Global Blue Group Holding AG (NYSE: GB and GB.WS), a leader in tax-free shopping solutions, payments, and post-purchase services, has released its financial results for the second quarter and six months ending September 30, 2024. The company reported robust growth, supported by strategic initiatives and favorable market conditions, alongside enhancements to its capital structure through an increased share buyback program.
Performance Highlights:
- Revenue Growth:
Global Blue achieved a 20% year-over-year revenue increase in H1 FY24/25, reaching €250 million. This surge was driven primarily by its Tax-Free Shopping Solutions and Payments segments, which saw significant increases in revenue due to higher consumer activity and improved operational efficiency. - Profitability:
Adjusted EBITDA rose by 36% year-over-year to €102 million, with margins expanding to 40.7%. The company’s high operating leverage allowed for a drop-through rate of 64%, boosting LTM Adjusted EBITDA to €175 million compared to €164 million in the previous quarter. - Leverage Reduction:
The company continues to deleverage, reducing its net leverage ratio to 2.9x by the end of September 2024 from 4.5x a year earlier. This positions the company well to achieve its long-term target of a leverage ratio below 2.5x.
CEO Commentary:
Jacques Stern, Global Blue’s CEO, expressed satisfaction with the company’s performance:
“We are pleased to report strong results in H1 FY24/25, significantly outperforming the luxury market with 20% revenue growth. This was fueled by our unique exposure to affluent international shoppers. While the broader luxury market shows signs of slowing, our strategic investments and favorable market conditions provide us with a resilient foundation to adapt and thrive.”
Mr. Stern highlighted key trends benefiting the business:
“The travel industry remains robust, particularly in the high-end segment. Our commitment to innovation and market expansion ensures we remain ahead of the curve. Considering these strengths, along with a €5 million acceleration in growth investments, we’ve adjusted our FY24/25 EBITDA guidance to €185-205 million.”
Segment Analysis:
- Tax-Free Shopping Solutions:
Revenue for this segment increased by 25% year-over-year to €193 million, driven by heightened shopper activity in Continental Europe and Asia-Pacific. Sales-in-store in Asia-Pacific grew by 49%, reflecting strong demand in the region. - Payments:
Payments revenue rose 12% year-over-year to €43.7 million, exceeding the 7% growth in sales-in-store. This was primarily attributed to increased treasury gains and improved acquiring margins. - Post-Purchase Solutions:
Revenue for post-purchase services was €13 million, a 6% year-over-year decline. Management’s strategic decision to exit certain low-margin contracts contributed to this decline while boosting contribution margin by 7%.
Capital Allocation Updates:
Share Buyback Program:
In light of improved free cash flow generation, Global Blue announced an increase in its share buyback program from $10 million to $15 million, extending the program’s duration until November 30, 2025. As of November 20, 2024, the company had repurchased approximately $2.8 million worth of shares under the program.
Strategic Investments:
Global Blue is accelerating €5 million in investments targeting future growth. These initiatives include expanding operations in new countries, adapting its business model in Japan, and scaling its Hospitality Gateway offering.
Outlook and Guidance:
Despite a moderated luxury market, Global Blue remains optimistic about its long-term growth prospects, forecasting:
- FY24/25 Adjusted EBITDA of €185-205 million.
- Long-term revenue growth of 8-12%.
- Drop-through exceeding 50%.
- Net leverage ratio below 2.5x.
The company’s continued focus on operational excellence and strategic initiatives positions it for sustainable success, even amid evolving market dynamics.
October 2024 Trends:
The Tax-Free Shopping segment reported a 17% year-over-year increase in worldwide issued sales-in-store during October. Continental Europe saw a 12% rise, driven by a 14% increase in shoppers, while Asia-Pacific reported a 29% increase, reflecting a 32% surge in shopper activity.
Conclusion:
Global Blue’s strong H1 FY24/25 performance underscores its resilience and ability to adapt to changing market conditions. With ongoing investment in growth initiatives and enhancements to shareholder returns, the company is well-positioned to navigate future opportunities and challenges.
For more details, including a full financial summary, visit the Global Blue Investor Relations website.
Forward-Looking Statements:
This report contains forward-looking statements that involve risks and uncertainties. These statements are based on current expectations and are subject to various factors that could cause actual results to differ materially.
This rewrite highlights the financial performance, market trends, and strategic initiatives while maintaining clarity and reader engagement.
