Ended Dec 31, 2023 | 3 Months Ended Dec 31, 2022 | 9 Months Ended Dec 31, 2023 | 9 Months Ended Dec 31, 2022 | | :---------------------- | :-------------------------- | :-------------------------- | :-------------------------- | :-------------------------- | | Total revenue | 109.4 | 86.7 | 317.1 | 224.7 | | Operating profit/(loss) | 35.5 | 9.2 | 84.4 | 4.3 | | Profit/(Loss) for period| 14.9 | 1.4 | 26.3 | (24.6) | - The increased profit for the period is mainly due to the recovery of the business, particularly the travel and tourism sector[74][75] Total Revenue Total revenue increased significantly for both the three and nine months ended December 31, 2023, driven by strong growth across all segments, reflecting tourism recovery and business expansion - Total revenue increased by 26.2% to EUR109.4 million for the three months ended December 31, 2023, and by 41.1% to EUR317.1 million for the nine months, driven by increases across all segments[36] - TFSS revenue increased by 24.8% to EUR80.3 million (3 months) and 41.3% to EUR235.2 million (9 months), reflecting tourism recovery[37] - AVPS revenue increased by 37.4% to EUR22.3 million (3 months) and 38.9% to EUR61.3 million (9 months), growing faster than AVPS SiS due to slower growth in margin-dilutive payments processing[38][39] - RTS revenue increased by 11.6% to EUR6.8 million (3 months) and 45.7% to EUR20.6 million (9 months), due to merchant base expansion and incremental revenues from Yocuda and ShipUp acquisitions[40] Operating Expenses Total operating expenses decreased for the three months but increased for the nine months ended December 31, 2023, influenced by exceptional items and higher adjusted operating expenses Total Operating Expenses (EUR millions) | Metric | 3 Months Ended Dec 31, 2023 | 3 Months Ended Dec 31, 2022 | 9 Months Ended Dec 31, 2023 | 9 Months Ended Dec 31, 2022 | | :---------------------------------------------------------------- | :-------------------------- | :-------------------------- | :-------------------------- | :-------------------------- | | Total operating expenses | (73.9) | (77.5) | (232.7) | (220.4) | | Adjusted operating expenses (excluding exceptional items, D&A) | (69.7) | (62.6) | (202.3) | (168.0) | | Variable adjusted operating expenses | (25.3) | (22.1) | (73.5) | (56.8) | | Fixed adjusted operating expenses | (44.3) | (40.5) | (128.9) | (111.2) | - Total operating expenses decreased by 4.6% to EUR(73.9) million for the three months ended December 31, 2023, mainly due to exceptional items' income, partially offset by increased adjusted operating expenses[42] - Total operating expenses increased by 5.6% to EUR(232.7) million for the nine months ended December 31, 2023, driven by higher adjusted operating expenses, partially offset by lower amortization of intangible assets[44] Depreciation and Amortization Depreciation and amortization increased for the three months ended December 31, 2023, while amortization of intangible assets from business combinations significantly decreased for the nine-month period - Depreciation and amortization increased by 5.0% to EUR10.8 million for the three months ended December 31, 2023, mainly due to other depreciation and amortization[45] - Amortization of intangible assets acquired through business combinations decreased significantly by 75.4% to EUR3.3 million for the nine months ended December 31, 2023, as certain assets reached the end of their useful lives, partially offset by new RTS segment assets[48] Exceptional Items Exceptional items resulted in a benefit for the three months ended December 31, 2023, primarily due to a gain from changes in fair value of warrants and put options, while the nine-month period showed a slight expense Exceptional Items (EUR millions) | Item | 3 Months Ended Dec 31, 2023 | 3 Months Ended Dec 31, 2022 | 9 Months Ended Dec 31, 2023 | 9 Months Ended Dec 31, 2022 | | :------------------------------------ | :-------------------------- | :-------------------------- | :-------------------------- | :-------------------------- | | Business restructuring expenses | (0.1) | (0.3) | (0.2) | (4.2) | | Corporate restructuring expenses | (4.5) | (1.8) | (4.8) | (2.3) | | Share based payments | 1.1 | (1.6) | (2.5) | (7.4) | | Change in fair value of warrants & put options | 10.8 | (0.5) | 10.0 | 4.5 | | Total Exceptional Items | 6.5 | (4.6) | 0.5 | (11.9) | - Exceptional items resulted in a benefit of EUR6.5 million for the three months ended December 31, 2023, primarily due to a EUR10.8 million gain from changes in fair value of warrants and put options, offset by corporate restructuring expenses and share-based payments[54] - For the nine months, exceptional items were an expense of EUR0.5 million, mainly from share-based payments and corporate restructuring, offset by a EUR10.0 million benefit from warrants and put options[57][58] Adjusted Operating Expenses Adjusted operating expenses increased for both the three and nine months ended December 31, 2023, driven by higher transaction volumes, inflation, public company costs, and RTS segment expansion - Adjusted operating expenses (excluding exceptional items, depreciation, and amortization) increased by 11.2% to EUR(69.7) million for the three months and 20.4% to EUR(202.3) million for the nine months ended December 31, 2023[61] - Variable adjusted operating expenses increased by 14.6% (3 months) and 29.4% (9 months), mainly due to increased transaction volumes[62] - Fixed adjusted operating expenses increased by 9.4% (3 months) and 15.9% (9 months), driven by inflation, public company costs, and incremental RTS segment costs[63][64] Net Finance Costs Net finance costs significantly increased for both the three and nine months ended December 31, 2023, primarily due to higher interest rates and costs associated with debt repayment - Net finance costs increased by 221.6% to EUR12.0 million for the three months ended December 31, 2023, and by 32.7% to EUR36.6 million for the nine months[66][67] - The increase is primarily due to higher interest rates and costs related to repaying old credit facilities, partially offset by more favorable FX rates for the nine-month period[66][67][68] Income Tax Benefit/(Expense) Income tax expense increased for both the three and nine months ended December 31, 2023, reflecting improved earnings before tax and updated deferred tax estimates - Income tax expense increased to EUR8.6 million for the three months ended December 31, 2023 (from EUR4.0 million expense in 2022), and to EUR21.5 million for the nine months (from EUR1.4 million expense in 2022)[69][71] - This increase is linked to improvements in earnings before tax and the impact from updated estimates of deferred tax related to amortization of intangible assets from past business combinations[69][70][71][73] Profit/(Loss) for the Period Profit for the period significantly improved for both the three and nine months ended December 31, 2023, driven by the overall recovery of the business - Profit for the period significantly improved to EUR14.9 million for the three months ended December 31, 2023 (from EUR1.4 million profit in 2022), and to EUR26.3 million for the nine months (from EUR24.6 million loss in 2022)[74] - The increased profit is mainly due to the recovery of the business[74] Adjusted EBITDA Adjusted EBITDA significantly increased for both the three and nine months ended December 31, 2023, driven by revenue growth from the recovering travel and tourism sector Adjusted EBITDA (EUR millions) | Metric | 3 Months Ended Dec 31, 2023 | 3 Months Ended Dec 31, 2022 | 9 Months Ended Dec 31, 2023 | 9 Months Ended Dec 31, 2022 | | :-------------------- | :-------------------------- | :-------------------------- | :-------------------------- | :-------------------------- | | Adjusted EBITDA | 39.8 | 24.1 | 114.7 | 56.7 | | Adjusted EBITDA margin (%) | 36.3 % | 27.8 % | 36.2 % | 25.2 % | - Adjusted EBITDA increased by 65.2% to EUR39.8 million for the three months and by 102.3% to EUR114.7 million for the nine months ended December 31, 2023[75] - This performance is driven by increased revenue linked to the recovery of the travel and tourism sector, partially offset by lower savings on adjusted operating expenses[75] Adjusted EBITDA by Segment (EUR millions) | Segment | 3 Months Ended Dec 31, 2023 | 3 Months Ended Dec 31, 2022 | 9 Months Ended Dec 31, 2023 | 9 Months Ended Dec 31, 2022 | | :---------------- | :-------------------------- | :-------------------------- | :-------------------------- | :-------------------------- | | TFSS Adjusted EBITDA | 51.4 | 40.3 | 150.3 | 99.3 | | AVPS Adjusted EBITDA | 10.4 | 6.5 | 30.5 | 19.8 | | RTS Adjusted EBITDA | (1.0) | (2.2) | (4.4) | (3.8) | | Central costs | (21.0) | (20.6) | (61.7) | (58.6) | Adjusted Net Income/(Loss) (Group Share) Adjusted Net Income (Group Share) significantly improved for both the three and nine months ended December 31, 2023, reflecting a return to profitability Adjusted Net Income/(Loss) (Group Share) (EUR millions) | Metric | 3 Months Ended Dec 31, 2023 | 3 Months Ended Dec 31, 2022 | 9 Months Ended Dec 31, 2023 | 9 Months Ended Dec 31, 2022 | | :------------------------------------ | :-------------------------- | :-------------------------- | :-------------------------- | :-------------------------- | | Profit/(loss) attributable to owners of the parent | 12.9 | 0.6 | 20.7 | (26.3) | | Adjusted net income/(loss) (Group share) | 9.1 | 6.6 | 25.3 | (7.1) | - Adjusted Net Income (Group Share) improved by 38.7% to EUR9.1 million profit for the three months and by 457.7% to EUR25.3 million profit for the nine months ended December 31, 2023[78][79] Adjusted Effective Tax Rate The Adjusted effective tax rate increased for the three months but decreased for the nine months ended December 31, 2023, influenced by capped interest deductibility and jurisdictional tax rate weighting Adjusted Effective Tax Rate (%) | Metric | 3 Months Ended Dec 31, 2023 | 3 Months Ended Dec 31, 2022 | 9 Months Ended Dec 31, 2023 | 9 Months Ended Dec 31, 2022 | | :-------------------------- | :-------------------------- | :-------------------------- | :-------------------------- | :-------------------------- | | Effective tax rate (%) | 36.8 % | 73.9 % | 45.0 % | (6.0)% | | Adjusted effective tax rate (%) | 38.9 % | 33.4 % | 38.8 % | 352.9 % | - The Adjusted effective tax rate was 38.9% for the three months ended December 31, 2023, up from 33.4% in 2022, mainly due to capped interest deductibility and changes in the weighting of jurisdictions with different tax rates[82] - For the nine months, the Adjusted effective tax rate was 38.8%, down from 352.9% in 2022, with similar drivers related to interest deductibility and jurisdictional weighting, which had a higher impact on the lower group profit in the prior year[83] Liquidity and Capital Resources Global Blue's liquidity is primarily derived from operating activities, cash reserves, and revolving credit facilities, with a net working capital inflow for the nine months ended December 31, 2023, indicating sufficient resources for the next 12 months - Principal sources of liquidity include cash flow from operating activities, cash and cash equivalents, and available revolving credit facilities and bank overdrafts[86] - As of December 31, 2023, the Group had EUR101.4 million in cash and cash equivalents and additional available liquidity of EUR100.9 million (EUR3.5 million local credit lines + EUR97.5 million RCF availability)[91] - The Group believes its cash and cash equivalents are sufficient to meet liquidity needs and fund capital expenditure for at least the next 12 months[94] Liquidity Overview Liquidity is defined as the ability to generate sufficient cash flows for business operations, primarily from VAT refunds, with seasonal variations impacting working capital needs - Liquidity is defined as the ability to generate sufficient cash flows to meet business operations' cash requirements[86] - Cash flow from operating activities is primarily generated from VAT refunds, which involves initial cash outflow followed by VAT collection and merchant revenue share payments[87] - The company experiences cash flow seasonality, with larger net working capital needs during the summer months due to increased international travel[87] Cash Flow Analysis Net cash from operating activities significantly improved for the nine months ended December 31, 2023, while net cash used in financing activities increased due to debt repayments, leading to an overall decrease in cash and cash equivalents Consolidated Cash Flows (EUR millions) | Cash Flow Type | 9 Months Ended Dec 31, 2023 | 9 Months Ended Dec 31, 2022 | 9 Months Ended Dec 31, 2021 | | :-------------------------------- | :-------------------------- | :-------------------------- | :-------------------------- | | Net cash from/(used in) operating activities | 101.1 | (6.2) | (66.6) | | Net cash from/(used in) investing activities | (26.2) | (59.2) | (19.8) | | Net cash from/(used in) financing activities | (215.0) | 245.4 | (9.8) | | Net increase/(decrease) in cash and cash equivalents | (139.1) | 181.5 | (94.9) | | Cash and cash equivalents at end of year | 101.4 | 232.9 | 89.1 | - Net cash from operating activities was EUR101.1 million for the nine months ended December 31, 2023, primarily due to profit generated and Adjusted EBITDA of EUR114.7 million[96] - Net cash used in investing activities was EUR26.2 million, mainly for capitalized intangible assets, property, plant, and equipment, and acquisition of non-current financial assets[99] - Net cash used in financing activities was EUR215.0 million, driven by repayment of loans and borrowings (EUR630.0 million) and revolving credit facility (EUR99.0 million), offset by proceeds from new loans (EUR610.0 million) and share capital issuance (EUR45.7 million)[103] Net Working Capital Net working capital is sensitive to TFSS volume movements, with Global Blue recording a net inflow of EUR6.1 million for the nine months ended December 31, 2023, contrasting with a prior year outflow - Net working capital is sensitive to short-term volume movements in the TFSS business, driven by the timing of payments to merchants/shoppers and receipts from merchants/tax authorities[107] - Global Blue recorded a net working capital inflow of EUR6.1 million for the nine months ended December 31, 2023, due to an increase in merchant commission payables, mainly in Italy and Japan[112] - In contrast, the prior year (9 months ended Dec 31, 2022) saw an outflow of EUR43.1 million, reflecting increased trade receivables from higher TFS refunding activity during the COVID-19 recovery[113] Capital Expenditure Capital expenditure, including purchases of property, plant, equipment, and intangible assets, increased by 21.2% for the nine months ended December 31, 2023, primarily due to capitalized intangible assets - Capital expenditure includes purchases of property, plant and equipment, and intangible assets[115] - Capital expenditure increased by 21.2% to EUR27.9 million for the nine months ended December 31, 2023, primarily due to EUR7.0 million in payments for capitalized intangible assets[116] Banking Facilities and Loans Global Blue refinanced its debt with a new Senior Facilities Agreement on November 24, 2023, comprising a EUR610 million term loan and a EUR97.5 million revolving credit facility, used to repay previous debt - On November 24, 2023, Global Blue entered into a new Senior Facilities Agreement (SFA) for a EUR610 million term loan (Facility B) and a EUR97.5 million multicurrency revolving credit facility (RCF)[119] - The Facility B was fully drawn on December 5, 2023, and its proceeds, along with available cash, were used to fully repay the Group's previous senior secured term loan and revolver facilities[121][123] - The Supplemental Liquidity Facility (SLF) of USD75.0 million was fully repaid on December 15, 2023[122][237] Overview and Structure The new Senior Facilities Agreement includes a EUR610 million term loan and a EUR97.5 million multicurrency revolving credit facility, with a swingline sub-facility for Euro-denominated loans - The new Senior Facilities Agreement includes a EUR610 million term loan (Facility B) and a EUR97.5 million multicurrency revolving credit facility (RCF)[119] - The RCF includes a swingline sub-facility allowing up to EUR20 million in Euro-denominated swingline loans[120] Maturity and Prepayment Facility B is a seven-year bullet loan maturing on December 5, 2030, while the Revolving Facility will mature six and a half years after the Closing Date, on June 5, 2030 - Facility B is a seven-year bullet loan maturing on December 5, 2030[124] - The Revolving Facility (RCF) will mature six and a half years after the Closing Date, on June 5, 2030[124] Interest Rates Borrowings under Facility B and the Revolving Facility bear interest at EURIBOR plus an applicable margin, reducible based on the Senior Secured Net Leverage Ratio, with 50% of Facility B fixed via an Interest Rate Swap - Borrowings under Facility B bear interest at EURIBOR plus an applicable margin of up to 5.00%, reducible based on the Senior Secured Net Leverage Ratio (SSNLR)[125] Term Loan Margin based on Company's Leverage | Company's Leverage | Term Loan Margin | | :----------------- | :--------------- | | > 3.30:1 | 5.00% | | ≤ 3.30:1 but > 2.80:1 | 4.75% | | ≤ 2.80:1 | 4.50% | - Borrowings under the Revolving Facility bear interest at EURIBOR plus an applicable margin of up to 4.50%, also reducible based on SSNLR[127] - On December 21, 2023, Global Blue entered into an Interest Rate Swap for 50% of Facility B (EUR305.0 million) for two years, fixing the floating rate at 2.778% from January 5, 2024[131] Main Undertakings and Covenants The Facilities Agreement includes covenants restricting Global Blue to permitted activities and requiring information undertakings, with a quarterly leverage ratio test starting December 31, 2024 - The Facilities Agreement includes covenants restricting Global Blue to permitted activities and requiring general and specific information undertakings to lenders[132] - Key undertakings include annual and quarterly reporting, quarterly compliance with a leverage ratio test starting December 31, 2024, and prohibitions on substantial business changes or disposals[132] Guarantees and Collateral The new facilities are guaranteed by Global Blue and certain subsidiaries, secured by first-priority pledges on assets of material subsidiaries, including shares, trade receivables, and cash - The facilities are guaranteed by Global Blue and certain other members, based on a guarantor coverage test, with undertakings being joint and several[134][135] - The facilities are secured by first-priority pledges on the assets of certain material subsidiaries until April 2030, including shares, trade receivables, and cash[136][235][236] Indebtedness Summary Total interest-bearing loans and borrowings decreased significantly to EUR588.3 million as of December 31, 2023, following the refinancing of previous debt facilities Total Interest-Bearing Loans and Borrowings (EUR millions) | Metric | As of Dec 31, 2023 | As of Mar 31, 2023 | As of Mar 31, 2022 | | :------------------------------------ | :----------------- | :----------------- | :----------------- | | Non-current financing—term senior debt | 610.0 | — | — | | Non-current financing—senior debt facility | — | 630.0 | 630.0 | | Capitalized financing fees | (24.5) | (4.7) | (6.4) | | Revolving credit facility | — | 99.0 | 99.0 | | Supplemental liquidity facility | — | 61.3 | — | | Other bank loans | 2.8 | 3.2 | — | | Total interest-bearing loans and borrowings | 588.3 | 788.8 | 723.2 | - Total interest-bearing loans and borrowings decreased to EUR588.3 million as of December 31, 2023, from EUR788.8 million as of March 31, 2023, following the refinancing[238] Treasury Management Global Blue's Treasury department centrally manages cash, monitors forecasts for liquidity, and minimizes foreign exchange risks using financial derivatives, having fully repaid its Supplemental Liquidity Facility - Group treasury centrally manages cash, monitoring weekly forecasts to ensure liquidity and minimize foreign exchange risks using financial derivatives[141][142][143] - Approximately EUR3.0 million of cash and cash equivalents are held in subsidiaries with cash centralization restrictions, but this does not significantly impact the company's ability to meet obligations[144] - Local credit facilities amounted to EUR3.5 million as of December 31, 2023, none of which are committed[145] - The Supplemental Liquidity Facility (SLF) of USD75.0 million was fully repaid on December 15, 2023, including capitalized interests of EUR62.4 million[146][147] Unaudited Condensed Consolidated Interim Financial Statements Consolidated Statements of Financial Position The consolidated statement of financial position shows a decrease in total assets and liabilities, alongside a significant increase in total equity, primarily due to profit and share capital issuance Key Financial Position Data (EUR thousand) | Metric | As of Dec 31, 2023 | As of Mar 31, 2023 | | :-------------------------- | :----------------- | :----------------- | | Total assets | 1,080,290 | 1,157,296 | | Total equity | 71,634 | 6,343 | | Total liabilities | 1,008,656 | 1,150,953 | | Cash and cash equivalents | 101,416 | 240,546 | | Loans and borrowings (non-current) | 587,576 | 726,891 | | Loans and borrowings (current) | 724 | 61,945 | - Total equity significantly increased from EUR6,343 thousand to EUR71,634 thousand, mainly due to profit for the period and issuance of share capital[151][161] Consolidated Income Statements The consolidated income statements reflect a strong recovery, with total revenue increasing significantly and the company returning to profitability for both the three and nine months ended December 31, 2023 Key Income Statement Data (EUR thousand) | Metric | 3 Months Ended Dec 31, 2023 | 3 Months Ended Dec 31, 2022 | 9 Months Ended Dec 31, 2023 | 9 Months Ended Dec 31, 2022 | | :-------------------------- | :-------------------------- | :-------------------------- | :-------------------------- | :-------------------------- | | Total revenue | 109,406 | 86,685 | 317,065 | 224,713 | | Operating profit | 35,500 | 9,201 | 84,362 | 4,321 | | Profit / (Loss) before tax | 23,502 | 5,470 | 47,788 | (23,241) | | Profit / (Loss) for the period | 14,854 | 1,429 | 26,299 | (24,644) | | Basic earnings / (loss) per ordinary share | 0.06 | 0.00 | 0.09 | (0.12) | - Total revenue for the nine months ended December 31, 2023, increased by 41.1% to EUR317,065 thousand from EUR224,713 thousand in the prior year[154] - The company achieved a profit of EUR26,299 thousand for the nine months ended December 31, 2023, a significant improvement from a loss of EUR24,644 thousand in the same period of 2022[154] Consolidated Statements of Comprehensive Income / (Loss) The consolidated statements of comprehensive income show a positive total comprehensive income for the three and nine months ended December 31, 2023, reversing prior year losses, primarily driven by the profit for the period Total Comprehensive Income / (Loss) (EUR thousand) | Metric | 3 Months Ended Dec 31, 2023 | 3 Months Ended Dec 31, 2022 | 9 Months Ended Dec 31, 2023 | 9 Months Ended Dec 31, 2022 | | :------------------------------------ | :-------------------------- | :-------------------------- | :-------------------------- | :-------------------------- | | Profit / (Loss) for the period | 14,854 | 1,429 | 26,299 | (24,644) | | Other comprehensive income / (loss) for the period, net of tax | (3,614) | (1,389) | (2,461) | (450) | | Total comprehensive income / (loss) for the period | 11,240 | 40 | 23,838 | (25,094) | - Total comprehensive income for the nine months ended December 31, 2023, was EUR23,838 thousand, a substantial improvement from a loss of EUR25,094 thousand in the prior year[156] Consolidated Statements of Cash Flows The consolidated statements of cash flows show a significant shift to cash generated from operating activities, but increased net cash used in financing activities led to an overall decrease in cash and cash equivalents Key Cash Flow Data (EUR thousand) | Metric | 9 Months Ended Dec 31, 2023 | 9 Months Ended Dec 31, 2022 | | :------------------------------------ | :-------------------------- | :-------------------------- | | Net cash from / (used in) operating activities | 101,050 | (6,216) | | Net cash used in investing activities | (26,210) | (59,242) | | Net cash from / (used in) financing activities | (214,966) | 245,430 | | Net increase / (decrease) in cash and cash equivalents | (139,130) | 181,543 | | Cash and cash equivalents at end of the period | 101,416 | 232,857 | - Net cash from operating activities improved significantly to EUR101,050 thousand for the nine months ended December 31, 2023, from a net cash outflow of EUR6,216 thousand in the prior year[159] - Net cash used in financing activities was EUR214,966 thousand, primarily due to loan repayments, despite proceeds from new loans and share capital issuance[103][159] Consolidated Statements of Changes in Equity The consolidated statements of changes in equity show a substantial increase in total equity, driven by profit for the period and the issuance of new share capital Key Equity Changes (EUR thousand) | Metric | As of Dec 31, 2023 | As of Apr 1, 2023 | | :-------------------------- | :----------------- | :---------------- | | Total equity | 71,634 | 6,343 | | Profit for the period | 20,657 | - | | Issuance of share capital | 42,533 | - | | Total contributions and distributions | 44,654 | - | - Total equity increased from EUR6,343 thousand as of April 1, 2023, to EUR71,634 thousand as of December 31, 2023[161] - This increase was primarily due to the profit for the period (EUR20,657 thousand) and the issuance of share capital (EUR42,533 thousand)[161] Notes to the Unaudited Condensed Consolidated Interim Financial Statements Corporate Information Global Blue Group Holding AG provides technology-enabled transaction processing services, listed on NYSE under 'GB', with Silver Lake Partners, L.P. as its ultimate parent - Global Blue provides technology-enabled transaction processing services, including Tax Free Shopping Solutions (TFSS), Added-Value Payment Solutions (AVPS), and Retail Tech Solutions (RTS)[166] - The company is listed on NYSE under the ticker symbol 'GB'[167] - Silver Lake Partners, L.P. is the ultimate parent and controlling party of the Group[167] Basis of Preparation and Significant Accounting Policies The interim financial statements are prepared under IAS 34 on a historical cost basis, with certain financial instruments at fair value, and cash flow reclassifications for interest, with no significant policy changes - The unaudited condensed consolidated interim financial statements are prepared in accordance with IAS 34 'Interim financial reporting'[168][169] - Financial statements are prepared on a historical cost basis, except for warrants, derivative financial instruments, other investments, and put options measured at fair value[169] - Cash flows related to interest paid and received were reclassified from operating activities to financing and investing activities, respectively, for improved relevance[171][172] - No changes to accounting policies or retrospective adjustments were required due to new or amended standards in the current reporting period[173] Significant Changes in Current Reporting Period Global Blue maintained its merchant base, with TFSS exhibiting predictable seasonality, AVPS being more stable, and RTS segments showing year-end peaks, while operations continue to recover from COVID-19 impacts - The company maintained a similar level of material merchants and acquirers compared to March 31, 2023[174] - TFSS business is subject to predictable seasonality, with increased working capital needs during the northern hemisphere's summer holiday season[175][176] - AVPS business is less exposed to seasonal variations, while RTS segments (ZigZag Global, ShipUp) have a seasonal curve skewed towards November and December due to Black Friday, Cyber Monday, and Christmas[176][177] - TFSS and AVPS transaction volumes significantly recovered during the three and nine months ended December 31, 2023, compared to the prior year, despite ongoing impacts from reduced airline capacity for China[178] Segment Information Global Blue's operating segments (TFSS, AVPS, RTS) are reviewed by the Executive Committee based on Revenue and Adjusted EBITDA, with all segments showing revenue growth and improved Adjusted EBITDA for the nine months ended December 31, 2023 - Operating segments are determined based on reports reviewed by the Executive Committee (ExCom) for resource allocation and performance assessment[180] - Performance is assessed based on Revenue and Adjusted EBITDA at the segment level, with central costs not allocated to individual segments[182][183] Segment Revenue and Adjusted EBITDA (EUR thousand) - Nine Months Ended Dec 31, 2023 | Segment | Revenue | Adjusted EBITDA | | :------ | :------ | :-------------- | | TFSS | 235,170 | 150,326 | | AVPS | 61,286 | 30,453 | | RTS | 20,609 | (4,367) | | Central Costs | — | (61,693) | | Total | 317,065 | 114,719 | Segment Revenue and Adjusted EBITDA (EUR thousand) - Three Months Ended Dec 31, 2023 | Segment | Revenue | Adjusted EBITDA | | :------ | :------ | :-------------- | | TFSS | 80,338 | 51,370 | | AVPS | 22,261 | 10,372 | | RTS | 6,807 | (1,012) | | Central Costs | — | (20,977) | | Total | 109,406 | 39,753 | Profit and Loss Information (Detailed Expenses) This section details operating expenses, finance costs, and income tax, showing increased employee benefits and agent costs due to business recovery, and significant gains from warrant fair value changes Key Expenses by Nature (EUR thousand) | Expense Type | 3 Months Ended Dec 31, 2023 | 3 Months Ended Dec 31, 2022 | 9 Months Ended Dec 31, 2023 | 9 Months Ended Dec 31, 2022 | | :------------------------------------ | :-------------------------- | :-------------------------- | :-------------------------- | :-------------------------- | | Employee benefit expenses | (29,887) | (25,499) | (88,810) | (75,938) | | Depreciation and amortization | (10,763) | (10,245) | (30,895) | (40,463) | | Agent costs | (21,638) | (17,221) | (61,618) | (45,467) | | Change in fair value of warrants and put options | 10,762 | (488) | 10,012 | 4,525 | | Total operating expenses | (73,906) | (77,484) | (232,703) | (220,392) | - Employee benefit expenses increased due to a rise in the average number of employees from 1,663 to 1,914 for the three months, and from 1,573 to 1,885 for the nine months ended December 31, 2023[194] - Agent costs (merchant acquiring fees) increased as a consequence of overall business recovery[196] - A EUR10.8 million gain from the change in fair value of warrants and put options was recognized for the three months ended December 31, 2023, primarily from warrant liabilities[200] - Net finance costs for the three months ended December 31, 2023, amounted to EUR12.0 million, predominantly comprising EUR13.5 million linked to bank borrowings and amortization of fees, offset by foreign exchange gains and interest income[202] Earnings Per Share Global Blue reported positive basic and diluted earnings per ordinary share for the three and nine months ended December 31, 2023, reflecting a significant improvement and return to profitability Earnings Per Share (EUR thousand) | Metric | 3 Months Ended Dec 31, 2023 | 3 Months Ended Dec 31, 2022 | 9 Months Ended Dec 31, 2023 | 9 Months Ended Dec 31, 2022 | | :------------------------------------ | :-------------------------- | :-------------------------- | :-------------------------- | :-------------------------- | | Profit / (Loss) attributable to the owners of the parent | 12,936 | 608 | 20,657 | (26,324) | | Basic earnings / (loss) per ordinary share | 0.06 | 0.00 | 0.09 | (0.12) | | Diluted earnings / (loss) per ordinary share | 0.06 | 0.00 | 0.09 | (0.12) | - Basic and diluted earnings per ordinary share were EUR0.06 for the three months and EUR0.09 for the nine months ended December 31, 2023, compared to EUR0.00 and EUR(0.12) respectively in the prior year[206] - 8.7 million ordinary shares related to the Management Incentive Plan were excluded from diluted EPS calculation for the three and nine months ended December 31, 2023, as they were not dilutive[208] Issued Capital and Reserves & Shareholders Global Blue's issued share capital increased due to new ordinary shares issued to Tencent Mobility Limited and preference shares to CK Opportunities Wolverine Sarl, with Silver Lake and Affiliates remaining the largest shareholder - 9,090,909 ordinary shares were issued to Tencent Mobility Limited for EUR45.7 million (USD50.0 million) during the three and nine months ended December 31, 2023[212] - 847,059 series B preference shares were issued to CK Opportunities Wolverine Sarl as a dividend-in-kind during the nine months ended December 31, 2023[213] Shareholders of Global Blue Group Holding AG (as of Dec 31, 2023) | Shareholder | Total Shares | Ownership % | | :------------------------------------ | :----------- | :---------- | | Silver Lake and Affiliates | 103,201,298 | 43.1 % | | Partners Group and Affiliates | 42,581,842 | 17.8 % | | CK Opportunities Wolverine Sarl | 31,310,498 | 13.1 % | | Tencent Mobility Limited | 18,757,817 | 7.8 % | | Ant Group | 12,500,000 | 5.2 % | | GB Directors, Executive Management & Other Employees | 9,492,563 | 4.0 % | | Other Shareholders | 21,438,353 | 9.0 % | | Total excl. instruments held by the Group | 239,282,371 | 100.0 % | - 628,045 ordinary shares vested under the Restricted Share Award program and were transferred to employees from treasury shares during the nine months ended December 31, 2023[218] Loans and Borrowings (Detailed) Global Blue refinanced its debt with a new Senior Facilities Agreement, including a EUR610 million term loan and a EUR97.5 million revolving credit facility, significantly reducing total interest-bearing loans and borrowings Interest-Bearing Loans and Borrowings (EUR thousand) | Metric | As of Dec 31, 2023 | As of Mar 31, 2023 | | :------------------------------------ | :----------------- | :----------------- | | Long-term financing - Term loan facility | 610,000 | — | | Capitalized financing fees - Term loan facility | (24,530) | — | | Revolving Credit Facility (RCF) | — | 99,000 | | Supplemental Liquidity Facility (SLF) | — | 61,324 | | Total | 588,300 | 788,836 | - On November 24, 2023, a new Senior Facilities Agreement (SFA) was entered into, comprising a EUR610.0 million term loan and a EUR97.5 million revolving credit facility, used to repay previous debt[229] - EUR24.5 million in debt costs were recognized for the new SFA, while EUR3.4 million of unamortized debt costs from the old SFA were written off[230] - The financial covenant for the SFA is a Net Leverage Ratio lower than 8.0x, to be tested quarterly starting December 31, 2024[233] - First-ranking security is provided to lenders under the SFA, including pledges on shares, trade receivables, and cash of material subsidiaries[235][236] Fair Value Measurement of Financial Instruments Global Blue measures certain financial instruments at fair value using a three-level hierarchy, recognizing significant fair value gains from warrant liabilities and put options for the nine months ended December 31, 2023 - Financial instruments measured at fair value include other investments, put options liabilities, warrant liabilities (public and private), and derivative financial instruments[239][240] - The fair value hierarchy categorizes instruments into Level 1 (quoted prices), Level 2 (observable inputs), and Level 3 (unobservable inputs)[244] - A EUR9.5 million fair value gain associated with warrant liabilities was recognized under operating expenses for the nine months ended December 31, 2023[245] - A EUR0.6 million fair value gain associated with put options was recognized under operating expenses for the nine months ended December 31, 2023[248] Events After the Reporting Period The Board of Directors approved an optional exchange for employees to modify awards under the 2020 and 2019 Stock Option Plans, with modified terms including decreased option strike prices and number of options granted - On February 22, 2024, the Board approved an optional exchange for employees to modify awards under the 2020 and 2019 Stock Option Plans (SOPs)[252] - Modified terms for SOP 2020 include decreased option strike prices and number of options granted (average 29% reduction), with options expiring on November 12, 2028[253] - For the CEO's SOP 2020, option strike prices and number of options granted will be decreased by an average of 11%[253] - The financial effect of these modifications cannot be reliably estimated as of the issuance date of the interim financial statements[252]