Global Blue Group Holding Ag ((GB)) has held its Q3 earnings call. Read on for the main highlights of the call.
The recent earnings call for Global Blue Group Holding Ag painted a picture of robust growth and financial health, albeit with a few challenges. The company reported strong revenue and EBITDA growth across all divisions, signaling confidence in achieving the higher end of their annual financial guidance. However, these positives were tempered by the loss of a significant client in Japan, increased finance costs, and lower contribution growth in the Payments segment.
Acquisition by Shift4
Global Blue announced its acquisition by Shift4 for $7.50 per common share, representing a 15% premium over the closing share price. This acquisition values the company at an enterprise value of $2.5 billion, marking a significant milestone in the company’s journey.
Strong Revenue Growth
The Group reported a revenue of 131 million Euros in Q3, marking a 20% year-on-year increase. This growth was driven by significant progress across all divisions, showcasing the company’s ability to expand its market presence and increase its financial performance.
Impressive EBITDA Increase
Global Blue’s adjusted EBITDA saw a remarkable 31% year-on-year increase to 52 million Euros. This led to an improvement in the adjusted EBITDA margin by 3.4 points, reaching 39.7%, highlighting the company’s operational efficiency and profitability.
Tax Free Shopping Solutions Growth
The Tax Free Shopping Solutions segment accounted for 74% of Group revenue, with a revenue growth of 22% to 98 million Euros. The segment also saw a completed Sales-in-Stores growth of 21%, underscoring its importance to the company’s overall revenue.
Improvement in Net Income
The Group’s adjusted net income increased by 58% to 14 million Euros, compared to 9 million Euros last year. This improvement reflects the company’s strong financial management and growth strategy.
Reduction in Net Leverage Ratio
Global Blue’s net leverage ratio improved significantly to 2.6 times from 3.6 times last year, indicating a healthier financial position and reduced financial risk.
Loss of Significant Client in Japan
The company faced a setback with the loss of a significant client in Japan, which negatively impacted revenue growth comparisons versus last year. This loss highlights the challenges in maintaining client relationships in a competitive market.
Increased Net Finance Costs
Net finance costs increased by 7 million Euros due to higher interest rates on senior debt. This rise in costs poses a challenge to the company’s financial management in the current economic climate.
Lower Contribution Growth in Payments
Despite overall revenue growth, the Payments segment experienced lower contribution growth due to the mix effect. The acquiring business grew faster than FX Solutions but with lower margins, affecting the segment’s profitability.
Forward-Looking Guidance
Global Blue provided guidance for the fiscal year 2024-2025, expecting to achieve an adjusted EBITDA between €185 million and €205 million. The company anticipates reaching the upper half of this range, driven by improvements in adjusted EBITDA over the recent quarters. CEO Jacques Stern emphasized the company’s strong performance, highlighting growth in revenue, EBITDA, margins, and drop-through rates. This guidance comes amid the recent acquisition announcement by Shift4, expected to close in Q3 2025, pending approvals.
In summary, Global Blue’s earnings call reflected a positive sentiment with strong growth in revenue and EBITDA, alongside improvements in financial health indicators. Despite challenges such as the loss of a client in Japan and increased finance costs, the company remains confident in achieving its financial targets, supported by its recent acquisition by Shift4.