UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 6-K
REPORT OF FOREIGN PRIVATE ISSUER PURSUANT TO RULE 13a-16 OR 15d-16 UNDER THE
SECURITIES EXCHANGE ACT OF 1934
For the Month of May 2024
Commission file number: 001-41836
Birkenstock Holding plc
(Translation of registrant's name into English)
1-2 Berkeley Square
London W1J 6EA
United Kingdom
(Address of principal executive office)
Indicate by check mark whether the registrant files or will file annual reports under cover of Form 20-F or Form 40-F.
Form 20-F☒ Form 40-F☐
TABLE OF CONTENTS | |
Pag | |
e | |
1 | |
1 | |
Unaudited Interim Condensed Consolidated Statements of Financial Position | 2 |
Unaudited Interim Condensed Consolidated Statements of Comprehensive Income | 3 |
Unaudited Interim Condensed Consolidated Statements of Changes in | 4 |
Unaudited Interim Condensed Consolidated Statements of Cash Flows | 5 |
Notes to the Unaudited Interim Condensed Consolidated Financial Statements | 6 |
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION | 17 |
AND RESULTS OF OPERATIONS | |
PART II - OTHER INFORMATION | 35 |
ITEM 1. LEGAL PROCEEDINGS | 35 |
ITEM 1A. RISK FACTORS | 35 |
ITEM 2. INCORPORATION BY REFERENCE | 35 |
SIGNATURES | 36 |
PART I FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS
Birkenstock Holding plc
Unaudited Interim Condensed Consolidated Financial Statements
as of March 31, 2024 and for the three and six months ended March 31, 2024 and 2023
1
Unaudited Interim Condensed Consolidated Statements of Financial Position
(In thousands of Euros) | Notes | March 31, 2024 | September 30, 2023 | |||
Assets | ||||||
Non-current assets | ||||||
Goodwill | 1,576,895 | 1,593,917 | ||||
Intangible assets (other than goodwill) | 1,676,609 | 1,705,736 | ||||
Property, plant and equipment | 6 | 303,871 | 286,053 | |||
Right-of-use assets | 7 | 164,121 | 122,984 | |||
Other assets | 50,621 | 38,234 | ||||
Total non-current assets | 3,772,117 | 3,746,924 | ||||
Current assets | ||||||
Inventories | 8 | 650,963 | 595,092 | |||
Right to return assets | 1,395 | 1,132 | ||||
Trade and other receivables | 200,206 | 91,764 | ||||
Current tax assets | 9,734 | 10,361 | ||||
Other current assets | 37,650 | 37,789 | ||||
Cash and cash equivalents | 175,728 | 344,408 | ||||
Total current assets | 1,075,676 | 1,080,546 | ||||
Total assets | 4,847,793 | 4,827,470 | ||||
Shareholders' equity and liabilities | ||||||
Shareholders' equity | ||||||
Ordinary shares | 9 | - | 182,721 | |||
Share premium | 9 | 2,524,149 | 1,894,384 | |||
Treasury shares | 9 | (343,645 ) | - | |||
Other capital reserve | 9 | 69,092 | 65,394 | |||
Retained earnings | 9 | 290,473 | 225,976 | |||
Accumulated other comprehensive income | 9 | 14,033 | 32,114 | |||
Total shareholders' equity | 2,554,102 | 2,400,589 | ||||
Non-current liabilities | ||||||
Loans and borrowings | 11 | 1,298,763 | 1,815,695 | |||
Tax receivable agreement liability | 12 | 345,302 | - | |||
Lease liabilities | 139,203 | 103,049 | ||||
Provisions for employee benefits | 2,923 | 2,716 | ||||
Other provisions | 2,088 | 2,074 | ||||
Deferred tax liabilities | 112,252 | 109,794 | ||||
Deferred income | 13 | 13,477 | 10,634 | |||
Other liabilities | 4,927 | 4,338 | ||||
Total non-current liabilities | 1,918,935 | 2,048,300 | ||||
Current liabilities | ||||||
Loans and borrowings | 11 | 29,105 | 37,343 | |||
Lease liabilities | 34,136 | 27,010 | ||||
Trade and other payables | 121,323 | 123,012 | ||||
Accrued liabilities | 30,489 | 38,645 | ||||
Other financial liabilities | 4,542 | 7,085 | ||||
Other provisions | 21,320 | 36,495 | ||||
Contract liabilities | 9,878 | 7,018 | ||||
Current tax liabilities | 108,627 | 83,332 | ||||
Deferred income | 13 | - | 2,680 | |||
Other current liabilities | 15,336 | 15,961 | ||||
Total current liabilities | 374,756 | 378,581 | ||||
Total liabilities | 2,293,691 | 2,426,881 | ||||
Total shareholders' equity and liabilities | 4,847,793 | 4,827,470 | ||||
2
Unaudited Interim Condensed Consolidated Statements of Comprehensive Income (Loss)
Three months ended | Six months ended | ||||||||||
March 31, | March 31, | ||||||||||
(In thousands of Euros, except share and per share | Notes | 2024 | 2023 | 2024 | 2023 | ||||||
information) | |||||||||||
Revenue | 14 | 481,244 | 395,683 | 784,168 | 644,173 | ||||||
Cost of sales | 15 | (210,084 ) | (160,233 ) | (328,140 ) | (255,403 ) | ||||||
Gross profit | 271,160 | 235,450 | 456,028 | 388,770 | |||||||
Operating expenses | |||||||||||
Selling and distribution expenses | 15 | (113,155 ) | (86,748 ) | (216,639 ) | (172,867 ) | ||||||
General administration expenses | 15 | (19,986 ) | (32,391 ) | (54,377 ) | (54,524 ) | ||||||
Foreign exchange gain (loss) | (5,483 ) | (16,924 ) | (17,138 ) | (47,754 ) | |||||||
Other income (expenses), net | (25 ) | 3,945 | 206 | 3,945 | |||||||
Profit from operations | 132,511 | 103,332 | 168,080 | 117,570 | |||||||
Finance cost, net | (27,389 ) | (29,566 ) | (63,439 ) | (54,664 ) | |||||||
Profit before tax | 105,122 | 73,766 | 104,641 | 62,906 | |||||||
Income tax benefit (expense) | 16 | (33,470 ) | (24,373 ) | (40,144 ) | (22,699 ) | ||||||
Net profit | 71,652 | 49,393 | 64,497 | 40,207 | |||||||
Other comprehensive income (loss) | |||||||||||
Items that may be reclassified to profit (loss) | |||||||||||
in subsequent periods (net of tax): | |||||||||||
Cumulative translation adjustment gain | |||||||||||
(loss) | 20,015 | (17,963 ) | (17,601 ) | (99,667 ) | |||||||
Net position of fair value changes of the | 481 | - | (480 ) | - | |||||||
cash flow hedge | |||||||||||
Other comprehensive income (loss) | 20,496 | (17,963 ) | (18,081 ) | (99,667 ) | |||||||
Total comprehensive income (loss) | 92,148 | 31,430 | 46,416 | (59,460 | ) | ||||||
Earnings per share | |||||||||||
Basic | 17 | 0.38 | 0.27 | 0.34 | 0.22 | ||||||
Diluted | 17 | 0.38 | 0.27 | 0.34 | 0.22 |
3
Unaudited Interim Condensed Consolidated Statements of Changes in Shareholders' Equity (Deficit)
Ordinary shares | Accumulated other | |||||||||||||||||||
comprehensive income (loss) | ||||||||||||||||||||
Number of | Share | Treasury | Other Capital | Cumulative | Cash flow | Shareholders' | ||||||||||||||
(In thousands of Euros, except share and per share | Notes | Amount | Retained Earnings | translation | hedge | |||||||||||||||
information) | shares | Premium | Shares | Reserve | adjustment | reserve | equity | |||||||||||||
Balance at September 30, 2022 | 182,721,369 | 182,721 | 1,894,38 | - | - | 150,954 | 129,759 | - | 2,357,819 | |||||||||||
4 | ||||||||||||||||||||
Net profit | - | - | - | - | - | 40,207 | - | - | 40,207 | |||||||||||
Other comprehensive income (loss) | - | - | - | - | - | - | (99,667 ) | - | (99,667 ) | |||||||||||
Total comprehensive income (loss) | - | - | - | - | - | 40,207 | (99,667 ) | - | (59,460 ) | |||||||||||
Equity-settledshare-based compensation expense | 3,268 | 3,268 | ||||||||||||||||||
182,721,369 | 182,721 | 1,894,38 | 3,268 | 191,161 | 30,092 | 2,301,627 | ||||||||||||||
Balance at March 31, 2023 | 4 | - | - | |||||||||||||||||
Balance at September 30, 2023 | 182,721,369 | 182,721 | 1,894,38 | - | 65,394 | 225,976 | 32,459 | (345 ) | 2,400,589 | |||||||||||
4 | ||||||||||||||||||||
Net profit | - | - | - | - | - | 64,497 | - | - | 64,497 | |||||||||||
Other comprehensive income (loss) | - | - | - | - | - | - | (17,601 ) | (480 ) | (18,081 ) | |||||||||||
Total comprehensive income (loss) | - | - | - | - | - | 64,497 | (17,601 ) | (480 ) | 46,416 | |||||||||||
Equity-settledshare-based compensation expense | 18 | - | - | - | - | 3,698 | - | - | - | 3,698 | ||||||||||
Conversion to no par value ordinary shares | 9 | - | (182,721 ) | 182,721 | - | - | - | - | - | - | ||||||||||
Shares re-purchased in consideration of TRA | 12 | (5,648,465 ) | - | - | (343,645 ) | - | - | - | - | (343,645 ) | ||||||||||
Issuance of share capital, net (of total transaction costs | 10,752,688 | - | 447,044 | - | - | - | - | - | 447,044 | |||||||||||
€22.7 million) | 9 | |||||||||||||||||||
187,825,592 | 2,524,14 | (343,645 ) | 69,092 | 290,473 | 14,858 | (825 ) | 2,554,102 | |||||||||||||
Balance at March 31, 2024 | - | 9 | ||||||||||||||||||
4
Unaudited Interim Condensed Consolidated Statements of Cash Flows
Successor | ||||||
Six months ended March 31, | ||||||
(In thousands of Euros) | 2024 | 2023 | ||||
Cash flows from operating activities | ||||||
Net profit | 64,497 | 40,207 | ||||
Adjustments to reconcile net profit (loss) to net cash flows from operating | ||||||
activities: | ||||||
Depreciation and amortization | 47,384 | 40,574 | ||||
Change in expected credit loss | (128 ) | 1,056 | ||||
Finance cost, net | 63,439 | 54,664 | ||||
Net exchange differences | 17,138 | 48,255 | ||||
Non-cash operating items | 2,394 | 3,380 | ||||
Income tax expense | 40,144 | 22,699 | ||||
Income tax paid | (10,153 ) | 922 | ||||
MIP personal income tax paid | (11,426 ) | - | ||||
Changes in working capital: | ||||||
- Inventories | (65,902 ) | (89,079 ) | ||||
- Right to return assets | (278 ) | 1,162 | ||||
- Trade and other receivables | (109,140 ) | (111,436 ) | ||||
- Trade and other payables | 21 | (3,649 ) | ||||
- Accrued liabilities | (7,809 ) | 8,137 | ||||
- Other current financial liabilities | 863 | (8,566 ) | ||||
- Other current provision | (14,982 ) | (6,934 ) | ||||
- Contract liabilities | 2,874 | 2,096 | ||||
- Prepayments | (8,231 ) | - | ||||
- Other | (6,094 ) | 592 | ||||
Net cash flows provided by operating activities | 4,611 | 4,080 | ||||
Cash flows from investing activities | ||||||
Interest received | 2,164 | - | ||||
Purchases of property, plant and equipment | (34,931 ) | (50,297 ) | ||||
Purchases of intangible assets | (2,303 ) | (728 ) | ||||
Proceeds from sale of assets | - | 556 | ||||
Receipt of government grant | 8,739 | - | ||||
Net cash flows (used in) investing activities | (26,331 ) | (50,469 ) | ||||
Cash flows from financing activities | ||||||
IPO Proceeds, net (of underwriting commission fees €19.8 million) | 449,214 | - | ||||
Repayment of loans and borrowings | (525,278 ) | (3,844 ) | ||||
Interest paid | (49,453 ) | (58,632 ) | ||||
Payments of lease liabilities | (16,656 ) | (13,664 ) | ||||
Interest portion of lease liabilities | (3,928 ) | (2,364 ) | ||||
Net cash flows (used in) financing activities | (146,101 | ) | (78,504 | ) | ||
Net increase (decrease) in cash and cash equivalents | ||||||
(167,821 | ) | (124,893 | ) | |||
Cash and cash equivalents at beginning of period | 344,408 | 307,078 | ||||
Net foreign exchange difference | (859 ) | (10,522 ) | ||||
Cash and cash equivalents at end of period | 175,728 | 171,663 |
5
NOTES TO THE UNAUDITED INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
1. GENERAL INFORMATION
Organization and principal activities
Birkenstock Holding plc (together with its subsidiaries referred to herein as the "Company" or "Birkenstock") was formed under the name of BK LC Lux Finco 2 S.à r.l. on February 19, 2021, as a limited liability company organized under Luxembourg law, with its business address at 40 Avenue Monterey, Luxembourg. On October 4, 2023, the Company converted to a public limited company organized under Jersey law and changed its name to Birkenstock Holding plc. The Company's current business address is 1-2 Berkeley Square, London W1J 6EA, United Kingdom. The Company is registered at the Jersey Financial Services Commission under number 148522.
The Company's controlling shareholder is BK LC Lux MidCo S.à r.l. ("MidCo") and the Company's ultimate controlling shareholder is LC9 Caledonia AIV GP, LLP ("L Catterton").
The Company manufactures and sells footbed-based products, including sandals and closed-toe silhouettes, and other products, such as skincare and accessories, for everyday leisure, and work. The Company operates in four operating segments based on its regional hubs: (1) Americas, (2) Europe, (3) Asia, the South Pacific, and Australia ("ASPA"), and (4) the Middle East, Africa, and India ("MEAI") (see Note 5 - Segment information for further details). All segments have the same operations. The Company sells its products through two main channels: business-to- business ("B2B") (comprising sales made to established third-party store networks), and direct-to-consumer ("DTC") (comprising sales made on globally owned online stores via the Birkenstock.com domain and sales made in Birkenstock retail stores).
Seasonality
Revenue of our products are affected by a seasonal pattern that is driven in large part by the weather given the nature of our product mix. The seasonal nature of our business is similar across geographies and sales channels with B2B seeing an increase in revenue in the spring months, while revenue in the DTC channel increasing in the summer. Between October and March, we manufacture our products for the B2B channel, and during the first few months of the calendar year, we rely on our built-up inventory for our revenue to B2B partners. Starting in April and during the warmer months of the year, demand for our products from the DTC channel increases. While these consumer buying patterns lead to a natural seasonality in revenue, unseasonable weather could significantly affect revenue and profitability. Our geographical breadth, customer diversity and our strategic focus on expanding certain product categories and entering new territory helps to mitigate part of the effect of seasonality on results of operations.
2. BASIS OF PRESENTATION
Basis of preparation and consolidation
These interim condensed consolidated financial statements were authorized for issuance by the Company's Audit Committee on May 30, 2024.
These interim condensed consolidated financial statements as of March 31, 2024 and for the three and six months ended March 31, 2024 and 2023 have been prepared in accordance with International Accounting Standard ("IAS") 34 "Interim Financial Reporting", as issued by the International Accounting Standard Board ("IASB"). These interim condensed consolidated financial statements should be read in conjunction with the annual consolidated financial statements for the fiscal year ended September 30, 2023, which have been prepared in accordance with International Financial Reporting Standards ("IFRS") as issued by the IASB, taking into account the recommendations of the International Financial Reporting Standards Interpretations Committee ("IFRIC").
These interim condensed consolidated financial statements have been prepared on a historical cost basis except for derivative financial instruments and the initial recognition of assets acquired and liabilities assumed in a business combination which are recorded at fair value.
The interim condensed consolidated financial statements comprise the financial statements of Birkenstock Holding plc and its subsidiaries. All intercompany transactions and balances have been eliminated.
All amounts have been rounded to the nearest thousand, unless otherwise indicated.
6
The fiscal year of the Company ends on September 30.
The companies consolidated in these interim condensed consolidated financial statements are disclosed in the notes to the annual consolidated financial statements for the fiscal year ended September 30, 2023.
Functional and presentation currency
The functional currency of each of the Company's subsidiaries is the currency of the primary economic environment in which each entity operates. The presentation currency of the Company is Euros.
3. SIGNIFICANT ACCOUNTING POLICIES
The accounting policies applied in these interim condensed consolidated financial statements are predominantly the same as those applied by Birkenstock in its consolidated financial statements for the fiscal year ended September 30, 2023.
The Company has not early adopted any standard, interpretation or amendment that has been issued but is not yet effective.
Change in accounting estimate
The Company distributes its footwear produced predominantly in Germany and Portugal to its own (distribution) legal entities around the world with an intercompany margin, which is eliminated on consolidation. Commencing with the fiscal year ending September 30, 2024, the Company has refined its calculation of this intercompany profit elimination ("ICP") to more precisely reflect the turnover of inventory. This more accurate computation also has a foreign currency impact on the Cost of Sales converted to the reporting currency Euro. If the prior ICP model computation had still been applied in this fiscal year, the Company would have recorded an incremental expense (Cost of Sales) of €10.6 million for the six months ended March 31, 2024. For the three months ended March 31, 2024, €2.9 million less Cost of Sales would have been recorded under the previous method.
New and amended standards and interpretations adopted by the Company
The following amended standards became effective for the Company's fiscal year beginning on October 1, 2023, but did not have a material impact on the unaudited interim condensed consolidated financial statements of the Company:
- IFRS 17 - Insurance Contracts (effective for annual periods beginning on or after January 1, 2023).
- Amendments to IFRS 17 - Insurance Contracts (effective for annual periods beginning on or after January 1, 2023).
- IFRS 17 and IFRS 9 - Initial application of IFRS 17 and IFRS 9 - Comparative Information (effective for annual periods beginning on or after January 1, 2023).
- Amendments to IAS 8 - Definition of Accounting Estimates (effective for annual periods beginning on or after January 1, 2023).
- Amendments to IAS 1 and IFRS Practice Statement 2 - Disclosure of Accounting Policies (effective for annual periods beginning on or after January 1, 2023).
- Amendments to IAS 12 - Deferred Tax related to Assets and Liabilities arising from a Single Transaction (effective for annual periods beginning on or after January 1, 2023).
- Amendments to IAS 12 - International Tax Reform - Pillar 2 Model Rules (effective for annual periods beginning on or after January 1, 2023, however a temporary exception from accounting for deferred taxes arising from the implementation of the OECD's Pillar Two model rules is to be applied retroactively). The mandatory temporary exemption to account for deferred taxes has been applied.
New and amended standards and interpretations issued but not yet effective
The following standard amendments will be effective for the Company's fiscal year beginning October 1, 2024, or thereafter, and are not expected to have a material impact on the unaudited interim condensed consolidated financial statements of the Company:
- Amendments to IAS 1 - Non-currentliabilities with Covenants (effective for annual periods beginning on or after January 1, 2024).
- Amendments to IAS 1 - Classification of Liabilities as current or non-current(effective for annual periods beginning on or after January 1, 2024).
7
- Amendments to IFRS 16 - Lease liability in a sale and lease back (effective for annual periods beginning on or after January 1, 2024).
- Amendments to IAS 7 and IFRS 7 - Supplier Finance Arrangements (effective for annual periods beginning on or after January 1, 2024).
- Amendments to IAS 21 - Lack of Exchangeability (effective for annual periods beginning on or after January 1, 2025).
- Amendments to IFRS 10 and IAS 28 - Sale or contribution of assets between an investor and its associate or joint venture (available for optional adoption/ effective date deferred indefinitely).
IFRS 18 - Presentation and Disclosure in Financial Statements will be effective for periods beginning on or after January 1, 2027 and the Company is currently assessing the potential impact of the new standard.
4. SIGNIFICANT ACCOUNTING ESTIMATES, ASSUMPTIONS AND JUDGMENTS
The preparation of Birkenstock's consolidated financial statements in accordance with IFRS requires management to make estimates and judgments in applying the Company's accounting policies that affect the reported amounts and disclosures made in the interim condensed consolidated financial statements and accompanying notes. Uncertainty about these assumptions and estimates could result in outcomes that require a material adjustment to the carrying amount of assets or liabilities affected in future periods. The estimates and underlying assumptions are subject to continuous review.
During the three and six months ended March 31, 2024, the Company made significant estimates and assumptions to determine the Company's contractual obligations and its fair value under the Tax Receivable Agreement entered into, between the Company and MidCo, on October 10, 2023 (the "Tax Receivable Agreement" or "TRA"). These significant estimates and assumptions include forecasting taxable income and estimating the timing of when certain taxable benefits will be realized in future years. For details on the TRA please refer to Note 12 - Tax Receivable Agreement.
In preparing the interim condensed consolidated financial statements, no significant changes in accounting estimates, assumptions and judgments have occurred compared to the significant accounting judgments, estimates and assumptions discussed in the consolidated financial statements as of and for the fiscal year ended September 30, 2023, except for the change in estimate described above.
5. SEGMENT INFORMATION
The Company's operating segments are reported in a manner consistent with the internal reporting provided to and regularly reviewed by the chief operating decision maker ("CODM"), the Chief Executive Officer ("CEO"), and are aligned to the four geographical hubs that the Company operates in: Americas, Europe, ASPA, and MEAI. Due to the materiality, ASPA and MEAI are aggregated into one reportable segment APMA ("Asia Pacific, Middle East, Africa"). As such the Company has three reportable segments - Americas, Europe and APMA. Additionally, the Company has a Corporate / Other revenue and expenses, which primarily consists of non-core activities from the cosmetics and sleeping systems businesses, as well as other administrative costs that are not charged to the operating segments and realized foreign exchange gains and losses. The CODM uses the measure of adjusted EBITDA to assess operating segments' performance to make decisions regarding the allocation of resources.
The adjustments to EBITDA relate to realized and unrealized foreign exchange gain / (loss), initial public offering ("IPO")-related costs, share-based compensation and other adjustments relating to non-recurring items.
As of March 31, 2023, the Company changed its internal reporting to the CODM to report results prepared in accordance with IFRS.
Assets and liabilities are neither reported nor reviewed by the CODM at the operating segment level.
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Birkenstock Holding plc published this content on 30 May 2024 and is solely responsible for the information contained therein. Distributed by Public, unedited and unaltered, on 30 May 2024 10:50:09 UTC.