TECHNOLOGY AND PAYMENTS
PROVIDER EMPOWERING
GLOBAL MERCHANTS
October 2020
Disclaimer
Forward Looking Statements. This presentation (this "Presentation") may contain certain "forward-looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995, Section 27A of the Securities Act and Section 21E of the Securities Exchange Act of 1934, as amended, including statements regarding Global Blue Group Holding AG's ("Globla Blue", "we" or "us") or its management's expectations, hopes, beliefs, intentions or strategies regarding the future. The words "anticipate", "believe", "continue", "could", "estimate", "expect", "intends", "may", "might", "plan", "possible", "potential", "predict", "project", "should", "would" and similar expressions may identify forward-looking statements, but the absence of these words does not mean that a statement is not forward-looking. These forward looking statements are based Global Blue's current expectations and beliefs concerning future developments and their potential effects on Global Blue. There can be no assurance that the future developments affecting Global Blue will be those that we have anticipated. These forward-looking statements involve a number of risks, uncertainties (some of which are beyond Global Blue's control) or other assumptions that may cause actual results or performance to be materially different from those expressed or implied by these forward-looking statements. These include commercial expectations and other external factors, including political, legal, fiscal, market and economic conditions and factors affecting travel and traveller shopping, including pandemics and applicable legislation, regulations and rules (including, but not limited to, accounting policies and accounting treatments) and movements in foreign exchange rates, all of which are difficult to predict and are beyond Global Blue's control. Except as required by law, Global Blue is not undertaking any obligation to update or revise any forward-looking statements whether as a result of new information, future events or otherwise.
Intellectual Property. All rights to the trademarks, copyrights, logos and other intellectual property listed herein belong to their respective owners and Global Blue's use thereof does not imply an affiliation with, or endorsement by, the owners of such trademarks, copyrights, logos and other intellectual property. Solely for convenience, trademarks and trade names referred to in this presentation may appear with the ® or ™ symbols, but such references are not intended to indicate, in any way, that such names and logos are trademarks or registered trademarks of Global Blue.
Industry and Market Data. This Presentation contains statistical data, estimates and forecasts that have been provided by Global Blue and/or are based on independent industry publications or other publicly available information, as well as other information based on Global Blue's internal sources. This information involves many assumptions and limitations and you are cautioned not to give undue weight to these estimates. We have not independently verified the accuracy or completeness of such data, including those contained in these industry publications and other publicly available information. Accordingly, none of Global Blue nor its affiliates and advisors makes any representations as to the accuracy or completeness of these data. Certain amounts described herein have been expressed in U.S. dollars for convenience and, when expressed in U.S. dollars in the future, such amounts may be different from those set forth herein.
Financial Information. The historic financial information respecting Global Blue contained in this Presentation has been taken from or prepared based on the historical audited financial statements of Global Blue, which have been prepared in accordance with the International Financial Reporting Standards ("IFRS") as adopted by the International Accounting Standards Board ("IASB"), which are not materially different from IFRS as issued by the EU.
Non-IFRSFinancial Measures. This presentation includes certain financial measures not prepared in accordance with IFRS, which constitute "non-IFRS financial measures" as defined by the rules of the U.S. Securities and Exchange Commission. These non-IFRS financial measures include: Adjusted EBITDA, Adjusted EBITDA Margin, Cash Flow Conversion, FCFE, Adjusted EBIT, Unlevered Net Income, Adjusted Net Income, Adjusted Net Income (Group Share), Adjusted Profit Before Tax, Adjusted Income Tax Expense, Leverage Ratio and Adjusted Operating Expenses.
Global Blue has included these non-IFRS financial measures because it believes they provide an additional tool for investors to use in evaluating the financial performance and prospects of Global Blue. These non-IFRS financial measures should not be considered in isolation from, or as an alternative to, financial measures determined in accordance with IFRS. In addition, these non-IFRS financial measures may differ from non-IFRS financial measures with comparable names used by other companies. Note however, that to the extent forward-lookingnon-IFRS financial measures are provided herein, they are not reconciled to comparable historic IFRS measures due to the inherent difficulty in forecasting and quantifying certain amounts that are necessary for such reconciliation.
2
- BUSINESS OVERVIEW
- TRANSACTION UPDATE
- INVESTMENT HIGHLIGHTS
- APPENDIX
3
A strategic technology and payments partner empowering merchants to capture the growth of international shoppers
TAX FREE SHOPPING
TECHNOLOGY SOLUTIONS
SMART DATA & BUSINESS INTELLIGENCE
TARGETED MARKETING SOLUTIONS & INTELLIGENT SALES TECHNOLOGY
ADDED-VALUE
PAYMENT SOLUTIONS
MERCHANTS | INTERNATIONAL | |
SHOPPERS | ||
Tax Free Shopping | (1) | Worldwide |
+300K Merchant Stores | 20-30% | |
Luxury Revenue |
Note: (1) When limiting luxury revenue to that in Tax Free Shopping countries (instead of worldwide), international shoppers represent 40-50% of luxury revenue (company estimate based on a sample of merchants in Tax Free Shopping countries). | 4 |
Source: Company Information. |
Global Blue at a glance
Tax Free Shopping Technology Solutions (TFS) | Added-Value Payment Solutions (AVPS) | ||||||||||
~85% of revenue | ~15% of revenue | ||||||||||
13M | 35M | €18.5B | 16M | 31M | €4.4B | ||||||
GB international | GB transactions | GB sales in store | GB international | GB transactions | GB sales in store | ||||||
shoppers | x | (SiS) | shoppers(1) | (SiS) | |||||||
€70B | €26B | ~70% | €455B | €28B | ~20% | |||||
addressable | addressed | GB market | addressable | addressed | GB market | |||||
market(2) | market(2) | share(3) | market(4) | market(4) | share(5) | |||||
REVENUE | ADJUSTED EBITDA | ADJUSTED EBITDA MARGIN | CASH FLOW CONVERSION(6) | |||
€420M | €171M | 41% | 78% | |||
(2019/20A) | (2019/20A) | (2019/20A) | (2019/20A) | |||
Note: Figures refer to the fiscal year ending 31 March 2020 (2019/20A), except where noted. See "Non-IFRS Financial Measures" above in the Disclaimer and Appendix for further information and a reconciliation of all historic non-IFRS financial measures included in this presentation. (1) Company estimate, extrapolated from GB sample set; (2) Addressable market estimate refers to total eligible SiS (excluding cross-border Tax Free Shopping, government-run Tax Free Shopping schemes, ineligible transactions, and countries without VAT) as at 2018/19A; addressed market as at 2018/19A refers to the sub-segment addressed by VAT refund operators, excluding SiS not issued and refunded and SiS related to in-house VAT refund merchants; neither gives effect to the impact of COVID-19 on such market; (3) Estimated third-party serviced market share based on Tax Free Shopping SiS as at 2018/19A;
(4) Addressable market estimate refers to addressable cross-border card spend on POS and ATM (excluding multi-currency processing market) as at 2018/19; addressed market as at 2018/19A reflects market-wide DCC penetration and acceptance rates; neither gives effect to the impact of COVID-19 on5 such market (5) Estimated market share based on DCC revenue as at 2018/19A; Global Blue AVPS SiS as percentage of the addressed market equals 16% as at 2018/19A. (6) Adjusted EBITDA less Capital Expenditures divided by Adjusted EBITDA. Source: Company Information.
Tax Free Shopping Technology Solutions
A win-win value proposition for merchants, international shoppers, customs & authorities, and Global Blue
INTERNATIONAL SHOPPER
PURCHASE
(including VAT)
€1,200
Purchase:
€1,000
VAT: €200
GLOBAL BLUE
SOLUTIONS
MERCHANT | CUSTOMS & |
AUTHORITIES | |
Issuing | Export Validation |
(Tax free form) | (Goods) |
SoftwareSoftware
REFUND AGENT
VAT: €200
Refunding
(VAT)
Payments Processing,
Software
€140
INTERNATIONAL
SHOPPER
VAT REFUND
€30
MERCHANT
REVENUE
€30
REVENUE
Note: This overview is presented for illustrative purposes only and not as a representation of actual amounts involved in the Tax Free Shopping process. Actual amounts may vary depending on a number of factors, including the revenue share split set out in | 6 |
agreements with merchants and market trends. Source: Company Information. |
Global Blue is the most comprehensive
INTEGRATED NETWORK in its category
KEY NETWORK FUNCTIONS
FRONT END | BACK END | |||||||||
INTEGRATION | ||||||||||
INTEGRATION | DATA | |||||||||
AFFILIATION OF | CONSUMER | TECH-ENABLED | WITH PAYMENT | |||||||
WITH POS & PSP | ||||||||||
AGGREGATION | PROVIDERS | |||||||||
NETWORK | BRANDING | PROCESSING | ||||||||
& ANALYTICS | ||||||||||
v | ||||||||||
CLIENTSREVENUE GROWTHNETWORKDRIVERSEXAMPLES (2) | CONSTITUENCIES | |||||||
INTERNATIONAL SHOPPERS | Retailers | Refund Agents / Payment Providers | ||||||
EMPLOYEE BENEFIT | ||||||||
Employers | Restaurants | |||||||
TRANSPORTATION | Fleet Operators | Petrol Stations | ||||||
7
Source: Company Information.
- BUSINESS OVERVIEW
- TRANSACTION UPDATE
- INVESTMENT HIGHLIGHTS
- APPENDIX
8
Business combination update
The transaction with Far Point Acquisition Corporation closed on August 28, 2020
The post-closing public company is incorporated in Switzerland and listed on the NYSE (GB and GB.WS), and maintains the Global Blue name Prior to the closing of the transaction, the selling shareholders took a number of unilateral actions to enhance public shareholder value:
- Waived €154M dividend entitlement and the right to a post-closemake-whole
- Committed to $75M Supplemental Liquidity Facility funded through the holdback of sponsors' proceeds
- The selling shareholders committed to convert €50M of convertible preferred shares into common stock
Debt refinanced with a new €630M 5-year term loan (starting margin of 2%) and RCF of €100M (drawn as a precautionary measure) At closing, Global Blue had a cash position of €265M and could access an additional ~€80M of liquidity, if needed
Selling parties received ~$200M of capital from PIPE investors, primarily from Ant Group, Third Point, and one smaller investor
- Additional PIPE investors who had committed to subscribe for in aggregate $110M did not consummate their subscriptions
- Global Blue and SL Globetrotter LP (an affiliate of Silver Lake) have commenced litigation with such investors for breach of contract
Global Blue board consists of the Chairman, the Global Blue CEO, two Silver Lake representatives, one Partners Group representative, one Ant Group representative, and two independent board members
9
Source: Company Information.
Detailed business combination overview
CAPITALISATION OVERVIEW (August 2020)
€M | xAdjusted | |
EBITDA(1) | ||
Revolver Credit Facility | 99 | 0.6x |
Term Loan (Principal Value) | 630 | 3.7x |
Gross Financial Debt | 729 | 4.3x |
Cash | (265) | (1.6x) |
Net Financial Debt | 464 | 2.7x |
Lease liability (current and non-current) | 37 | 0.2x |
NET FINANCIAL DEBT & LEASES | 501 | 2.9x |
POST-TRANSACTION ECONOMIC OWNERSHIP (%)
% Ownership | |
Silver Lake and Affiliates(2) | 57.4% |
Partners Group and Affiliates(3) | 23.7% |
Ant Group | 6.5% |
Third Point | 5.4% |
GB Directors, Executive Management & Other Employees | 5.2% |
Other Shareholders | 1.7% |
TOTAL | 100.0% |
See "Non-IFRS Financial Measures" above in the Disclaimer and Appendix for further information and a reconciliation of all historic non-IFRS financial measures included in this presentation. Capitalisation presented as at closing (28-Aug-2020), (1) 2019/20 EBITDA of €170.7M, (2) Corresponds to SL | 10 |
Globetrotter L.P., (3) Corresponds to Global Blue Holding LP (which is controlled by Silver Lake) of 22.2% and shares directly held by Partners Group 1.4%. Source: Company Information. |
- BUSINESS OVERVIEW
- TRANSACTION UPDATE
- INVESTMENT HIGHLIGHTS
- APPENDIX
11
Investment highlights
1 | 2 | 3 | 4 | 5 | ||||
POWERFUL MACRO | CLEAR | BUSINESS | ATTRACTIVE | SHORT-TERM |
DRIVERS OF GROWTH | MARKET & | STRATEGY | TRANSACTION-BASED | ACTIONS PAVING |
TECHNOLOGY | CREATING VALUE | BUSINESS MODEL | WAY FOR THE | |
LEADERSHIP | FUTURE |
12
1 2 3 4 5
Strong macro driven historical growth expected to continue
in the long term
PROOF POINTS | |||
A | EMERGING MARKETS | 97% | EM middle class vs. Tax |
Free Shopping transactions | |||
correlation(1) | |||
B | DIGITALIZATION | 2.0x | Success ratio increase in |
digital vs. non-digital | |||
higher(2) | countries | ||
VAT DYNAMICS | 1.4x | refund vs. non-VAT refund | |
C | Luxury sales growth in VAT | ||
faster(3) | countries | ||
GROWTH DRIVER | Next ~5 years expectation |
post COVID normalisation(7) | |
Arrivals of EM | +9% |
shoppers into Global | |
Blue's markets | CAGR(4) |
% of transactions | (5) |
54% to 89% | |
digitally validated |
Countries adopting a | >10 |
VAT refund scheme | additional |
countries(6) |
Note: This is forward-looking information - see Disclaimer "Forward Looking Statements". (1) R-squared of the regression between arrivals into Global Blue markets (implied by emerging markets middle class growth, based on a regression calculated between 2000/01 to 2018/19) and Global Blue | |
Tax Free Shopping transactions, calculated between 2009/10 and 2018/19; (2) Calculated from 2009/10 to 2018/19, based on a consistent set of Global Blue countries with digital validation and non-digital validation at the start and end date of the calculation; (3) Extra-regional personal luxury | 13 |
market growth in countries with VAT refund schemes and countries without, calculated from 2009/10 to 2018/19; (4) Forecast period is based on 5 years post COVID normalization (5) Forecast period is based on 3 years post COVID normalization; (6) Subject to decisions of the respective |
governments and as such may or may not eventually occur; (7) Normalization refers to travel demand returning to pre-COVID levels. Source: Company Information.
1 2 3 4 5
Global Blue's clear competitive differentiation
GLOBAL LEADERSHIP
>3x market share vs. next Tax Free Shopping competitor
70%
market share in
Tax Free Shopping(1)
PORTFOLIO OF ICONIC
LUXURY BRANDS
Longstanding relationships with iconic luxury brands
Low gross churn(2): -3%
Positive net churn(2):
+0.4%
Avg. tenure (years)(4): >20
FULLY INTEGRATED
IN-HOUSE TECHNOLOGY
PLATFORM
40+ PSP integrations
200+ POS integrations
18 customs integrations
13 payment partners
DEEP DOMAIN EXPERTISE
IN COMPLIANCE
>40
Tax free shopping countries(3)
where GB has deep regulatory know-how
Note: Figures refer to 2019 / 20A. Fiscal year ending 31 March. (1) Estimated third-party serviced market share, based on Tax Free Shopping SiS; (2) Last 6 years average % SiS. (3) Tax Free Shopping countries where Global Blue currently operates. (4) Average tenure based on the top 20 merchants | 14 |
Source: Company Information. |
1 2 3 4 5
Business strategy creating value
VOLUME GROWTH DRIVERS
LONG TERM VOLUME GROWTH | MANAGEMENT INITIATIVES |
MACRO DRIVERS | TO BOOST VOLUME GROWTH |
TAX FREE SHOPPING | ADDED-VALUE | |||
TECHNOLOGY | ||||
PAYMENT | ||||
EMERGING | SOLUTIONS | |||
VAT DYNAMICS | DIGITALIZATION | SOLUTIONS | ||
MARKETS | ||||
Increase penetration | Increase DCC penetration |
Increase market share | |
Cross-sell payment solutions | |
Expand market | |
REVENUE | INTELLIGENCE | MARKETING | SALES | EXPERIENCE |
GROWTH | Eye-Opening advisory | Data-driven solutions | Techniques and technology | Personalized customer |
to identify opportunities | to increase footfall | to convert footfall | journey to enhance | |
DRIVERS | for growth | to revenue | performance | |
STRATEGIC PARTNERSHIPS TO ENHANCE VALUE CREATION
15
Source: Company Information.
1 2 3 4 5
Ant Group partnership
PARTNERSHIP OVERVIEW | EASY REFUND PRODUCT (EARLY 2021 LAUNCH) |
Technology: Jointly develop digital TFS solutions and products to reduce friction, achieve paperless TFS and enhance the user experience for Alipay users
Marketing: Jointly develop a comprehensive marketing solution leveraging on Alipay's Marketing platform
Commercial: Promote acceptance of Alipay and its
Ecosystem Companies in Global Blue's network of MerchantsBRAND MINI-PROGRAMWITH CASH BACK OR EXTRA
REFUND COUPON (EARLY 2021 LAUNCH)
16
Source: Company Information.
1 2 3 4 5
Powerful financial model delivering earnings growth
and cash flow generation (2009/10 and 2019/20 - Fiscal years ended in March. The year 2019/20 refers
to 1 April 2019 to 31 March 2020)
GROWTH | PROFITABILITY | CASH FLOW CONVERSION | EARNINGS POWER | |||||||
Revenue, €M | Adjusted EBITDA, €M | Last 3 Years Average (2017/18 - 2019/20) | €M, 2019/20 | |||||||
Adjusted | 100% | 132 | ||||||||
420 | EBITDA | 23% | 41% | |||||||
margin % | ||||||||||
[(7%)] | ||||||||||
171 | (19%) | 81% | (30) | |||||||
+17% CAGR | 102 | |||||||||
160 | ||||||||||
36 | ||||||||||
Adjusted | ||||||||||
effective | ||||||||||
tax rate: | ||||||||||
22-23% | ||||||||||
2009/10 | 2019/20 | 2009/10 | 2019/20 | Adjusted | Capex | Adjusted | Adjusted EBIT(1) | Tax | Unlevered | |
EBITDA | EBITDA - | Adjusted Net | ||||||||
Capex | Income |
TRACK RECORD OF GROWTH | OPERATING LEVERAGE | HIGH CASH FLOW | EXCEPTIONAL TOTAL |
CONVERSION | SHAREHOLDER RETURNS | ||
Note: Fiscal year ending 31 March. Adjusted EBITDA defined as earnings before interest, taxes, depreciation and amortization, excluding other income and expense items that the Company considers as not related to ordinary business operations. Unlevered adjusted net income defined as | 17 |
earnings before interest and taxes less unlevered tax expense, before deducting non-controlling interest. See "Non-IFRS Financial Measures" above in the Disclaimer and Appendix for further information and a reconciliation of all historic non-IFRS financial measures included in this |
presentation. (1) Adjusted EBIT defined as earnings before interest and taxes, excluding amortisation from purchase price allocation related to acquired assets, predominantly related to the 2012 LBO. Source: Company Information.
1 2 3 4 5
LTM performance prior to COVID in line with long-term trends
Fiscal years ended in March | LAST 10 YEARS | LAST 5 YEARS | LTM-JAN 20 |
14% | (PRE-COVID) | ||
SALES IN | 7% | 9% | |
STORE | |||
11%
COMMENTARY
Structural long-term growth underpinned by macro drivers
Last 3-5 years impacted by FX and geopolitical volatility
REVENUE
9%
4%
LTM-Jan 20 (pre-COVID) growth reverting to the long- term growth trajectory
ADJUSTED | 17% | 18% |
EBITDA | 8% |
See "Non-IFRS Financial Measures" above in the Disclaimer and Appendix for further information and a reconciliation of all historic non-IFRS financial measures included in this presentation. "Last 10 Years" refers to 2009/10 to 2019/20 and "Last 5 Years" refers to "2014/15 to 2019/20" | 18 |
Source: Company Information. |
1 2 3 4 5
Diversified business
INTERNATIONAL | INTERNATIONAL | MERCHANT | |
SHOPPER'S ORIGIN | SHOPPER'S | BASE(2) | DIVERSIFIED BUSINESS MODEL |
DESTINATION | |||
across destination markets, | |||
Tax Free Shopping SiS, % total | Tax Free Shopping SiS, % total | Tax Free Shopping Revenue, % total | origin of international shoppers and merchants |
Other DM | 17% |
GCC | 8% |
USA | 7% |
Other EM | 12% |
SEA & | 15% |
India | |
Russia | 6% |
China | 36% |
Other APAC | 3% | |
Singapore | 9% | |
markets | Japan | 16% |
Other EMEA | 17% | |
& Americas | ||
Spain | 8% | |
Emerging | Germany | 7% |
markets | ||
~70% | Italy | 14% |
UK | 14% | |
France | 13% |
Merchant 1
Merchant 2
Merchant 3
APAC Merchant 4
Merchant 5
Merchants 6-20
Europe
~70% Other
6% | |
2% | |
2% | Top 20 |
2% | |
2% | ~30% |
16% |
69%
STRATEGIC POSITION IN APAC
enabling company to capture the growth in the region
EXPOSED TO EMERGING MARKETS
~70% of Tax Free Shopping SiS generated by international
shoppers from emerging markets
Note: Figures refer to the financial year ending 31 March 2020 (2019/20) (1) Includes EMEA and Latin America (2) Refers to Tax Free Shopping revenue split by individual merchants | 19 |
Source: Company Information. |
1 2 3 4 5
Tax Free Shopping recovery expected in 5 phases
Regional borders | International | End of the pandemic |
reopening | borders reopening | (treatment, vaccine |
or WHO declaration) |
STRICT SANITARY CONTROLS | |||||||
PHASE 1 | PHASE 2 | PHASE 3 | PHASE 4 | PHASE 5 | |||
BORDERS CLOSED | INTRA-REGIONAL | LONG-HAUL | GRADUAL RETURN | NORMAL | |||
STORES OPEN | TRAVELS RE-START | FLIGHTS RE-START | TO NORMAL |
WHERE
WE STAND
TODAY
ESTIMATED % TAX FREE SPEND VS 2019
< 5% | 10 - 20% | 20 - 40% | 60 - 80% | 95 - 105% |
Europe | ||||
< 5% | 10 - 20% | 60 - 80% | 90 - 100% | 100 - 110% |
Asia
The figures above represent assumptions used in management's long-termtargets and do not constitute guidance. Recovery may not occur linearly. Borders and stores may close, and travel may be curtailed again depending on how the pandemic continues to develop. This is forward-looking information - | 20 |
see Disclaimer. Source: Company Information. |
1 2 3 4 5
Group TFS financial performance
18%
16%
14%
12%
10%
8%
6%
4%
2%
0%
% ISSUED TAX FREE SPEND vs. Last Year April - Sept 2020
16% EUROPE
14% GRAND TOTAL
8% APAC
Week 15 | Week 17 | Week 19 | Week 21 | Week 23 | Week 25 | Week 27 | Week 29 | Week 31 | Week 33 | Week 35 |
APRIL | MAY | JUNE | JULY | AUGUST | SEPTEMBER |
21
Source: Company Information.
1 2 3 4 5
Management's strategy during COVID
PERSONNEL & NON-PERSONNEL SAVING PLAN
As COVID-19 spread and led to travel bans and lock-down, management undertook several cost initiatives, with a particular focus on the core business and adopting the best alternative to scale back operations as activity resumes
Management adopted two cost savings plans:
- Short Term Action Plan
- Usage of government support (furlough or partial employment schemes) in countries where such schemes exist
- Long Term Action Plan
- Evaluated and sized long-term headcount reduction, while preserving core knowledge and assessed business resumption scenarios
- These long term plans were launched for all countries without government support and implemented at the end of support schemes in other countries (replacing the short term plans)
1 | PRODUCT INITIATIVES | ||||||||
Despite budget decrease, several new products are ready for pilot or roll-out | |||||||||
MOBILE FIST | MARKETING & INTELLIGENCE | ||||||||
• | Mobile Self-Issuing | • | Drive to Store | ||||||
• | Alipay Easy Refund | Campaign Manager | |||||||
• | Mobile Self-Refunding | • | Alipay Mini-program | ||||||
Enhancements | with Cash Back | ||||||||
Coupon | |||||||||
• | Data warehouse | ||||||||
2 | B2B MARKETING INITIATIVES |
B2B marketing activities remained relevant to client during COVID
Global Blue Observatory | Coronavirus Weekly Update |
Webinar for merchants | Newsletter |
3COMMERCIAL INITIATIVES
Service valuable clients and win new business
Tender won (Aug-2020)
22
Source: Company Information.
1 2 3 4 5
EBITDA expenditures cost actions
(€M)
A | |||||||||||||||||||||||||||||
250 | |||||||||||||||||||||||||||||
SHORT-TERM COST REDUCTION | |||||||||||||||||||||||||||||
€80M Savings | |||||||||||||||||||||||||||||
B | |||||||||||||||||||||||||||||
leveraging available government | |||||||||||||||||||||||||||||
VARIABLE | programs & limited volume | LONG | -TERM COST REDUCTION | ||||||||||||||||||||||||||
€50M Savings | |||||||||||||||||||||||||||||
redundancies | |||||||||||||||||||||||||||||
160 | |||||||||||||||||||||||||||||
& resumed volume | €50M of Long-term | ||||||||||||||||||||||||||||
FIXED | actions (12 months | ||||||||||||||||||||||||||||
run-rate) | |||||||||||||||||||||||||||||
non personnel | 110 | ||||||||||||||||||||||||||||
FIXED personnel
EBITDA | Volumes driven | Total fixed | Short term actions | Cost base | Reduced cost saves | Cost base post |
Expenditures | cost reduction | costs | (12 months run-rate) | post short term | (12 months run-rate) | long term |
actions | actions |
FIXED OPEX
Note: Figures refer to the financial year ending 31 March 2020 (2019/20). EBITDA Expenditures relate to Operating expenses (excluding exceptional items and depreciation and amortization), as defined and reconciled in the Appendix. Short and long-term cost actions are estimated, thus should not be | 23 |
relied upon as being indicative of future results. This is not a forecast. This is forward-looking information - see Disclaimer. See "Non-IFRS Financial Measures" above in the Disclaimer and Appendix for further information and a reconciliation of all historic non-IFRS financial measures included in this | |
presentation. As we continue to refine the cost take-out assessment and as various governments modify their programs, the numbers herein are subject to change. Source: Company Information. |
1 2 3 4 5
Illustrative EBITDA at various potential recovery levels
COST TAKE-OUT | ADJUSTED EBITDA | |||||||||||
42.3% | ||||||||||||
52.3% % Adjusted
EBITDA Margin
Future re-hires for positions deemed semi-fixed, which are made redundant today
(1)
ILLUSTRATIVE TOP-LINE RECOVERY RANGE (% OF PRE-COVID REVENUE)
Note: Simulation based on illustrative assumptions and should not be relied upon as being indicative of future results. This is not a forecast. This is forward-looking information - see Disclaimer. See "Non-IFRS Financial Measures" above in the Disclaimer and Appendix for further information and | 24 |
a reconciliation of all historic non-IFRS financial measures included in this presentation. (1) Jan-2020 LTM EBITDA presented assuming bonus normalization. Source: Company Information. |
1 2 3 4 5
Short-term fixed cash expenditures and liquidity
Current liquidity implies fixed cash expenditures to be covered well into calendar year 2022
POST-ACTIONS FIXED MONTHLY EXPENDITURES(4) (before taxes) | LIQUIDITY BUILD (August 2020) |
€347M
Additional liquidity (3) | ||||||
€82M | ||||||
€2.5M | €13.5M | |||||
€1.2M | €11.0M | Incremental (1) | ||||
€1.0M | Long-term | |||||
Interest(2) | Expenditure | |||||
€2.1M | Payments | Cash | ||||
Lease | ||||||
€6.7M | Capex | €265M | ||||
Average Mar-Aug monthly | ||||||
cash savings ~€11M | ||||||
EBITDA (1) | Short-term(4) | Long-term(1) | ||||
Expenditure | Fixed Monthly Total | Fixed Monthly Total |
Source: Company Information. These amounts are estimates and are forward-looking information - see Disclaimer. As we continue to refine the cost take-out assessment and as various governments modify their programs, the numbers herein are subject to change | 25 |
(1) Monthly expense implied from 12 month run-rate based on the Short-term Actions (€80M annual cost take-out). As Global Blue transitions to the Long-term Actions the monthly expenses would increase to €9.2M; (2) Reflects impact of refinancing based on margin at closing; (3) Committed |
Supplemental Liquidity Facility (funded by certain selling shareholders) of €63M, uncommitted local credit lines of €18M, and RCF availability of €1M; (4) Expenditures presented herein exclude monthly change in net working capital and monthly variable expenditure.
Conclusion
1 | 2 | 3 | 4 | 5 | ||||
Long-term drivers | Competitive | Clear strategy to | Transaction-based | Short-term measures |
remain intact, | differentiation | create value | model delivering | supporting recovery |
despite COVID-19 | represents a strong | earnings growth | and enhancing | |
impact | asset | and cash flow | margin when | |
generation | volumes return |
26
- BUSINESS OVERVIEW
- TRANSACTION UPDATE
- INVESTMENT HIGHLIGHTS
- APPENDIX
- Additional company materials
27
International management team with relevant expertise
Average 10+ years at Global Blue(1)
Jacques Stern | Loïc Jenouvrier | |||||||||||||||||||||
Chief Executive Officer | Chief Financial Officer | |||||||||||||||||||||
5 | 4 | |||||||||||||||||||||
Pier F. Nervini | Laurent Delmas | Greg Gelhaus | Tomas Mostany | Damian Cecci | ||||||||||||||||||
MARKETS | Europe North, | Europe South | APAC | PRODUCTS | Tax Free Shopping | Added-value | ||||||||||||||||
Central and Global | Technology | Payment Solutions | ||||||||||||||||||||
Accounts | Solutions | |||||||||||||||||||||
16 | 4 | 5 | 17 | 16 | ||||||||||||||||||
SUPPORT | J. Henderson-Ross | Jorge Casal | ||||||||||||||||||||
Legal | New Markets, Public | |||||||||||||||||||||
Affairs & Americas | ||||||||||||||||||||||
5 | 21 | |||||||||||||||||||||
- Years at Global Blue
OPERATIONS&IT | Fabio Ferreira | Jeremy Taylor | |
Technology | Operations | ||
5 | 21 | ||
28
Note: (1) Based on the average tenure of the executive committee (defined as the management team presented herein), including experience of acquired companies. Source: Company Information.
VAT refund regulatory framework
WHAT IS VAT & VAT REFUND SCHEME?
VAT: Value-added Tax is an indirect tax on the domestic consumption of goods and services, except those that are zero-rated (such as food and essential drugs) or are otherwise exempt (such as exports).
VAT refund scheme: International shoppers can claim a refund on the VAT they have paid in destination countries on eligible goods while exiting the country/region of purchase(1)
PARAMETERS OF THE VAT REFUND SCHEME | ||
Eligible goods | ||
VAT | • Specific list for each country | |
• | Example of countries where alcohol or tobacco are not eligible | |
for Tax Free Shopping: Czech Republic, Greece, Lithuania, | ||
Belgium, France, Morocco, Russia, Slovenia and South Korea |
Eligible beneficiary
- Usually: All non-residents of the country/region
- Example of countries where domestic purchaser exporting goods are eligible to Tax Free Shopping: Japan/Australia
VAT rate
% • Ranges between 15-25% in European countries(2) and 5-10% in Asian countries
Minimum purchase amount
• Specific to each country
• France: €175.01, Italy: €154.95, Spain: €0, UK: £0, Japan: JPY 5,000
Note: (1) The EU VAT Directive also requires all EU member states to operate a VAT refund scheme for non-EU residents; A unanimous decision from all EU member states for any change to the EU VAT Directive; (2) The EU VAT Directive provides that each EU member state must | 29 |
apply a standard VAT rate of at least 15% and there is no maximum rate that can be set. Source: Company information. |
Positive VAT dynamics are a strong driver
of luxury sales growth
INCREASING NUMBER OF COUNTRIES ARE ADOPTING VAT
Number of countries and territories with VAT
180(1)
+160
20
1979/80 | 2018/19 |
INCREASING NUMBER OF COUNTRIES ARE ADOPTING VAT REFUND
SCHEMES
Number of countries operating a VAT refund scheme
73
+72
1
1979/80 | 2018/19 |
VAT REFUND COUNTRIES EXHIBIT HIGHER LUXURY SALES GROWTH
Luxury market growth (CAGR 2009/10 - 2018/19)
~10%
+3ppts
~7%
~5%
DomesticNon-TFS countriesTFS countries
Personal | |
Extra-regional luxury | |
luxury | |
Note: (1) Includes territories with different VAT rules than sovereign countries, that are counted as separate countries. | 30 |
Source: Company information, OECD. |
Increasing VAT rates drive growth of Tax Free Shopping
environment
LONG-TERM(1) VAT EVOLUTION ACROSS MAJOR DESTINATION MARKETS | |||||||||||||||||||||||||||||
30% | |||||||||||||||||||||||||||||
25% | DEVELOPMENTS | ||||||||||||||||||||||||||||
Finland | Italy | ||||||||||||||||||||||||||||
EUROPE | 20% | France | 77% of European OECD members | ||||||||||||||||||||||||||
Netherlands | increased their VAT rate since 2006 | ||||||||||||||||||||||||||||
• | Germany: 16%-19%(2007-2008) | ||||||||||||||||||||||||||||
15% | |||||||||||||||||||||||||||||
• | Spain: 16%-21%(2010-2013) | ||||||||||||||||||||||||||||
Germany | Spain | UK | |||||||||||||||||||||||||||
• | Italy: 20%-22%(2011-2015) | ||||||||||||||||||||||||||||
10% | |||||||||||||||||||||||||||||
5% | Singapore | ||||||||||||||||||||||||||||
ASIA | Japan | ||||||||||||||||||||||||||||
0% | |||||||||||||||||||||||||||||
1992/93 | 1993/94 | 1994/95 | 1995/96 | 1996/97 | 1997/98 | 1998/99 | 1999/00 | 2000/01 | 2001/02 | 2002/03 | 2003/04 | 2004/05 | 2005/06 | 2006/07 | 2007/08 | 2008/09 | 2009/10 | 2010/11 | 2011/12 | 2012/13 | 2013/14 | 2014/15 | 2015/16 | 2016/17 | 2017/18 | 2018/19 | 2019/20 |
31
Source: Company information. (1) Chart excludes temporary VAT movement implemented by governments during COVID
UK Tax Free Shopping scheme - situation overview
On Sept. 11th, the UK Government announced its decision to abolish, from Dec.31st, 2020, the VAT Retail Export Scheme (VAT RES) which allowed international visitors to the UK to reclaim the VAT paid on goods purchased, but not consumed in the UK
POLITICAL | FINANCIAL | |
OPERATIONAL
- Not extend Tax Free Shopping benefit to EU Shoppers (in the context of Brexit)
- Remove an implicit subsidy to London (government considered Tax Free Shopping to favour London over the rest of the UK)
- Save £500M per annum in refunded VAT to non-EU shoppers
- Avoid offering refunds to EU citizens (in the context of Brexit)
Customs unable to manage additional volume from Tax Free Shopping to EU shoppers
(as, unlike other countries, the UK has not digitalized its paper-based customs system)
Note: Information presented herein portrays the UK government's published rationale and not Global Blue's view. | 32 |
Source: Company information. |
UK Tax Free Shopping scheme - impact and action plan
Retailers, airports, and tax-free shopping ecosystem all believe that the decision to eliminate the scheme is
misguided and are working together to convince the government to reverse the decision
Tax Free Shopping ecosystem executing on strategy
to convince the UK government to reverse their decision
POLITICAL
- Tax Free Shopping benefits extend beyond London
- Merchants / Other UK cities engaging with their elected officials regarding negative impact of decision
FINANCIAL
- Demonstrate financial arguments are incorrect
- Evidenced by economic study and survey
OPERATIONAL
- GB proposed a transition period
- After the transition period, the UK would digitize its customs systems (companies within the Tax Free Shopping ecosystem have offered to finance the cost)
Economic study highlights the negative impact
on the UK from the government's decision
Abolishing Tax Free Shopping | Extending Tax Free Shopping | |
Scheme | Scheme to EU residents | |
Variation in number of tourists | (5.0)M | +1.0M |
Variation in tourist spendings (in £) | (6,000)M | +740M |
Impact on GVA(1) (in £) | (9,300)M | +1,100M |
Impact on tax revenues (in £) | (3,500)M | +180M |
Impact on number of jobs | (140)K | +20K |
Survey indicates shoppers less likely to shop
and spend in UK following the government decision
62% | 95% | 93% | |||
of respondents | would spend less | would consider | |||
will be less likely | on shopping | changing where | |||
to visit the UK | in the UK | they shop overseas | |||
Respondents indicated that they | |||||
would shop in other EU countries | |||||
(where GB is present) | |||||
33 |
Source: Company information. Survey run to 40K+ Tax Free Shoppers around the world (between Sept. 14th and 16th). (1) GVA: Gross Value Added measures the total direct & indirect revenue generated from tourists' spending
Additional countries may implement VAT refund schemes
COUNTRIES LIKELY TO ADOPT VAT REFUND SCHEMES IN THE NEXT 5 YEARS(1) | P Countries recently |
approved | |
HIGH TO MEDIUM PROBABILITY | MEDIUM TO LOW PROBABILITY |
Countries currently with no VAT or GST and no VAT refund scheme
Countries currently with VAT or GST and no VAT refund scheme
Countries currently with VAT or GST and with VAT refund scheme managed by the government
Kuwait | Brazil | USA | Iran |
P
Peru | Kazakhstan | Chile | Saudi Arabia Costa Rica | India | Canada | Philippines Venezuela New Zealand |
P
Colombia | Serbia | Sri Lanka | Indonesia | Australia(2) | Azerbaijan | Thailand |
Note: (1) Subject to decisions of the respective governments, as such may or may not eventually occur; (2) Global Blue supports Australia government scheme through back-office Tax Free Shopping processing. As such, Australia is included in both Global Blue countries and | 34 |
government-run schemes. Source: Company information. |
Eye-Opening advisory to identify opportunities for growth
We use data to help merchants understand the international shopper opportunity
BENCHMARK TAX FREE | IDENTIFY INTERNATIONAL | ADAPT PRODUCT | ADAPT TACTICAL DECISIONS |
SHOPPING SOLUTIONS | SHOPPER TRAFFIC OR | ASSORTMENT TO LATEST | BASED ON SHORT-TERM |
PERFORMANCE | SPEND OPPORTUNITIES | INTERNATIONAL TREND | FUTURE OUTLOOK |
35
Source: Company information.
Macro drivers directly tied to Global Blue's growth equation
A EMERGING MARKETS
70% international shoppers from emerging markets
TAX FREE SHOPPING ADDRESSABLE MARKET: €70B SALES IN STORE
B VAT DYNAMICS
Increasing number of VAT refund schemes and increasing rates
C DIGITALIZATION
54% of Global Blue
export validations are digital(2)
A | Number of | B | Average spend | |
per trip | ||||
traveller trips | ||||
& per shopper | ||||
• Emerging market (EM): | • Purchasing power | |||
Middle class wealth growth | in local currency | |||
• Developed countries: | • Extra-regional | |||
GDP growth | price differential(4) |
C
Success Ratio
39%(1) currently
- Awareness
- Ease of issuing, export validation and refunding
D DIGITALIZATION OF PAYMENTS
69% of transactions are digital(3)
DYNAMIC CURRENCY CONVERSION ADDRESSABLE MARKET: €455B SALES IN STORE
D | Addressable | D | % of merchants | Acceptance Rate |
digital payments | offering DCC | 28% currently(5) |
Note: Figures refer to 2018/19. (1) Presented on a transaction basis, which translates to 49% on a SiS basis; (2) SiS in countries with digital export validation as % of total Global Blue SiS; (3) Refers to percentage of payments that are card / electronic (non-cash). Card transactions | |
include consumer payments from charge cards, credit cards, debit cards, and pre-paid cards and excludes electronic direct and automated clearing house transactions. Based on Consumer Payment Transaction Volume in select markets; based on China, Japan, Australia, Canada, | |
USA, France, Germany, Greece, Italy, Netherlands, Portugal, Spain, and the UK; (4) Defined as the difference in retail price, of the same product, between the origin and destination country, before having the VAT, that is included in the destination country retail price, refunded; | 36 |
(5) Global Blue SiS acceptance rate calculated on SiS basis. |
Source: Company Information, Euromonitor International (Consumer Finance Edition 2020, based on September 2019 estimates).
Group cost structure drives operating leverage
COST BREAKDOWN(1) (AS OF 2019/20A)
Adjusted operating costs indexed to 100
Issuing & Validation
DEFINITIONS
VARIABLE
▪ Issuing & Validation: Costs related to tax free form |
issuance and validation |
Total
Costs
59%(2)
Adjusted
EBITDA
41%
G&A
19%
Fixed Costs
64%
Technology
Operating
Costs
11%
Sales &
Marketing
21%
(Transactions)
7%
Refunding
Processing 9%
3%
Acquiring (Processing volumes) 9%
Variable
Costs
36%
Refunding (VAT refund) 19%
Processing (Transactions) 2%
▪ Acquiring: Costs related to financial processing business | |
▪ | Refunding: Fee paid to agents and airports |
▪ Processing: Transaction processing costs | |
▪ | Variable costs benefit from operating leverage |
FIXED
- Refunding / Processing: personnel costs
- Sales & Marketing: Cost of sales force
- Technology Operating Costs: Costs related to IT
- G&A: Includes management, product, finance, office costs, etc.
- Fixed costs generally evolve in line with or slightly above inflation
KEY TAKEAWAYS
Strong operating leverage as a result
of the cost base being ~60% fixed
Variable costs tied to specific financial KPIs,
() = Driver
not simply Group revenue
Source: Company Information. See "Non-IFRS Financial Measures" above in the Disclaimer and Appendix for further information and a reconciliation of all historic non-IFRS financial measures included in this presentation. | 37 |
Note: (1) Calculated on the basis of adjusted operating expenses, i.e. operating expenses excluding depreciation and amortization, and other operating income and expenses (2) Adjusted operating expenses as a percentage of revenue. |
Well-invested business to support future growth
Fiscal years ended in March | 2014/15 | 2015/16 | 2016/17 | 2017/18 |
2018/192019/20
CAPEX | 27.8 | 26.6 |
€M
7.36.7
€15-16M depreciation | |
D&A | related to the right of use |
asset, as a result of the |
33.4
30.5
37.7
39.1
16.3
€M(1) | adoption of IFRS 16 | ||
5.2 | 6.6 | 8.5 | 11.9 |
15.2
22.8
15.3
Note: (1) Excludes the amortization of intangible assets acquired through business combinations | 38 |
Source: Company Information. |
Adjusted EBIT to Adjusted net income (group share) bridge
ADJUSTED EBIT TO ADJUSTED NET INCOME (GROUP SHARE) BRIDGECOMMENTARY
2019/20, €M
170.7 | I | I | Other depreciation and amortization exclude | |||
amortization of intangible assets acquired through | ||||||
(39.1) | business combinations | |||||
131.6 | II | II | Net finance costs include interest expenses related to | |||
interest bearing debt, lease liabilities interest, net FX | ||||||
(31.8) | 99.8 | gain/loss, finance income and other finance expenses | ||||
III | ||||||
III | Adjusted tax rate of ~23% | |||||
(22.6) | 77.2 | 71.9 | IV | Mainly attributable to JV in Japan, a country that has the | ||
IV | ||||||
potential to grow faster than the Group | ||||||
(5.2) |
KEY TAKEAWAYS
Adjusted | Other D&A Adjusted | Net finance | Adjusted | Adjusted | Adjusted | Minority | Adjusted | |
EBITDA | EBIT | costs | PBT | Income | Net Income | Interest | Net Income | |
Tax | (Group | |||||||
Share) | ||||||||
As % of | 40.6% | 31.3% | 23.7% | 18.4% | 17.1% | |||
revenue | ||||||||
High Adjusted EBIT to Adjusted Net Income conversion driven by efficient organizational & capital structure
Note: See "Non-IFRS Financial Measures" above in the Disclaimer and Appendix for further information and a reconciliation of all historic non-IFRS financial measures included in this presentation. | 39 |
Source: Company Information. |
Resilient business performance during global financial crisis
TRAVEL INDUSTRY | LUXURY INDUSTRY | GLOBAL BLUE | |||||||||
Passenger revenue, rebased to 100(1) | Personal luxury goods market, rebased to 100 | Tax Free Shopping sales in store, rebased to 100(2) | |||||||||
CAGR: | CAGR: | CAGR: | |||||||||
0% | 2% | 17% | |||||||||
Global financial crisis | Global financial crisis | Global financial crisis | |||||||||
Resilient during | |||||||||||
105 | downturns, with flat | ||||||||||
YoY performance | |||||||||||
100 | 100 | 100 | |||||||||
during financial crisis | |||||||||||
(16%) | (8%) | 100 | 100 | ||||||||
92 | (0%) | ||||||||||
84 |
Reversion to the mean
with SiS growth
"catching up" when the concerns diminish
136
2008A | 2009A | 2010A | 2008A | 2009A | 2010A | 2008A | 2009A | 2010A |
Resilient performance during economic downturn with less compression vs. the travel & luxury markets, as well as
a stronger reversion / "catch-up" growth thereafter
Note: (1) Estimated revenue of the global passenger airline industry (2) Refers to calendar year (December year end) | 40 |
Source: IATA, Altagamma, Company Information. |
FX impact felt instantly
TOTAL UK TAX FREE SHOPPING SIS DEVELOPMENT POST BREXIT
REFERENDUM
YoY growth
Brexit Referendum | ~18%(1) | ||
USD/GBP depreciation | |||
44% | |||
post Brexit | 43% | ||
referendum | |||
36%
28%
6%
Jun 2016 | Jul 2016 | Aug 2016 | Sep 2016 | Oct 2016 |
KEY TAKEAWAYS
Relative FX rates (origin vs. destination) impact
international shoppers' Tax Free Shopping
demand,
particularly for EM shoppers
Tax Free Shopping demand adjusts instantly to FX
Brexit-drivenGBP-depreciation
impacted demand on the same day
Note: (1) Refers to USD/GBP change between 23 June 2016 and 23 October 2016 | 41 |
Source: Company Information. |
Strong correlation between FX movements
and SiS with high elasticity for Chinese Shoppers
CHINESE DEMAND IS HIGHLY ELASTIC VIS-À-VIS FX MOVEMENTS
THOUGH STABLE AND GROWING AT ~10%(1) OVER THE LONGER-TERM
Relationship between Chinese SiS in Eurozone and FX CNY/EUR
Chinese Tax Free Shopping SiS in Eurozone, YoY growth | FX CNY/EUR, YoY growth |
100% | 30% |
Correlation = 0.92(2) | |
+3.0 | |
Elasticity | |
50% | 15% |
0% | 0% |
(50%) | (15%) | ||||||||||
Apr 2014 | Feb 2015 | Dec 2015 | Oct 2016 | Aug 2017 | Jun 2018 | Apr 2019 | |||||
Chinese SiS | (YoY growth) | FX CNY/EUR | (YoY change) | ||||||||
RUSSIAN MACRO VOLATILITY RESULTING
IN LIMITED IMPACT DUE TO LOWER ELASTICITY
Relationship between Russian SiS in Eurozone and FX RUB/EUR
Russian Tax Free Shopping SiS in Eurozone, YoY growth | FX RUB/EUR, YoY growth |
60% | 40% |
Correlation = 0.94(3) | +1.3 | |
Elasticity | ||
30% | 20% |
0% | 0% |
(30%) | (20%) |
(60%) | (40%) | ||||||||
Apr 2014 | Feb 2015 | Dec 2015 | Oct 2016 | Aug 2017 | Jun 2018 | Apr 2019 | |||
Russian SiS (YoY growth) | FX RUB/EUR (YoY change) | ||||||||
Note:
(1) 5 year SiS 2013/14 - 2018/19 CAGR (2) Methodology: regression analysis using the least squares method between YoY change of FX and YoY change of SiS (CNY versus EUR, and Chinese SiS in the Eurozone)42
(3) Methodology: regression analysis using the least squares method between YoY change of FX and YoY change of SiS (RUB versus EUR, and Russian SiS in the Eurozone); Source: Company Information.
Dynamic Currency Conversion Solution
A win-win value proposition for acquirers, merchants, international shoppers, and Global Blue
INTERNATIONAL SHOPPER
€10
ACQUIRER
FEE
PURCHASE | International shopper | International | Issuing bank | ||
AMOUNT: | prompted in local or | shopper selects | debits shopper | ||
£900 | home currency | home currency | in home currency | ||
Currency decision: | €1,000 + €30 Fees | FEES: €30 | €10 | ||
£900(1) / €1,000 | |||||
MERCHANT
REVENUE
GLOBAL BLUE
SOLUTION
Software | Software | Software | €10 | |
REVENUE |
Note: This overview is presented for illustrative purposes only and not as a representation of actual amounts involved in the DCC process. Actual amounts may vary depending on a number of factors, including the revenue share split set out in agreements with acquirer and merchants, | 43 |
expected DCC acceptance rates and market trends. (1) FX fees charged by the issuing bank for the conversion of the £900 purchase amount is equal to or greater than the Global Blue dynamic currency conversion fees. Source: Company Information. |
Terms of Global Blue's new credit facilities
Term Loan | Revolving Credit Facility | ||||
Borrower | Global Blue Acquisition B.V. | Global Blue Acquisition B.V. | |||
Issue | Term Loan | Revolving Credit Facility | |||
Use of Proceeds | Refinancing of existing debt in connection with the | Financing or refinancing of working capital and/or general | |||
transaction | corporate purposes | ||||
Amount | €630M | €100M | |||
Currency | EUR(1) | ||||
Security / Ranking | Senior Secured | Senior Secured | |||
Maturity | 5.0-yr (bullet repayment) | 5.0-yr (revolving facility) | |||
Total Net Leverage | |||||
> 4.00x | 2.75% | 2.50% | |||
Margin | ≤ 4.00x > 3.50x | 2.25% | 2.00% | ||
Ratchet | ≤ 3.50x > 3.00x | 2.00% | 1.75% | ||
≤ 3.00x > 2.50x | 1.75% | 1.50% | |||
≤ 2.50x > 2.00x | 1.50% | 1.25% | |||
≤ 2.00x > 1.50x | 1.25% | 1.00% | |||
≤ 1.50x | 1.00% | 0.75% | |||
Floor | 0.00% | ||||
Commitment Fee | N.A. | 30% of relevant Margin | |||
Covenant will be tested semi-annually. Total Net Leverage to not exceed 5.00x in the 1st test, 5.00x in the 2nd test, | |||||
Financial Covenants | 4.75x in the 3rd test, 4.75x in the 4th test, 4.50x in the 5th test, 4.50x in the 6th test, 4.25x in the 7th test, 4.25x in | ||||
the 8th test, 3.50x in the 9th test and test thereafter | |||||
TLB maturity extended from
2022 to 2025
Starting margin reduced from
~350bps in prior facility
First covenant test in Sep 2021
44
Note: (1) In the case of the Revolving Facility, optional currencies include GBP, USD, SEK, CHF, NOK or DKK and in the case of a Letter of Credit, GBP, USD, SEK, CHF, NOK, DKK, SGD, LBP, AUD or PLN. Source: Company Information.
- BUSINESS OVERVIEW
- TRANSACTION UPDATE
- INVESTMENT HIGHLIGHTS
- APPENDIX
- Financials and reconciliations
45
Simplified capital structure
(31/08/2020)
Total Securities | |||||
(M)(1) | Price ($) | Value ($M) | Value (€) | ||
Ordinary Shares | 173.8 | 9.77 | (2) | 1,698 | 1,432 |
Series A Preferred Shares | 17.8 | 10.00 | (3) | 178 | 150 |
Total Equity Value | 1,876 | 1,582 | |||
Term Loan | 747 | 630 | |||
Drawn RCF | 118 | 99 | |||
Capitalized Leases | 44 | 37 | |||
Cash | (314) | (265) | |||
Total Adjusted Net Debt | 595 | 501 | |||
TEV | 2,471 | 2,083 | |||
Source: Company Information, Bloomberg. EUR/USD Exchange Rate 1.186. (1) Table presented on an as converted-basis, assuming €50M of Series A Preferred Shares converted as per initiative announced by the selling shareholders in July 2020. Excluding the impact of this conversion (currently ongoing), | 46 |
Global Blue has 167.8M total Ordinary Shares and 23.7M total Series A Preferred Shares. (2) Share price as at closing on August 31, 2020; (3) Series A Preferred Shares presented at par value. |
Non-IFRS adjusted income statement
FY ended in March, €M | FY 2017/18A | FY 2018/19A | FY 2019/20A |
Total Revenue | 421.4 | 413.0 | 420.4 |
Adjusted operating expenses | (250.4) | (239.4) | (249.7) |
Adjusted EBITDA | 171.0 | 173.5 | 170.7 |
Other depreciation and amortization | (11.9) | (30.5) | (39.1) |
Adjusted EBIT | 159.1 | 143.0 | 131.6 |
Net finance cost | (32.1) | (28.7) | (31.8) |
Adjusted profit before tax | 127.0 | 114.3 | 99.8 |
Adjusted tax expenses | (28.9) | (26.3) | (22.6) |
Adjusted net income for the period | 98.1 | 88.0 | 77.2 |
Adjusted net income attributable to: | |||
Owners of the parent | 94.3 | 83.5 | 71.9 |
Non-controlling interests | 3.8 | 4.5 | 5.2 |
47
Source: Company Information.
Reported IFRS income statement
CONSOLIDATED INCOME STATEMENT
FY ended in March, €M | FY 2017/18A | FY 2018/19A | FY 2018/19A |
Total revenue | 421.4 | 413.0 | 420.4 |
Operating expenses | (361.6) | (354.4) | (379.2) |
Operating profit | 59.9 | 58.5 | 41.2 |
Finance income | 2.4 | 2.8 | 5.3 |
Finance costs | (34.5) | (31.5) | (37.2) |
Net finance costs | (32.1) | (28.7) | (31.8) |
Profit before tax | 27.7 | 29.8 | 9.4 |
Income tax expense | (8.3) | (23.0) | (7.7) |
Profit for the period | 19.5 | 6.9 | 1.7 |
Profit attributable to: | |||
Owners of the parent | 15.7 | 2.4 | (3.5) |
Non-controlling interests | 3.8 | 4.5 | 5.2 |
48
Source: Company Information.
Balance sheet
CONSOLIDATED STATEMENT OF FINANCIAL POSITION
€M | 3/31/2019 | 3/31/2020 |
Property, plant and equipment | 56.2 | 51.4 |
Intangible assets | 695.6 | 631.0 |
Deferred income tax assets | 10.9 | 12.3 |
Investments in associates and joint ventures | 2.4 | 2.9 |
Other non-current receivables | 12.7 | 15.2 |
Non-current assets | 777.8 | 712.8 |
Trade receivables | 249.3 | 141.3 |
Other current receivables | 49.2 | 33.8 |
Derivative financial instruments | - | 0.7 |
Income tax receivables | 3.6 | 1.6 |
Prepaid expenses | 15.0 | 7.9 |
Cash and cash equivalents | 104.1 | 226.1 |
Current assets | 421.3 | 411.4 |
Assets | 1,199.2 | 1,124.2 |
€M | 3/31/2019 | 3/31/2020 |
Equity attributable to owners of the parent | 78.5 | 63.1 |
Non-controlling interests | 8.4 | 8.4 |
Total equity | 87.0 | 71.5 |
Loans and borrowings | 622.4 | 624.6 |
Other long-term liabilities | 39.2 | 34.6 |
Deferred income tax liabilities | 49.4 | 34.6 |
Post-employment benefits | 5.1 | 8.0 |
Provisions for other liabilities and charges | 1.7 | 2.2 |
Non-current liabilities | 717.8 | 704.0 |
Trade payables | 263.7 | 237.3 |
Other current liabilities | 61.0 | 46.3 |
Accrued liabilities | 40.0 | 41.8 |
Current income tax liabilities | 29.8 | 23.2 |
Current liabilities | 394.4 | 348.7 |
Total equity and liabilities | 1,199.2 | 1,124.2 |
49
Source: Company Information.
Reconciliations (1/4)
ADJUSTED EBITDA RECONCILIATION
FY ended in March, €M | FY 2017/18A | FY 2018/19A | FY 2019/20A |
Profit for the period | 19.5 | 6.9 | 1.7 |
Net finance cost | 32.1 | 28.7 | 31.8 |
Income tax expense | 8.3 | 23.0 | 7.7 |
Depreciation and amortization(1) | 86.7 | 105.1 | 113.6 |
Exceptional items(2) | 24.4 | 9.9 | 16.0 |
Adjusted EBITDA | 171.0 | 173.5 | 170.7 |
Other depreciation and amortization | (11.9) | (30.5) | (39.1) |
Adjusted EBIT | 159.1 | 143.0 | 131.6 |
ADJUSTED OPERATING EXPENSES | |||
FY ended in March, €M | FY 2017/18A | FY 2018/19A | FY 2019/20A |
Operating expenses | (361.6) | (354.4) | (379.2) |
Exceptional items(2) | 24.4 | 9.9 | 16.0 |
Amortization of intangible assets acquired through business combinations | 74.8 | 74.6 | 74.5 |
Other depreciation and amortization | 11.9 | 30.5 | 39.1 |
Adjusted operating expenses | (250.4) | (239.4) | (249.7) |
Source: Company Information. | 50 |
Note: (1) Depreciation and amortization consist of (i) amortization of intangible assets acquired through business combinations and (ii) other depreciation and amortization. (2) Exceptional items consist of items which Global Blue does not consider indicative of its ongoing |
operating performance, not directly related to ordinary business operations and which are not included in the assessment of management performance.
Reconciliations (2/4)
ADJUSTED PROFIT BEFORE TAX and ADJUSTED NET INCOME
FY ended in March, €M | FY 2017/18A | FY 2018/19A | FY 2019/20A |
Profit before tax | 27.7 | 29.8 | 9.4 |
Exceptional Items(1) | 24.4 | 9.9 | 16.0 |
Amortization of intangible assets acquired through business combinations | 74.8 | 74.6 | 74.5 |
Adjusted profit before tax | 127.0 | 114.3 | 99.8 |
FY ended in March, €M | FY 2017/18A | FY 2018/19A | FY 2019/20A |
Profit attributable to owners of the parent | 15.7 | 2.4 | (3.5) |
Exceptional items(1) | 24.4 | 9.9 | 16.0 |
Amortization of intangible assets acquired through business combinations | 74.8 | 74.6 | 74.5 |
Tax effect of adjustments(2) | (20.6) | (3.4) | (14.9) |
Adjusted net income (Group Share) | 94.3 | 83.5 | 71.9 |
UNLEVERED NET INCOME
FY ended in March, €M | FY 2017/18A | FY 2018/19A | FY 2019/20A |
Operating profit | 59.9 | 58.5 | 41.2 |
Exceptional Items(1) | 24.4 | 9.9 | 16.0 |
Amortization of intangible assets acquired through business combinations | 74.8 | 74.6 | 74.5 |
Adjusted EBIT | 159.1 | 143.0 | 131.6 |
Unlevered tax(3) | (36.1) | (32.9) | (29.9) |
Unlevered adjusted net income | 122.9 | 110.2 | 101.7 |
Source: Company Information.
Note: (1) Exceptional items consist of items which Global Blue does not consider indicative of its ongoing operating performance, not directly related to ordinary business operations and which are not included in the assessment of management performance. (2) The exclusion
of exceptional items and amortization of intangible assets acquired through business combinations mechanically implies an increased tax payment. There are certain exceptional income tax expenses, which are not related to the financial year and, as such are excluded.51
(3) Based on Effective Tax Rate calculated as Adjusted Income Tax divided Adjusted PBT.
Reconciliations (3/4)
ADJUSTED INCOME TAX EXPENSE
FY ended in March, €M | FY 2017/18A | FY 2018/19A | FY 2019/20A | |
Income tax expense | (8.3) | (23.0) | (7.7) | |
Income tax expenses related to amortization of intangible assets acquired through | (15.1) | (15.1) | (15.1) | |
business combinations | ||||
Tax impact of exceptional items | (8.3) | (2.8) | (1.2) | |
Exceptional income tax expenses(1) | 2.7 | 14.5 | 1.3 | |
Tax effect of adjustments | (20.6) | (3.4) | (14.9) | |
Adjusted tax expenses | (28.9) | (26.3) | (22.6) | |
CASH FLOW SUMMARY | ||||
FY ended in March, €M | FY 2017/18A | FY 2018/19A | FY 2019/20A | |
Adjusted EBITDA | 171.0 | 173.5 | 170.7 | |
Capital expenditure(2) | (26.6) | (33.4) | (37.7) | |
Adjusted EBITDA - capital expenditure | 144.4 | 140.1 | 133.0 | |
Cash Flow Conversion Rate (%) | 84.5% | 80.8% | 77.9% | |
Interest paid | (26.8) | (24.5) | (24.6) | |
Income taxes paid | (24.7) | (28.3) | (28.1) | |
Principal elements of lease payments | - | (14.2) | (15.3) | |
Dividends paid to non-controlling interests | (3.5) | (3.9) | (4.8) | |
Free Cash Flow to Equity (Group Share) | 89.4 | 69.2 | 60.3 |
Source: Company Information. | 52 |
Note: (1) Exceptional income tax expenses relate mainly to the tax audit of Global Blue's Italian Subsidiary. (2) Capital expenditure is defined as purchase of tangible and intangible assets. |
Reconciliations (4/4)
LEVERAGE RATIO
FY ended in March, €M | FY 2017/18A | FY 2018/19A | FY 2019/20A |
Principal value of non-current loans and borrowings | 630.0 | 630.0 | 630.0 |
Current lease liabilities | - | 13.7 | 14.0 |
Non-current lease liabilities | - | 32.4 | 27.8 |
Cash and cash equivalents | (50.7) | (104.1) | (226.1) |
Adjusted net debt | 579.3 | 572.0 | 445.6 |
Adjusted EBITDA (on a rolling 12-month basis) | 171.0 | 173.5 | 170.7 |
Leverage ratio | 3.4x | 3.3x | 2.6x |
NET DEBT
FY ended in March, €M | FY 2017/18A | FY 2018/19A | FY 2019/20A |
Adjusted net debt | 579.3 | 572.0 | 445.6 |
Capitalized financing costs | (17.2) | (13.4) | (9.7) |
IFRS 9 loan modification impact | - | 5.8 | 4.3 |
Other bank overdraft(1) | 3.0 | 2.1 | 1.1 |
Net debt | 565.1 | 566.6 | 441.3 |
Source: Company Information. | 53 |
Note: (1) Local credit facilities are available in certain jurisdictions. None of these local overdraft facilities were committed in nature. |
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Global Blue Group Holding Ltd. published this content on 26 October 2020 and is solely responsible for the information contained therein. Distributed by Public, unedited and unaltered, on 04 November 2020 09:44:45 UTC