Q2 2025 Global Blue Group Holding AG Earnings Call - Pre Recorded
Let me first start by the key takeaway on this first half.
So very.
Very strong delivery.
H wound revenue as soon a 20% increase.
On slide <unk>.
Into a 36% increase over the adjusted EBITDA at 102.
Thanks to our operating gearing.
We are happy to report an increase of the EBITDA margin of four six to four key point.
7%.
Drop through.
The revenue to EBITDA of 64%.
As a consequence it we.
Noted a solid acceleration of the adjusted EBITDA.
Coming from 175.
Speaker Change: This quarter versus $1 60 for the previous quarter and all of that will be detailed by your hooks that in a moment.
Speaker Change: We have also adapted our financial guidance 285, and 205 I will come back to that later in the presentation.
Speaker Change: And finally.
Speaker Change: We are communicated this morning on or an increased share buyback from 10 million to $15 million and the extension of the program until November 2025 with that in mind I'll, let you the floor of oxide.
Speaker Change: Thank you Zach and good morning, good afternoon, everyone.
The hooks and you called it first off global Blue and I will take you through as mentioned by that.
Speaker Change: The group's financial performance for the second quarter under six months bad at the end of September 2024.
Speaker Change: As a reminder, our financial year runs from a print too much. So this is about Q2 and H, one announcements and all the reconciliation to the nearest ISS metrics I didn't catch it.
Speaker Change: Let's start with the P&L related to our second quarter.
Speaker Change: We are very pleased to report another strong quarter with significant progress across the business when comparing performance versus the same period last year.
Tax free shopping solution from payments reported pension stock increased by none of that 14 million or an increase of 14%.
Speaker Change: <unk> revenue of 132 million you will a 17% increase because then by a solid performance in both tax free shopping solutions and payment.
Speaker Change: Given the strong focus on variable cost optimization. The good thing about the contribution of 105 in general.
Speaker Change: 19% increase.
Speaker Change: Then the group deemed other than that just to be bogie of $58 7 million, you'll the 25% increase reflecting some have any calls and the high operating leverage profile of our business.
Speaker Change: This resulted in an improvement in adjusted EBITDA margin by nearly three points to 44, 5% with a 62% droppable.
Speaker Change: Finally, we recorded an adjusted net income for the group of 21 million, you'll that's just 40 million over last year.
Speaker Change: Turning now to the detail of the divisional performance.
Speaker Change: Starting with tax free shopping solution accounting for 77% of our group revenue in the quarter.
Speaker Change: The division being the strong performance with completed self install growth of 15% and hold any growth of 18% to 102 million you'll.
Speaker Change: You can see here that for the first time, we are reporting revenue growth well ahead of our self install growth.
Speaker Change: Uh huh.
Speaker Change: Okay.
Speaker Change: First and very pleasing to note similar to our first quarter. There has been no pricing pressure in the period, which has never been the case in the past.
Speaker Change: Then we have several had a positive mix effects and I wish and our revenues, which has increased overhauled the GFS revenue by 6%.
Those growth drivers were somewhat offset by a negative continental mix of 2%. This is because Asia Pacific is growing faster than Europe with self install had 30%. That's just 25% last year and the VAT rate in Asia Pacific is much lower at around 10% versus 20% in Europe.
Speaker Change: Then moving to contribution which is revenue less valuable cost here, we detailed the 20% increase to 87 million Euro with a strong improvement in both Europe and Asia Pacific TFS as a strong contribution margin of 86% with the variable costs, mainly related to airport refunding cost turning.
Speaker Change: Now to payments.
Speaker Change: Payments accounted for 18% uncle, Charles when you in the quarter, although all payments being the other revenue of $23 4 million year old a 16% increase the head of the 9% growth in states install mainly due to increased margin on trigger gains.
Speaker Change: Then if we look at the contribution level of just over 13 million year old 12 million Youre hoist from ethics solution with a strong contribution margin of 96%.
Speaker Change: Then 1 million new hoist from acquiring with a contribution margin of 10% and then you'll have the whole point 4 million, you'll the integrated payment solutions business, which has a contribution margin of 18, 8%.
Speaker Change: Turning now to crisper taste solutions.
Speaker Change: He had the business line accounted for 5% of group revenue in the quarter was Princess line saw a slight decline of 1% with a revenue at $6 7 million you all with a contribution goes here flat at 4 million.
Speaker Change: Turning now to adjusted EBITDA.
Speaker Change: As I said earlier, the significant improvement in revenue together with the high operating leverage profile of the business led to a 25% increase in adjusted EBITDA in the quarter with 62 thoughtful.
Speaker Change: Last year, we were at 47 million Euro.
Speaker Change: And then with the additional contribution of 17 million, you're coming from all the business lines and fixed cost and FX exchange impact of 5 million Youll do.
Speaker Change: The group delivered an adjusted EBITDA of 59 million you hold this quarter with an increase in adjusted EBITDA margin of nearly three points to 44, 5%.
Speaker Change: Turning now to detail the first half performance.
Speaker Change: Yeah, we actually in the two P. N N. So far the first half of the year and again, we see the same positive trends as we as the second quarter.
Tax free shipping solutions and payments reported self install increased by $2 5 billion Euro so net increase of 22%.
Reuben Garner: Reuben Garner a revenue of 215, million% to 20% increase year on year, driven by particularly strong performance in tax official plus solution.
Reuben Garner: As I mentioned, given the strong focus on variable cost optimization, the group things or the contribution of $186 5 million rule, the 23% increase year on year.
Reuben Garner: Turning to adjusted EBITDA and there was a significant improvement year with an increase of 36% to 102 million Europe.
Reuben Garner: This boosted adjusted EBITDA margin by nearly five points to 47% with a strong 64% drop through.
Reuben Garner: And finally, we achieved a net income of 27 million your whole for the group at 66% year on year.
Reuben Garner: Turning now to the divisional performance.
Reuben Garner: Starting with tax official thing solution.
Reuben Garner: The division delivered a strong performance with an increase in completed six of 27% and an increase in revenue of 25% to 193 million.
Reuben Garner: That special thing solution Veeva named precede revenue of 193 million up 25% year on year.
Reuben Garner: Continental Europe contributed 162 million Youll suddenly, 21% increase while Asia Pacific achieved 31 million Youre holding the revenue Overlock cable, 49% growth driven by strong same store performance.
Reuben Garner: You can see here the slight difference in completed his growth of 27% and holding a gross of 25%. This is due to the positive trends in mix effect and some additional revenue four 5% and again very important to highlight no pricing pressure in the period. He has been offset by the negative continental mix of Citi.
Reuben Garner: Pathetic.
Reuben Garner: Then <unk>.
Reuben Garner: Given this strong focus on cost optimization, we didn't need another 27% increase in contribution to 165 from Daniel and his strong contribution margin of 85%.
Reuben Garner: Turning now to payments.
Reuben Garner: Payments and other revenue of $43 7 million your whole up 12% versus last year outpacing the 7% growth in states install and this was primarily driven by the higher margin on trees all the games.
Reuben Garner: Ethics solution generated 22 million you off revenue, a solid 10% increase year on year.
Reuben Garner: Wiring revenue grew to 25 million, you're reflecting a 14% increase while the integrated payment solutions business achieved a 0.9 million youre holding the venue they still need such a 2% year on year of course.
Reuben Garner: Here, we delivered a strong contribution growth across all the business line with the a novel age of 19, 3%.
Reuben Garner: Turning now to puts purchased solutions.
Reuben Garner: He had the business line. These ads revenue of 13 million is 6% year on year decline, while revenue was impacted by management decisions to move away from certain low contributions exact carrier contracts. The contribution goes after six months after variable costs is solid at 7%.
Reuben Garner: Turning now to adjusted EBITDA.
Reuben Garner: So last year, we delivered 75 million you'll in each one.
Reuben Garner: Then at this year with the additional contribution of 38 million your form and all the business line and fixed cost and FX impact of 11 million, you'll do group Theater, then that just didnt EBITDA of 102 million, you'll a double digit increase of 76%.
Reuben Garner: Strong revenue growth and high operating leverage profile of the business concept.
Consequently, the adjusted EBITDA margin increased by nearly five points to 47%.
Reuben Garner: Turning now to our just kidding.
Reuben Garner: Here you can see the breakdown of our DNA.
Reuben Garner: The adjusted DNA has increased by 6 million in the pay up to 24 million.
Reuben Garner: This is mainly due to two factors.
Reuben Garner: First there was a 2 million increase in the amortization of capitalized software, which reflects the increase in capex related to software development over the last two years.
Reuben Garner: Second depreciation of <unk> increased by 2 million, which included 1 million you will due to attention accounting related to short term lease in accordance with <unk> 16 standouts.
Reuben Garner: As a reminder, following the ramp up of the investments in software Capex in the coming years annual software Capex amortization should converge with the annual software Capex spent.
Reuben Garner: Turning now to the net finance cost.
Reuben Garner: Here, we are showing an increase of 5 million in net finance costs versus the same period last year.
Reuben Garner: This is mainly due to the increase in interest rates on the senior debt, which was seven 6% in the backyard. That's just six 1% in the same day last year.
And looking to the full year 'twenty four 'twenty five the expected senior debt cost is $45 3 million, which includes a saving of 3 million you hold from a swap will go Lee ball for half of the tenure of it.
Speaker Change: Turning now to the next slides.
Speaker Change: Here, we are showing the last 12 months adjusted EBITDA over the last eight quarters and as mentioned by Jacques in the introductions you can see here there has been a solid acceleration in the last 12 months such as till you get to 175 million you're up from 164 million in the previous quarter.
Speaker Change: Turning now to detail the cash flow.
Speaker Change: I found that adjusted EBITDA of 102 million, you'll deliver of Capex was 26 million in the pad and it's it's actually related to technology development.
Speaker Change: So the good thing about the sudden improvement in adjusted EBITDA less capital expenditure of 76 million, you'll have year on year improvement of 19 million you'll.
In Thailand are reflecting the normalization of walking catch that pretax and leverage free cash flow reached its 57 million you all best use.
Speaker Change: $11 7 million over last year.
Speaker Change: Finally, there has been an increase in net debt of 7 million year old that they proposed to analyzed in the next slide.
Speaker Change: At the end of September 24 group net debt reached 516 million year old consisting.
Speaker Change: Consisting of course financial debt of 610 million in cash and cash equivalents of 94 million.
This is resulting in a net leverage ratio of two nine times, which is a significant improvement from the four five times in September of last year.
Speaker Change: Turning now to the key takeaways.
Speaker Change: Here to conclude the financial sections, he had them in our lives.
Very pleased to report a very strong first half of the year with a significant increase in revenue of 20% to 215 million year old.
Speaker Change: Second, reflecting the strong revenue growth and high operating leverage profile of our business. We believe the strong improvement in adjusted EBITDA to 102 million, which is an increase of 36% of that reported last year and with a 64% drop through.
Speaker Change: Then if we look at the last 12 months I'm just kidding.
Speaker Change: There has been a continuous improvement over the last eight quarters, reaching now 175 million.
Speaker Change: From the 164 million in the Q1 quarter.
Speaker Change: Finally.
Speaker Change: We delivered a strong improvement of the net leverage ratio to two nine times. That's just four five times and Disempowered nurture and we reiterate our objective of being below two five times.
Speaker Change: So this concludes the financial sections and I will now hand over to Zach to present, the latest plans guidance and the long term growth drivers for the business.
Zach: Thanks Roxanne.
Zach:
Let's start the second thought.
Zach: Strange.
Zach: So in this slide.
You have the figures over October.
Zach: 24, which are really very similar than our Q2.
Zach: If we start by Europe, where we have the detail in your maintenance you see that we are reporting a 12% issued six increase was two 7% in Q2, so very similar and for APAC, we have 29% increase slightly slowing down versus Q2.
And we come back in immediate on that if.
If we make a focus on Europe.
Zach: So the gross.
As a percent.
Zach: During this October.
Zach: <unk>.
Zach: We see that Italy, and Spain remain very strong.
<unk> coming back.
Zach: The previous Olympics figures at 10%.
Zach: While during Q2.
Zach: The Olympics negative impact translate.
Zach: Only two 2% increase versus previous year.
Zach: If we switch on the right side of this slide.
Zach: Looking at the nationality, you see the demand necessarily junior.
Zach: Is the U S was 18% contribution and we are noticing there are still at very strong double digit increase of 10% October Ashish, 15% in Q2.
Zach: The European region.
Zach: Which are all diesel the EU resident.
Zach: Due to a 16% with.
Zach: 26% increase during October and for the last comment that will do is China, which represented 10%.
Zach: The.
Zach: Toward business.
Zach: Europe.
Zach: Grown by 50% to over.
Zach: In line with the 22% of their Q2, so overall our performance in Europe, which remained strong double digit 12%. Thank.
Speaker Change: Thank you you're ahead of Q2.
Speaker Change: If we move to the back as I was mentioning we have seen.
The slowdown of the EPA Bush at.
Speaker Change: At 29% versus 40% in Q2, mostly linked to Japan.
32% to four months. This is 50, 957% to four months.
Speaker Change: Mostly linked to the strengthening of the Japanese yen.
Speaker Change: They also if we look to the niche strategy.
Speaker Change: In this part of the World mainland China is the main contributor with 36%, we see very strong growth over there.
Speaker Change: Jay now with 50% in October which is more or less 90 degrees. The Q2 figures so 58%.
Speaker Change: Let's now turn to the short term guidance and the long term target.
Speaker Change: I will start by giving the guidance of 'twenty four 'twenty five.
Where we have adapted our guidance to 185 million.
Speaker Change: In Euro two to 210 five.
Speaker Change: With the following day, so we see very positive trends in the travel industry.
Speaker Change: <unk> in the high end segment.
She has benefited.
Speaker Change: From.
Speaker Change: Globally as you know.
Speaker Change: Around 85% of our consumer data.
Speaker Change: In order to go abroad and shop abroad.
Speaker Change: So the fact that the.
Speaker Change: The trove is industry remains strong he's a very good indicator for us.
Speaker Change: We are also pleased to report strong progress in the implementation of Lean management initiative.
Which translate into improvement in penetration.
Speaker Change: Although risk solution in average lines and usage and more usage by your customer which translate by.
Bruce: An incremental Bruce.
Bruce: She is just the market gross savings.
Bruce: Having said that obviously.
Bruce: Obviously I'm sure that all of you have noticed that the luxury market entity itself.
Bruce: Our reported figures, which are clearly showing slowdown.
Bruce: This has not been the case for the last quarter.
Bruce: For global Blue and you can see the cooperation between global Blue figures in the luxury market in the last two quarter.
Bruce: She is mainly thanks to our exposure to Africa maintained networking individuals, but having said that we are not totally immune.
Bruce: I would say from this market so with that in mind, but also the fact that during the year.
Bruce: We have.
Bruce: Decided to accelerate some investment.
Bruce: In a future growth driver.
Bruce: Chad.
Bruce: The impact of $5 million.
Bruce: The.
Bruce: Impact on additional fixed cost.
Bruce: We have.
Bruce: A guide to this 185 to 205 coming back just a second on this new initiative three.
Bruce: You mentioned, which will be providing further growth in the future.
Bruce: Your country, where the pipeline is very healthy and where.
Bruce: We believe that in the next two to three.
Bruce: In the next 15 months, we will be able to open two to three country and therefore, we are accelerating our investment in this field secondly, Japan, where the Japanese government has decided to change the regulation in 2026 going from there.
Bruce: System, where there is no validation like in most of the country to a system, where they will be validation and we're lacking Europe consumer will be installed of EOG and we.
After the validation and receive their refund.
Speaker Change: Thanks to that.
Speaker Change: We believe that.
Speaker Change: We will be able to increase the take up in Japan, which is as you know one of the lowest in the world having in mind that in terms of volume each one of the biggest so with that in mind, it's really a very sizable opportunity for us.
And therefore, we are ramping up in order to bring all our extra.
Speaker Change: Expertise and Knowhow that we have developed for 40 years outside of Japan into the Japan organization, which mean, they also some investment, but which will translate.
Speaker Change: Into real sizable opportunity of gross worse.
2026, and last but not least in the payment side.
Speaker Change: I've already talked a little bit about hospitality gateway a lot of traction but in the market there.
Speaker Change: With potential of growth in terms of rolling out a new hotel in the next 15 months and there also we have to speed up the growth in that perspective, so with all that in mind and as mentioned we have.
Speaker Change: And adjusted EBITDA guidance of 185 to 205.
Speaker Change: For the long term target.
Say it showed no change so we remain calm.
Speaker Change: We need to.
Speaker Change: I get to the 8% to 12% in terms of revenue growth with the drop through.
Speaker Change: 50% Capex between 40, and 45% neutral working capital in terms of our cash flow and a tax rate of between 24 and 26%.
Speaker Change: And as mentioned before.
Speaker Change: It looks on.
Speaker Change: We remain with.
Speaker Change: Long term objective to be below two five times EBITDA.
Speaker Change: Net debt in terms of net leverage.
Speaker Change: Last but not least I'd like to finish by the slide which really.
Speaker Change: Remind all of us.
Speaker Change: That.
Speaker Change: Global Louise well hedge.
Speaker Change: <unk> inflation or recession risk.
Speaker Change: Just to remind you that in the last four years.
Speaker Change: Sure.
Speaker Change: Underlying business, which is luxury or increase the price by 27%, thus use inflation, which was only breakage, 20%, which means that the revenue of global Blue has been indexed on visa.
Speaker Change: <unk> price increase and therefore, we have benefited from that on the other side.
Speaker Change: On the recession case in particular in Europe, we have seen in 2008, and 2009 that Google who was very resilient at that time being capable to post.
Speaker Change: Flat.
<unk> gross.
Speaker Change: While the luxury market was negated by eight in the travel market by 16.
Speaker Change: The main reason for that being that as I've already mentioned, we are really skew to this.
Speaker Change: I networking division and affluent network.
Speaker Change: Which are.
Speaker Change: That would say are more resilient to any economic shock so in summary, not sensitive to inflation.
Speaker Change: And resilient to a recession.
Speaker Change: Okay.
Speaker Change: So in conclusion very strong H ones figures I will not go into the detail but.
Speaker Change: I think the acceleration of the last 12 months Abd at 175 is a very good indicator on a capability to reach for the full year of 185 to 205, which is our guidance and as mentioned as introduction.
Speaker Change: We.
Speaker Change: Decided to increase our share buyback from 10% to $15 million with a program, which we do.
Speaker Change: Nothing.
Speaker Change: 2025.
Speaker Change: Thank you very much for listening.
Speaker Change: [music].