Q3 2024 Global Blue Group Holding AG Earnings Call - Pre-Recorded
Good morning, good afternoon or I am.
Today with Hudson before CFO of the group and Jack stem some of the group and we will comment to you our Q3.
Figures.
I will start by an executive discovery to drew the main key points towards a mining first.
The first nine months of the year has been strong and June revenue was 41% increase.
EBITDA.
At the end of nine months increased by 102% at.
115 million euros, and this translate the drop through of the revenue and adjusted EBITDA of 62, 8%.
We are also in the Q3.
Assuming an acceleration of the annualized adjusted EBITDA at 169 million euros for extended comment on that and.
If we can.
<unk> figures.
The January a confirm that.
The strength of the recovery in Continental Europe.
Increased recovery over 2012% versus 118% in Q3 and saving in APAC.
Recovery, which is now reaching 161% of 2019 in January versus growing 15% in Q3, I will give you much more information on that.
In the coming minutes and just two elements to mention in the main takeaway you may remember that we have.
Refinancing by December.
December 2023, which resulted into a new senior debt of 610 million.
The FCS those almost $100 million with a maturity.
Of seven years and older.
Loan side also.
Mentioned that.
So very strong improvement of the net leverage ratio.
At three.
Six time versus more than six.
Sure and we confirm our objective.
Below two five times.
Net leverage ratio. So these are really the takeaway and now.
Deep with lower to <unk> to give you more detail on Q3 and nine months financial performance.
Thank you.
Thank you for all the CF doesn't go back Lou and I will take you through the group's financial performance for this quarter and the nine months period ended June 30.
Certainly first of December 2020.
As a reminder, our financial year runs from April to March and all of the reconciliation to the nearest isos matrix included into the <unk>.
On slide seven our adjusted P&L the soft quarter.
We are pleased to report another solid quarter with significant progress across the business TFS in Meps reported 70 still increased by one 5 billion an increase of 27, 7% investors could realize true.
<unk> revenue increased by 26, 2% to $109 4 million, you'll that's just sort of a steady payout last year and turning to adjusted EBITDA. We have delivered a significant improvement to $79 8 million Euro is obtaining a eight five points increase in the adjusted EBITDA margin to $36 three per.
And we have a 69% revenue drop through to adjusted EBITDA.
We recorded an adjusted net income for the group of $9 1 million versus $6 six in Q3 last year.
Now to slide eight for the revenue.
Yes, you can see that we have delivered another strong quarter significant growth deliver the 26, 2% increase in revenue versus the same period last year.
We can go into the details of our division in the following slides, but you can see here TSS ADP SNF, yes contributed to a further $22 7 million youre holding her venue with a further 1 million scope effect on PFS in that case, we did have a 1 million Youre always 16, pets, which gets us at the end of two one.
On slide $9 4 million you off revenue in Q3, this year versus $86 7 million in York less Geos Empire, turning now to deliver new performance by Division.
TFS.
Statements at 4% of our revenue in Q3.
TSMC you've had a strong performance with an increase in hernia of 24, 8% on a reported basis to 82 million year old on the like for like basis revenue in Continental Europe increased by 17, 7% to 68 million annual while revenue in Asia Pacific increased by 18.
Three 5% to 20 million Euro revenue.
The strong performance in Asia, 60, ongoing recovery of close although hitting nationality with the reopening of Chinese border in January 2023, being the key driver of the revenue improvements, especially in Asia as I mentioned, we're self install shoppers for mainland China has already recovered to 105%.
In Q3.
This year, that's for 2019, and Jack will cover that in more detail later.
Turning now to Ats.
<unk>. This is 20% of our corporate revenue Dis Division also delivered a strong performance with an increase in revenue of 37, 4% on a reported basis to $22 3 million Ural, reflecting a strong performance across both business segments on a like for like basis revenue and ethics solution.
Creased by 64% to $10 6 million Euro Wyatt Hogan, who in the acquiring business increased by 26 point took a sense to almost 12 million annual.
As with TFS ADP is also benefiting from the ongoing recovery in the trailer industry.
Now to <unk>.
Yes, yes, 6% of the group revenue and to treat this year as a reminder, U S. P. S reflects the acquisition of US exactly in March 'twenty, one consolidation of Youku Dot farthest from September 21, and the acquisition of ship up in November 22.
Ian you can see MTS revenue, increasing by 11, 6% on a reported basis to $6 8 million annual revenue in Q3 this year.
There was inorganic growth of three 9% and then you should know of.
500 came from the acquisition of shipper, while like for like renewables was moderate at three 9% as a result of the cessation of face of carriage to fix our clients, which is revenue with lower contribution to like for like contribution growth of the six months, which is after carrier cost.
Was very strong at 80%.
Now to detail on adjusted EBITDA.
The significant improvement in revenue together with the ongoing focus on the cost base led to a 65, 2% increasing adjusted EBITDA in Q3 this year.
And the revenue drop through is 69, 2% and I will take you through the detail here, we begin with our adjusted EBITDA, which was 24.1 million last year.
If we look at the additional contribution of each business.
Provision being the matching that whole revenue minus marginal direct play other cost we have a further $19 4 million in Q3 this year.
Then considering the $3 8 million Yahoo impact of fixed cost.
And then the scope effect of TFS in that case, and the FX impact the room delivered an adjusted EBITDA of $79 8 million and are always an increase in the adjusted EBITDA margin of eight five points to 36, 3%.
Turning now to flight searching for further detail on the net finance cost we are showing here a significant increase of $8 2 million in net finance cost coupons to consider first we have an increase in interest cost of $5 3 million.
This is due to an increase in interest rates from 326% in October and November 'twenty, two lecture to DCF semi at six 5% and in December it twice to 8.4% as a result of the refinancing.
And then we have a negative foreign exchange variation of <unk> 3 million versus the same period last year as a reminder, our country.
Q3 last year was impacted by the foreign exchange related to the sale at night have equity transaction and also the supplemental shareholder facility, which was denominated in USD, while global who we bought in Europe.
Turning now to the detail of quarterly adjusted EBITDA.
Here, we are showing the annualized adjusted EBITDA for the group based on the quarter and then recovery you can see here is TD and consistent improvement in the annualized quarterly adjusted EBITDA and now based on the Q3 recovery.
The realized a quarterly adjusted EBITDA is at 115 9 million.
This has led to a significant improvement in terms of margin from 28, 8% less Justin Baier. He had two this year 36, 7%.
Now I will take you through the financial detail for the nine months performance.
Here, we are showing the adjusted P&L for the nine months over the year and again, we see the same trends as we used a soft quarter.
Fifth in Adp's reported self install increased by a $5 9 billion euro when increase of almost 45%. That's just the nine months last year.
The new increased by 41% to 317 million.
And then turning to adjusted EBITDA, we have delivered a significant improvement to almost 115 Daniel.
And with a big improvement in terms of modeling a 11 point improvement and imagine now at 36, 2%.
Finally, we recorded an adjusted net income for the group at $25 3 million, you'll again, a significant improvement versus last show, which was negative at $7 1 million.
Let's turn now and get into the details on our hedge is TBD.
Similar to Q3, we are showing the detail for the nine months.
We achieved the 102% increase in adjusted EBITDA versus last year, and we have a door pool of 63% starting with our adjusted EBITDA at $56 7 million annual lecture on the same pad.
If you look at the additional contribution for each business. We have a further 70 treat familial in my nine months.
And then taking into account the fixed cost 30 million the scope effect about $2 million and then the foreign exchange impact of about 500 K. The group delivered an adjusted EBITDA of $114 7 million annual.
With an increase as I mentioned, Oh, I, just keep the EBITDA margin at 36, 2% that means plus 11 punch.
Moving now to the DNA and the net finance cost.
In terms of at least two DNA. So we have a slight increase of 600 kit.
And now we all had $27 6 million annual for the Purion M. On the annualized basis does give us the D&A of 76 million, which is in line with our conversation of Capex.
And then related to the net finance cost.
So we are expanding the same trends are here as we had in Q3, the net finance costs increased to over the nine months diodes by 9 million.
And this is due mainly to.
Two the interest cost.
Because they have increased on a blended basis from 317% to $6 67 per cent.
And this was offset by a decrease of also finance cost by $8 3 million.
And this is the result of the foreign exchange impact related to set the highest nighthawk transaction and she came onto shoulder fussy today to tell you I've already explained.
Let's turn now to the cash flow statement.
After an adjusted EBITDA of $114 7 million or the level of Capex is $27 9 million Euro.
And then you can see here a working capital inflow of $6 1 million Yahoo in Japan, which I will cover in detail on the next slide.
We'll have also a higher level of interest paid are about 41 million.
And this is mainly due to the interest rates are or where the payer doesn't that that asking rates rather.
And then just touching equity investments from Tencent. That's it's been done in November and that resulted in an inflow of 45 million and.
And you can also see here are the costs related to our refinancing for about 24 million. You'll finally, our net debt has improved by 41.2 million Newell.
Let's turn now to the next slides in order to have a look on the working capital dynamics.
As a reminder, our working capital needs or they can buy timing difference between the more months, we posted the refunds that we make to the international travelers and the moment, we see the 80 payment for merchant and tax authorities.
P. P. Kennedy refund travelers on average 30 to 45 days before we are paid by the central authorities.
As a result, we experienced cash proceeds and then for the year with a larger networking capital needed during spring summer months when international shoppers together multi country, followed by a working capital unwind during auto winter season, our low season.
As we have seen the travel industry recover we have also seen a significant increase in volume, which lead to a much higher working capital need and you can see here, where we add a particular doctor glory high outflow of 43 million during the nine months our previous year.
Financially our 'twenty to 'twenty two 'twenty three where we were in full recovery now we are in a more settled environments. You can see these this study life with a more balanced working capital needed during spring and summer followed by walking capital access during the autumn which has made here.
Two 6 million inflow, but definitely we can say that we are you know in the business. We are walking Cathy no trial.
Now turning to our 90 of these of our net debt position.
As of 31st of December 2023, our net financial debt amounted to $508 6 million, including cash and cash equivalent of $101 4 million you.
You can see here that there has been a strong improvement of the negative or hedge ratio, which was mentioned in east central diction Barak. So from six five times at the end of March 23, we are now at three six times at the end of December 23.
As a reminder, in November we took the opportunity to renegotiate our senior debt to strengthen the balance sheet, but and shipped with at the end meaningfully deleverage. The group. The refinancing was closed at the beginning of December and with the senior debt at 610 million you always maturity of seven years and know him.
The credit facility at $97 5 million Hull, which was not drawn at the end of December.
Turning now to the key takeaways.
First we are pleased to report solid recovery, we suddenly she can't increase of 41% of our revenue.
Which lands at 370 million you all.
Thanks, then thanks to the strong revenue growth and ongoing management on the cost base. We are pleased to report a strong improvement in nine months on our adjusted EBITDA. We are at about 115 million Noel.
So an increase of 102% that's just the same day or less Joe and the drop through of almost 63% and adjusted they begin.
On that basis, if we analyze the adjusted EBITDA based on the quarterly performance of the group that he's an acceleration in nine months at 159 million.
And.
To strengthen the balance sheet the goop refinance it's a total in depth next we just senior debt at 610 million in an evolving credit facility of 97 seven in general.
This is in place and she 'twenty so cheap.
Finally, we have the either the strong key improvement in the net leverage ratio to Triple T X times and this is reiterating our objective of being below two five times.
So this concludes the financial section and I will now hand over to Jack to present, the latest trends and the long term goals of pneumonia.
Thank you Roxanne So quick update on the latest strengths and then January before we act.
Across the board.
Performers.
Linzess is through <unk>.
It was a few years was seven points of improvement both recovery Europe.
Sure.
It's a good data in January.
Retail in page 55, you can see that in Europe, we have reached 125% recovery to be compared to 182%.
Q3.
And.
This was led in particular by an increase of the strengths approaching 4%.
If we look in terms of number of international shopper, we still arent below 2019 at 93%.
If we go now into the detail.
Oh, the nationality coming to Europe Continental Europe, as a destination I think I will make a few comments there first we are seeing.
Now to slide for you.
Second on the U S. We are seeing.
The us housing firm.
Same for the Gulf country.
Bush nationality of group of mesh and ADT around 275% to 300% recovery versus 2019 were very strong.
And also we're.
First you mentioned that mainland China, who used to represent 25%.
The expense in 2019 and have seen in January and acceleration from 58% in Q3 to 80%. So those will be the focus.
To share with you.
<unk> by the emerging.
We are seeing that despite some weakness in terms of consumer demand domestically in the U S.
International spend are very strong so 290%.
January.
Which is driven by.
Recovery very strong in terms of number of shoppers almost 200%, namely 195% and also a strong increase of the spent over Oregon.
And shopping in Europe at 14, 9%, leading to 290, 290% recovery of the spending versus 2019.
If we go into a little bit more detail trying to I understand.
Why is this performance you can see on this chart, where we are.
Yeah.
Comparing consumer who used to shop.
Last quarter or so.
Calendar year so.
Yeah.
Our Q3, but calendar year Q4, you can see that as.
As it has been the case it seems the beginning of the recovery the recovery is really.
Very strong for our network individual and naturally wins.
You can see that I Miss working individuals with people.
Sigma station, which are spending more than towards Jay. We are they are spending an average more than three times, what they used to spend in 'twenty.
And in the last quarter, it was even where bush photon.
In summary, emerging recovery very strong we see no sign of decline and it's led by the I would say high spender.
If we move for Chinese going into Continental Europe.
The distribution, we see there that the acceleration is mentioned.
In January with 80% recovery.
Which is a combination of low recovery in terms of number of shopper, 49% well below the recovery in terms of our capacity in January.
Pure exploration one the cost of the slides, which remained very high but also some constraints in terms of the visa issuing.
Issuing which remains.
Important.
Particularly when traveler wants to go to France or Germany.
A little bit more detail.
Next slide.
Which basically explain why we have this low level of recovery of 49% versus capacity on the other hand like full audio nationality.
A single strong increase of the spent 63% which lead to this 80% recovery in terms of spend.
If we move now to the recovery in Iraq as a destination you see that zero to January the recovery has been stronger than in Q3 161 versus 150% and.
Yes.
I would say not like in Europe, <unk> is basically driven by the combination over the strong increase of international shopper.
<unk> 2019 in APAC is a distinguishing one that aging, but also by a strong increase of spend 36% in line with which we are seeing in Europe.
When we go through the detail of the latest strange for nationality coming into APAC as destination.
The most important thing towards the slide is the acceleration of mainland China, we used to represent 56% of the start of 2019 and for which we have seen an acceleration from 105% in Q3.
227%.
January.
We go a little bit more in detail.
On this Chinese recovery, we see that like in Europe, the number of international travelers.
I would say low.
59% compared to a net capacity of 82% increase.
Increase our spent is much more important 115% leading to this 127% level of recovery.
And a bit like four.
The American.
Cable Shaw for segment.
Four people, adding shop in.
In the last quarter versus 2019, so men's scent passport.
What is the multiple of spend that they have and you see that.
Surprisingly unsurprisingly as you won't see the same trend then for American I E. The recoveries really.
Led by high networks individuals, which are spending three times more than what they used to spend in 2019 and the affluence is around two times so almost the same.
I would say figures that you have seen a couple of minutes ago for the U S.
If we project ourselves in terms of next months for mainland China shoe element to have in mind first the willingness to shop and abroad remained very very strong.
You can see that on the slide every months, we survey more than 10000 Chinese too.
George their willingness to.
Travel into shop abroad, you see that.
The willingness of strong at more than the 76% and it has been quite stable.
For the last.
A few months.
But in terms of our capacity.
<unk> seen this influx of January.
In Europe and in APAC, which is a very good news.
Should remain tight.
In particular in.
February which is Chinese new year.
And obviously, we see the acceleration of the consumer coming back.
We all know that after capacity being in place unique couple of months or weeks in order to see the benefits in terms of the number of travelers. So good news from that point of view.
And just to your just dimension to drew.
Hum.
In terms of capacity, which we are seeing that the recovery.
He's very strong.
In terms of tier one strategy.
<unk>.
Its 84% for Europe, and 90% for a buck so tier one city ensure though going to Europe or growing two to robot.
The secondary in the third.
Cities of China, being a little bit less I would say recovered which explain also why for this consumer who is spending less than the one from tier one cities we are seeing.
Two.
This fact that we have.
Recovery of TUI switches.
Lower than Dr capacity, but.
An increase of sponge, which is hydro one of the reason being is this mixed effect in terms of recovery from Pablo coming from tier one versus other ships and you have on the left.
There was a recovery for the various geographies you see that <unk>, which is one of the other.
For Chinese, but January leaf or tuition when you come in Europe still has a low recovery in terms of number of flight.
So in Europe, we are now back to almost 80% the recovery of France is dragging down the performance in Europe, because usually.
Two is first to go.
<unk>.
And then grew on other countries.
Last.
Element in terms of information about China is the VA is visa issuance.
Which show that well known.
Things are going better.
Because we see more and more country, where Chinese can get their visa in less than seven days, but we still see that.
France, and Germany, which are two key country in terms of traction for Chinese remain.
I would say difficult issue would lend sleep, if you want to.
Yet.
So those things should improve in the coming months, but for now obviously there are still one of the reason why we see this lower.
Number of shoppers versus at capacity, but again this should improve.
Last but not least if we project ourselves in the coming months coming quarter. Obviously, you know this slide is how we simulate based on the recovery on mainland China, what could be the recovery of the EBITDA of the group.
And as usual I will.
To give you a little bit of detail. So great. You have you will recognize the Q3 annualized figures at 159 million euros at hooks in men's.
You mentioned, a few minutes ago, which imply.
52% recovery in terms of mainland China, if we stimulate recovery, which hopefully will come in the next quarter.
This level of recovery.
For example, being at 100%.
Recovery you can see that.
The in place.
The level.
Level of EBITDA would be around 200 million.
The slate to be precise 202 million. So these slides is just there to help you to understand based on.
Different level of simulation of Chinese what could be the.
In fact.
Positive impact on global Abd of next year.
Which is a good transition to talk about guidance and targets. So we issue guidance and target in September.
So to come in there first.
We are confirming our guidance for full year 'twenty three 'twenty four of.
145 265 million euros.
Having in mind that we reached after nine months $115 million and four 'twenty four 'twenty five we are looking for <unk> above $200 million.
With that in mind.
You see also.
The duration of the objective over.
Leverage ratio below two 5 million so nothing has changed.
We want to reaffirm those targets and guidance and last but not least just to remind you that.
Luis will H.
In terms of inflation.
Because the top line of global volume.
Volume GSI is directly.
Linked to the luxury rooms price increase.
Which are which have grown and which will continue to grow higher than the inflation.
And there and on the opposite side just to remind you if ever we are getting into a recession, which seems to be not the case in the latest.
That makes sense, but if I've heard this is a case.
To remind you also that we are well hedged against that thanks to this.
High network individuals, which are less sensitive to the.
Make shock that we're showing to you before.
So in summary, a.
A very healthy Q3.
The positive trend in January and.
Very strong work of the team in order to strengthen the balance sheet and deleverage the company. So thanks for listening and as usual you.
You can contact Ari.
Investor relation in its wholesale ski bumps.
Arrange one on one meetings between the U <unk> and myself. Thank you very much.
Okay.
Okay.
Okay.
Okay.
Yes.