Global Blue Group reported strong Q1 FY24/25 results with a 25% increase in revenue to €118m and a 55% rise in Adjusted EBITDA to €43m, reiterating its financial guidance and announcing a $10m share buyback.
Global Blue Group Holding AG announces its financial results for the first quarter ended June 30, 2024.
- Strong YoY growth in Group Q1 Revenue of 25% to 118m euros, with a 55% increase in Q1 Adjusted EBITDA to 43m euros
- Improvement in Q1 Adjusted EBITDA margin of 7ppts to 36.5% and a 65% drop-through1
- Solid acceleration in Annualized Adjusted EBITDA2 to 205m euros vs. 164m euros in the previous quarter
- July’s Tax Free Shopping Sales-in-Store3 YoY growth of 25% confirming the positive Q1 FY24/25 trends
- Financial guidance reaffirmed – FY24/25 Adjusted EBITDA of >200m euros
- Announcing $10 million share repurchase program
Global Blue’s CEO, Jacques Stern, commented: “We are pleased to report a strong start to our financial year with 25% YoY growth in Q1 FY24/25 Revenue, somewhat contrasting with the overall mixed performance reported during the same period by Luxury companies.
The YoY growth in Adjusted EBITDA reached 55% in Q1 and the Adjusted EBITDA margin improved by 7pts to 37%, reflecting the high operating leverage profile together with the ongoing focus on the cost base. This has led to a solid acceleration in Annualized Adjusted EBITDA2 to 205m euros compared to 164 millions euros in the previous quarter.
Given our strong start to the year, the progression of Tax Free Shopping LfL Issued Sales-in-Store3 in July of 25% and strong progress with our strategic initiatives, we reiterate our FY24/25 Adjusted EBITDA guidance of more than €200m.
In light of continued robust operational improvement and free cash flow generation not reflected in the share price, we are announcing a $10 million share repurchase program.”
Q1 FY24/25 financial results showed a significant improvement across all key metrics.
Strong financial performance
The Group delivered a 25% YoY increase in Revenue to €118m and a 55% YoY increase in Adjusted EBITDA to 43m euros. The increase in Adjusted EBITDA implied an improvement in margin of 7pts to 36.5% with a 65% drop-through[1]. This drove a significant acceleration of the annualized quarterly Adjusted EBITDA2 to 205m euros, up from 164m euros in Q4 FY23/24 and 134m euros in Q1 FY23/24.
Furthermore, the Group delivered a significant improvement in the net leverage ratio4 to 3.4x at end June 2024 from 5.7x at end June 2023, and in line with the long-term objective of <2.5x.
Continuation of the progression in Tax Free Shopping in July 2024
In July 2024, following on from the strong performance in Q1 FY24/25, Tax Free Shopping LfL Worldwide Issued Sales-in-Store3 experienced a YoY growth rate of +25%, with +12% in Continental Europe and a significant YoY growth rate of +64% in Asia Pacific. All major nationalities are contributing to this double-digit growth, led by Mainland China at +73%.
Confirmation of guidance and long-term targets
Given the strong start to the year, and July’s Tax Free Shopping LfL Issued Sales-in-Store3 trends, the Group reiterates financial guidance and long-term targets, with FY24/25 Adjusted EBITDA of more than 200m. euros. As the environment normalizes thereafter, in the long-term, Global Blue is targeting 8-12% Revenue growth, >50% drop-through1 , and a net leverage ratio4 <2.5x.
Share buy-back announcement
Given the strong operational improvement, rapid deleveraging, reaffirmation of financial guidance, and expectations for continued free cash flow generation, Global Blue announced today a $10 million share repurchase program valid for 6 months. No shares will be purchased from Silver Lake or its affiliates. Global Blue plans to use its existing cash to fund repurchases made under the share repurchase program.
Latest Tax Free Shopping Trends in July 2024
In July 2024, the Tax Free Shopping Worldwide LfL Issued Sales-in-Store3 experienced a YoY growth rate of +25%.
In Continental Europe, July 2024 Sales-in-Store3 increased by +12% compared to the same period last year, driven by a +10% increase in the number of shoppers and a +2% increase in the average spend per shopper. Mainland Chinese shoppers led the performance at +33%, followed by US shoppers at +15% and GCC shoppers at +7%.
In Asia Pacific, July 2024 Sales-in-Store3 was up +64% compared to the same period last year. This was driven by a +49% increase in the number of shoppers and a +10% increase in the average spend per shopper. All nationalities demonstrated a strong Sales-in-Store3 performance, led by Mainland Chinese shoppers at +97%, followed by North East shoppers at +76% and Hong Kong and Taiwan at +60%.
1 Refers to the portion of Revenue growth that drops through to the Adjusted EBITDA line.
2 Quarterly Annualized Adjusted EBITDA is calculated by applying quarterly revenue recovery to CY2019 four quarters (pre-COVID) levels, bridging to Adjusted EBITDA based on the respective quarter contribution margin and full year fixed costs. The annualization factor reflects seasonality.
3 Refers to the Issued Sales-In-Store (Spend), like-for-like (at constant merchant scope and exchange rates).
4 Net Leverage refers to Net Debt divided by the last 12 months Adjusted EBITDA excluding Post-Purchase Solutions Adjusted EBITDA losses.
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