Global Blue Group Holding AG (NYSE:GB) Q2 2024 Earnings Call Transcript

But we see there that the level of international shopper recovery have now reached the level of 2019 with even an increase of 110% versus 2019 in terms of number of shoppers. If we look to the detail per nationality, and they also excluding China as an origin country, you see that we see an acceleration in October at 189% driven by citizen from Hong Kong, Taiwan, but also followed by Japan and Korea, so Northeast Asia with two very strong set of results well above 250% for those two nationality. And if we look to mainland China, who used to represent 56% of the sales in so in 2019, we see a slight increase in October at 109% recovery versus 105% in Q2. They also, if we go a little bit more in detail, we see that the level of recovery in terms of number of shopper is 47%, whereby where the increase in average spent is 132%, translated into this 109% in terms of tax free spent recovery.

So in summary, if we exclude mainland China and Russia, we can see that the recovery in continental Europe is well above 150% and almost at 190% now in a pack. And obviously, we still have China, which needs to continue to recover, which has started in a pack where we reach 109%, but still around 50% in October. Why this is important, this recovery of the Chinese, obviously, because this drive further improvement of profitability for Global Blue. You know this chart, just to remind you a few things. So as mentioned by Roxane, our quarterly annualized EBITDA is now after Q2, reaching 142%, EUR42 million, which implied recovery in terms of China revenue of 40%. And this is to be compared to our top profitability on the calendar year 2019, where we reach EUR187 million of EBITDA.

And on the right, so on the green part of this chart, you can see the simulation of the Chinese recovery. And if I take, for example, 125% recovery for the Chinese in the coming quarters, based on the more capacity of airline and also this fading of the roadblocks that I was mentioning in Europe with travel group and visa, you can see that the group could reach more than EUR200 million EBITDA, which I remind you is our guidance for ’24, ’25 fiscal year, so over 200 million. So this would imply 105% recovery of the Chinese revenue. So let’s turn now for a few sites on the recent achievement. Few things there to mention. First on the commercial front for tax-free shopping, we are continuing to improve our market share. You see on the right couple of very significant names, which have gained in H1 ’23, ’24, Bottega Veneta, Audemars Piguet, Lacoste, but also other brands.

And worse to mention that this strong gain, but also a very strong growth retention rate of 99.4% and up to a net retention for the last four years, including this H1 set of result of 103%. So a gain versus loss, which is positive by 3% per year. So reinforcement of market share in tax-free shopping, but also in tax-free shopping, the continuing level of increase of digitalization, which you know is very beneficial in terms of increased penetration, which increase at the end the volume, but also in terms of cost, as you know, more digitalization in terms of refund out of the airport means also reduction of the cost. You can see here that the progress is in all front issuing. We are almost now at 100% of digital issuing validation. H1 translate more or less the same level than last year.

We have not shift any new country in terms of export digital validation, but few are on the pipeline. In terms of consumer engagement through our mobile customer care, you see that we continue to increase the coverage at 66% versus 62% last year, and digital refund out of the airport, you see also there an improvement in H1. So continuous improvement in terms of digitalization. I will come back talking about the long-term target in a couple of minutes, and this is one of the key elements of our volume growth. Turning now to AVPS, so added value payment solution. There are also some very nice gain in terms of FX solution during H1, Poste Italiana for the ATM DCC management, but also PPIH in Japan, Scotiabank in Canada, BCC Pay in Italy, and World Pay in the UK.

There also to mention a very strong growth retention rate for the last three years in line with H1 at 98.2%, which translate into a net retention rate. So net gain and loss of 104.7%. Last but not least to mention and to report the successful launch of the Global Blue Hospitality and Retail Gateway. In the last quarters, more than about 280 hotel, which has been rolled out with this new gateway. And during the last quarter, we have been able to sign seven new acquire, adopting our gateway solution in terms of technology with names like Nexi, but also Monderebank, but also ANZ and NETS. And for which in the coming months, we will roll out this technology with new hotel to be signed. It’s already the case for Nexi and for GCC and Mondere. It will be the case for Vesca, Maybank, NETS, and ANZ in the coming months.