Global Blue AG(GB) - 2024 Q4 - Annual Report

Executive Summary & Key Highlights Global Blue achieved strong FY23/24 financial and operational performance, marked by significant growth, balance sheet strengthening, and continued Tax Free Shopping recovery, leading to reaffirmed future guidance FY23/24 Group Performance Highlights Global Blue reported a strong operational performance for FY23/24, with significant revenue and Adjusted EBITDA growth, improved profitability margins, and a strengthened balance sheet through debt reduction and refinancing. The Tax Free Shopping recovery continued to accelerate, particularly in Asia Pacific, and the company reaffirmed its FY24/25 Adjusted EBITDA guidance FY23/24 Group Performance Highlights | Metric | FY23/24 | YoY Change | | :----------------------- | :------ | :--------- | | Group Revenue | €422m | +36% | | Adjusted EBITDA | €149m | +91% | | Adjusted EBITDA Margin | 35.2% | +10ppts | | Net Leverage Ratio (Mar 2024) | 3.4x | vs. 6.5x (Mar 2023) | | Debt Maturity | 2030 | Extended | - Tax Free Shopping recovery in April/May 2024: Continental Europe at 141% (vs. 128% in Q4 FY23/24) and Asia Pacific at 223% (vs. 166% in Q4 FY23/24)[1] - Reaffirmed FY24/25 Adjusted EBITDA guidance of >€200m[1] Executive Summary The executive summary reiterates the significant improvements in FY23/24 across operational and strategic objectives, highlighting strong financial growth, balance sheet strengthening, continued recovery in Tax Free Shopping, and solid progress in strategic initiatives, all leading to the reaffirmation of future financial guidance - FY23/24 financial results showed significant improvement against operational and strategic objectives[2] Strong Operational Performance The Group achieved substantial year-over-year growth in revenue and Adjusted EBITDA, exceeding short-term guidance and significantly improving its Adjusted EBITDA margin FY23/24 Operational Performance | Metric | FY23/24 (€ million) | YoY Increase (%) | | :---------------- | :------ | :----------- | | Revenue | €422m | 36% | | Adjusted EBITDA | €149m | 91% | | Adjusted EBITDA Margin | 35.2% | 10.2ppts | Rapid Deleveraging and Solid Balance Sheet Global Blue significantly improved its net leverage ratio and strengthened its balance sheet by refinancing debt, extending maturity to 2030, and moving towards its long-term leverage target Net Leverage Ratio | Metric | March 2024 (x) | March 2023 (x) | | :---------------- | :--------- | :--------- | | Net Leverage Ratio | 3.4x | 6.5x | - Refinanced debt in December 2023 with a €610.0m senior term loan and €97.5m revolving credit facility, extending maturity to 2030[4] Tax Free Shopping Recovery Continuation The recovery in Tax Free Shopping continued to progress strongly in April/May 2024, with significant increases in Issued Sales-in-Store in both Continental Europe and Asia Pacific compared to Q4 FY23/24 Tax Free Shopping Recovery (April/May 2024 vs. Q4 FY23/24) | Region | April/May 2024 Recovery (%) | Q4 FY23/24 Recovery (%) | Increase (ppts) | | :----------------- | :---------------------- | :------------------ | :-------------- | | Continental Europe | 141% | 128% | 13 | | Asia Pacific | 223% | 166% | 57 | Progress Against Strategic Initiatives The Group made solid progress in digitalization, commercial gains, and product development across its Tax Free Shopping Solutions and Payments divisions, leading to increased efficiency, market share, and new business growth - Tax Free Shopping Solutions: Digitalization efforts increased Success Ratio by 4 points to 56% in FY23/24, contributing an additional 8% growth in Tax Free Shopping Revenue. Net retention rate of 102.8% over the last five years[6][7] - Payments: Maintained strong market position with a net retention rate of 104.8% over the last four years. Hospitality payment gateway initiative signed 5 Acquirers and rolled out to over 350 hotels in FY23/24[6][8] Guidance and Long-Term Targets Confirmation Global Blue reaffirmed its financial guidance for FY24/25, targeting over €200m in Adjusted EBITDA, and reiterated long-term targets including revenue growth, drop-through, and net leverage ratio - Reiterated FY24/25 Adjusted EBITDA guidance of more than €200m[9] - Post FY24/25 long-term targets: 8-12% Revenue growth, >50% drop-through, and net leverage ratio < 2.5x[9] Financial Performance Analysis This section details Global Blue's robust Q4 and full-year FY23/24 financial performance, highlighting substantial revenue and Adjusted EBITDA growth across all segments, driven by market recovery and strategic initiatives Q4 FY23/24 Financial Performance Global Blue delivered strong Q4 FY23/24 results with significant revenue growth across all business lines and a substantial increase in Adjusted EBITDA, driven by improved revenue and cost management Q4 FY23/24 Key Financials | Metric | Q4 FY23/24 (€ million) | Q4 FY22/23 (€ million) | YoY Change (%) | | :-------------------------- | :-------------- | :-------------- | :------------- | | Revenue | 105.2 | 86.8 | 21% | | Adjusted EBITDA | 33.9 | 21.3 | 60% | | Adjusted EBITDA Margin (%) | 32.2% | 24.5% | +7.7ppts | Q4 Revenue Overview Q4 FY23/24 saw a 21% YoY increase in total revenue, with strong performance across all segments. Tax Free Shopping Solutions benefited from the ongoing recovery, especially in Asia Pacific and Mainland China spend, while Payments and Post-Purchase Solutions also showed robust growth Q4 FY23/24 Revenue by Segment | Segment | Q4 FY23/24 (€ million) | YoY Increase (%) | | :------------------------ | :-------------- | :--------------- | | Tax Free Shopping Solutions | 76.6 | 23% | | Payments | 21.7 | 23% | | Post-Purchase Solutions | 6.9 | 3% | - Tax Free Shopping Solutions: Continental Europe revenue €62.7m (+16% LfL YoY); Asia Pacific revenue €13.8m (+71% LfL YoY). Mainland China recovery reached 73% in Continental Europe and 125% in Asia Pacific[13] - Payments: FX Solutions revenue €9.7m (+30% LfL YoY); Acquiring business revenue €12.0m (+25% LfL YoY)[14] - Post-Purchase Solutions: LfL Contribution growth of 31% despite moderate revenue growth due to strategic exit from low-contribution contracts[15] Q4 Adjusted EBITDA Adjusted EBITDA for Q4 FY23/24 surged by 60% YoY, reaching €33.9m, reflecting strong revenue growth and effective cost management, leading to a significant margin improvement Q4 FY23/24 Adjusted EBITDA | Metric | Q4 FY23/24 (€ million) | YoY Increase (%) | | :--------------- | :-------------- | :--------------- | | Adjusted EBITDA | 33.9 | 60% | | Margin | 32% | +7.7ppts | - 69% drop-through rate for Adjusted EBITDA[16] FY23/24 Financial Performance For the full fiscal year FY23/24, Global Blue achieved substantial growth in revenue and Adjusted EBITDA, driven by strong performance across all business lines and effective cost control, resulting in a positive Adjusted Profit before Tax FY23/24 Key Financials | Metric | FY23/24 (€ million) | FY22/23 (€ million) | YoY Change (%) | | :-------------------------- | :----------- | :----------- | :------------- | | Group Revenue | 422.3 | 311.5 | 36% | | Adjusted EBITDA | 148.7 | 78.0 | 91% | | Adjusted EBITDA Margin (%) | 35.2% | 25.0% | +10.2ppts | | Adjusted Profit before Tax | 59.0 | 4.7 | +€54.3m | FY Revenue Overview Full-year revenue increased by 36% YoY to €422.3m, with all segments contributing to growth. Tax Free Shopping Solutions saw significant recovery, especially in Asia Pacific, while Payments and Post-Purchase Solutions also demonstrated strong performance FY23/24 Revenue by Segment | Segment | FY23/24 (€ million) | YoY Increase (%) | | :------------------------ | :----------- | :--------------- | | Tax Free Shopping Solutions | 311.7 | 36% | | Payments | 83.0 | 34% | | Post-Purchase Solutions | 27.5 | 32% | - Tax Free Shopping Solutions: Continental Europe revenue €264.8m (+28% LfL YoY); Asia Pacific revenue €46.9m (+106% LfL YoY). Mainland Chinese spend recovery in Asia Pacific reached 100% vs. calendar year 2019[20] - Payments: FX Solutions revenue €40.7m (+48% LfL YoY); Acquiring business revenue €42.3m (+33% LfL YoY), driven by travel recovery in Australia and new business wins[21] - Post-Purchase Solutions: 18% organic growth, with the remainder from the consolidation of ShipUp (acquired Nov 2022)[22] FY Adjusted EBITDA Adjusted EBITDA for FY23/24 increased by 91% YoY to €148.7m, surpassing 2019 levels (excluding the UK) due to significant contribution improvement and fixed costs remaining below 2019 levels on a like-for-like basis FY23/24 Adjusted EBITDA | Metric | FY23/24 (€ million) | YoY Increase (%) | | :--------------- | :----------- | :--------------- | | Adjusted EBITDA | 148.7 | 91% | | Margin | 35.2% | +10.2ppts | - 64% drop-through rate for Adjusted EBITDA[24] - FY23/24 Adjusted EBITDA is now ahead of 2019 levels (excluding the UK, considering €25.4m impact of UK Tax Free Shopping Scheme abolishment on FY19/20 EBITDA)[23] FY Adjusted Profit before Tax Adjusted Profit Before Tax for FY23/24 significantly increased to €59.0m, primarily driven by the substantial rise in Adjusted EBITDA, partially offset by higher net finance costs FY23/24 Adjusted Profit before Tax | Metric | FY23/24 (€ million) | YoY Increase (€ million) | | :----------------------- | :----------- | :---------------- | | Adjusted Profit before Tax | 59.0 | +54.3 | - Increase in net finance costs by €13.8m due to higher interest costs partially offset the EBITDA improvement[25] Cash Flow, Balance Sheet & Debt Management Global Blue significantly improved its cash flow and balance sheet in FY23/24, achieving positive unlevered free cash flow, reducing net debt, and successfully repricing its debt for future interest cost savings Cash Flow and Net Debt Position Global Blue achieved positive pre-tax unlevered free cash flow for the first time since FY19/20, significantly reducing its net debt and improving the net leverage ratio to 3.4x by March 2024 Cash Flow and Net Debt (March 31, 2024) | Metric | Amount (€ million) | | :------------------------- | :---------- | | Pre-tax unlevered free cash flow | 95.2 | | Group Net Debt | 522.5 | | Gross Financial Debt | 610.0 | | Cash & Cash Equivalents | 87.5 | | Net Leverage Ratio | 3.4x | - Pre-tax unlevered free cash flow increased by €100.3m to €95.2m, marking a return to positive cash flow since FY19/20[26] Events After Reporting Period: Debt Repricing Subsequent to the reporting period, Global Blue successfully repriced its term loan and revolving credit facility, which is expected to reduce annual interest costs by over €6m - In May 2024, the Group successfully allocated the repricing of its term loan and RCF, expected to close by June 30, 2024[27] - Interest rate margin reduced by 100ppts (term loan from 5.00% to 4.00%; RCF from 4.50% to 3.50%)[27] - Expected annualized interest cost savings of over €6m from June 2024[27] Operational Trends & Strategic Progress Global Blue demonstrated strong operational recovery in Tax Free Shopping in early FY24/25 and made significant strategic advancements in digitalization, commercial gains, and product development during FY23/24 Latest Tax Free Shopping Trends (April/May 2024) Tax Free Shopping Sales-in-Store volumes continued to significantly exceed 2019 levels in April/May 2024, with strong recovery across Continental Europe and Asia Pacific, driven by various shopper nationalities, and notable year-on-year growth Tax Free Shopping Sales-in-Store Recovery (April/May 2024 vs. 2019) | Region | Recovery Rate (%) | | :----------------- | :------------ | | Group LfL | 163% | | Continental Europe | 141% | | Asia Pacific | 223% | - Continental Europe recovery driven by US (319%), GCC (298%), and regional European (283%) shoppers. Mainland China recovery at 63% (below pre-COVID levels)[30] - Asia Pacific recovery driven by Hong Kong/Taiwan (601%) and North East Asia (352%) shoppers. Mainland China recovery strengthened to 190% (vs. 125% in Q4 FY23/24)[31] Sales-in-Store YoY Growth (April/May 2024) | Region | YoY Growth (%) | | :----------------- | :--------- | | Continental Europe | +22% | | Asia Pacific | +118% | FY23/24 Strategic Achievements Global Blue made significant progress in FY23/24 across its strategic pillars of digitalization, commercial gains, and product development, enhancing its market position and driving growth in both Tax Free Shopping Solutions and Payments - Tax Free Shopping Solutions: Digitalization efforts increased Success Ratio by 4ppts to 56%. Achieved a net retention rate of 102.8% over 5 years, outperforming competitors in key markets (e.g., France 152%, Spain 140%, Italy 125% recovery on L12M)[34][35] - Payments: Maintained a strong net retention rate of 104.8% over 4 years. The payment gateway initiative secured 5 Acquirers and rolled out to over 350 hotels, generating approximately €2m in Adjusted EBITDA[34][36] Outlook and Corporate Information Global Blue reaffirmed its FY24/25 financial guidance and long-term targets, providing essential corporate information, including disclaimers and an overview of its market position Financial Guidance and Long-Term Targets Global Blue reaffirmed its financial guidance for FY24/25, projecting Adjusted EBITDA of over €200m, and reiterated its long-term targets for revenue growth, drop-through, and net leverage ratio, reflecting confidence in continued business growth drivers - Reiterated FY24/25 Adjusted EBITDA guidance of more than €200m[38] Long-Term Targets (Post FY24/25) | Metric | Target | | :----------------- | :---------- | | Revenue Growth | 8-12% | | Drop-through | >50% | | Net Leverage Ratio | <2.5x | Additional Information This section provides details on accessing webcast information, investor relations contacts, disclaimers regarding Non-IFRS Financial Measures and Forward-Looking Statements, and a brief overview of Global Blue's business and market position - Webcast information and supplemental financial data are available via the Investor Relations section of Global Blue's website[40] - The press release includes Non-IFRS Financial Measures, which may not be comparable to other companies' measures and should not be unduly relied upon[41] - Forward-looking statements are subject to risks and uncertainties, and actual results may differ materially from expectations[42] - Global Blue is a business partner for the shopping journey, providing technology and services in Tax Free Shopping, Payments, and Post-Purchase solutions, connecting thousands of retailers, acquirers, and hotels with nearly 80 million consumers across over 50 countries[43]