Global Business Travel Group, Inc. · NYSE:GBTG
Global Business Travel — Q4 2023 Earnings Presentation
29 slides from Global Business Travel's earnings presentation, Mar 5, 2024
Slide 1: Amex GBT Q4 & FY 2023 Earnings Report
Amex GBT Q4 & FY 2023 Earnings Report March 5, 2024 GBT Travel Services UK Limited (GBT UK) and its authorized sublicensees (including Ovation Travel Group and Egencia) use certain trademarks and service marks of American Express Company or its subsidiaries (American Express) in the “American Expres
Slide 2: Legal Disclaimer: Forward-Looking Statements
Legal Disclaimer Forward-Looking Statements This communication contains statements that are forward-looking and as such are not historical facts. This includes, without limitation, statements regarding our financial position, business strategy, and the plans and objectives of management for future o
Slide 3: Legal Disclaimer: Industry and Market Data
Legal Disclaimer Industry and Market Data This presentation also contains information, estimates and other statistical data derived from third party sources, including research, surveys or studies, some of which are preliminary drafts, conducted by third parties, information provided by customers an
Slide 4: Today's Presenters
Today’s Presenters PAUL ABBOTT KAREN WILLIAMS Chief Executive Officer Chief Financial Officer This document contains unpublished, confidential, and proprietary information of American Express Global Business Travel (Amex GBT). No disclosure or use of any portion of these materials may be made withou
Slide 5: Amex GBT Delivered Strong Performance in Q4 & FY 2023
Amex GBT Delivered Strong Performance in Q4 & FY 2023 Q4 & FY 2023 Highlights Proof Points ✓ $549M revenue and $80M Adj. EBITDA in Q4 2023, up 83% or $37M YOY Outstanding financial performance ✓ FY 2023 results above initial guidance with revenue up 24% and Adj. EBITDA +269% to $380M ✓ Record Total
Slide 6: Continued to Execute Strategy and Deliver Outstanding Financial Results
Continued to Execute Strategy and Deliver Outstanding Financial Results $28B Transactions TTV $23B +19% +23% FY 2022 FY 2023 FY 2022 FY 2023 Revenue $2,290M Adjusted EBITDA $380M +24% +269% $1,851M $103M FY 2022 FY 2023 FY 2022 FY 2023 This document contains unpublished, confidential, and proprietar
Slide 7: Strong Transaction Growth in FY 2023 (Detailed Trends)
Strong Transaction Growth in FY 2023 (Detailed Trends) Air Route Customer Set 21% 20% 17% 13% GMN SME Domestic International Booking Type Region of Sale 20% 29% 16% 20% 16% Air Hotel Americas EMEA APAC “SME” represents Small & Medium Enterprises; “GMN” represents Global & Multinational Enterprises T
Slide 8: Strong FY 2023 Revenue Growth Driven by New Wins & Industry Tailwinds
Strong FY 2023 Revenue Growth Driven by New Wins & Industry Tailwinds Amex GBT’s revenue growth compared favorably to major travel and business service peers in 2023 FY 2023 Revenue Growth by Subsector 24% 18% 18% 15% 14% 8% Average Average Average Average Average OTA GDS HOTEL AIRLINE BUSINESS SERV
Slide 9: Commercial Success in FY 2023 with Strong New Wins and Higher Retention
Commercial Success in FY 2023 with Strong New Wins, Particularly in SME, and Higher Customer Retention Rate Commercial Leadership Significant New Wins Technology Leadership $3.5B • 78% of transactions through digital channels in Q4 2023, +1pt vs. Q3 2023 Total New Wins Value • >60% of bookings now t
Slide 10: Financial Priorities Deliver Outstanding Financial Performance
Financial Priorities Deliver Outstanding Financial Performance, Through Revenue and Adj. EBITDA Growth 1 Focus on accelerating cash flow generation 2 Drive operating leverage and continued margin expansion 3 Invest to drive long-term, sustained growth This document contains unpublished, confidential
Slide 11: Strong Financial Results in Q4 & FY 2023
Strong Financial Results in Q4 & FY 2023 Q4 2023 FY 2023 ($M) YOY % YOY % Results Results Total Revenue $549 4% * $2,290 24% Revenue Yield1 8.7% (0.2ppt) 8.1% 0.0ppt Adjusted Operating Expenses $469 (3%) $1,910 9% Adjusted EBITDA $80 83% $380 269% Adjusted EBITDA Margin 15% 6ppt 17% 11ppt Net cash p
Slide 12: Significant Reduction in Net Debt and Leverage Ratio
Significant Reduction in Net Debt and Leverage Ratio • Reduction in leverage drove 75bps stepdown in term loan rate in Q4’23 and additional 75bps in Q1’24; total reduction of 150bp results in annual interest expense savings of ~$25M • 2-notch credit rating upgrade to B+ • Opportunity to refinance de
Slide 13: Positioned for Industry-Leading Returns in a Stable Growth Environment in 2024
Positioned for Industry-Leading Returns in a Stable Growth Environment in 2024 18% - 32% Adj. EBITDA Growth + Deployment of Accelerating Free Cash Flow Capital Deployment 2pts TSR from Accelerating capital Free Margin Expansion Cash Flow enables deployment organic and inorganic Strong operating mode
Slide 14: Business Travel Tailwinds to Continue in a Stable Growth Environment in 2024
Business Travel Tailwinds to Continue in a Stable Growth Environment in 2024 Top 100 customers expect travel spend to be up approximately 4%1 67% of our meetings & events survey respondents say meeting & events budgets are increasing2 GBTA Poll – 87% of buyers expect travel budgets to increase or ho
Slide 15: Expect Continued Strong Financial Performance in FY 2024
Expect Continued Strong Financial Performance in FY 2024 Full-Year YOY Growth 2024 Guidance Revenue $2.43B – $2.50B + 6% – 9% Adjusted EBITDA $450M – $500M + 18% – 32% Adjusted EBITDA Margin 18% – 20% ~ 150bps – 350bps Free Cash Flow > $100M See Supplemental Materials section for information on our
Slide 16: Our Capital Allocation Framework Focuses on Growth, Cash Generation & Reinvestment
Our Capital Allocation Framework Focuses on Growth, Cash Generation & Reinvestment to Drive Shareholder Returns 1 Accelerating cash generation 2 Continue to deleverage, lowering target range to 1.5 – 2.5x Net Debt / Adj. EBITDA 3 Invest in organic growth and strategic M&A This document contains unpu
Slide 17: Why Investors Should be Excited About Amex GBT in 2024+
Why Investors Should be Excited About Amex GBT in 2024+ Revenue outperformance as business travel stabilizes to at or above GDP growth and Amex GBT continues to gain share Operating leverage, focus on productivity and leveraging automation and AI to deliver 18% ‒ 32% Adj. EBITDA growth in 2024 and c
Slide 18: Q&A
Q&A PAUL KAREN ERIC ABBOTT WILLIAMS BOCK Chief Executive Chief Financial Chief Legal Officer, Officer Officer Corporate Secretary & Global Head of M&A This document contains unpublished, confidential, and proprietary information of American Express Global Business Travel (Amex GBT). No disclosure or
Slide 19: Supplemental Materials
Supplemental Materials This document contains unpublished, confidential, and proprietary information of American Express Global Business Travel (Amex GBT). No disclosure or use of any portion of these materials may be made without the express written consent of Amex GBT. © 2024 GBT Travel Services U
Slide 20: Q4 2023 Amex GBT Business Travel Growth
Q4 2023 Amex GBT Business Travel Growth Transactions TTV $6,298M +7% +6% $5,913M Q4'22 Q4'23 Q4'22 Q4'23 1. Total Transaction Value (“TTV”) refers to the sum of the total price paid by travelers for air, hotel, rail, car rental and cruise bookings, including taxes and other charges applied by suppli
Slide 21: FY 2024 Free Cash Flow Guidance Detail
FY 2024 Free Cash Flow Guidance Detail Guidance $450-500M ~$125M ~$60-90M 5-6% of revenue ~$25M ~$65M > $100M 1-2% of TTV growth 1 See Supplemental Materials section for information on our use of certain Non-GAAP Financial Metrics and related reconciliations. See our Q4 2023 earnings release for a d
Slide 22: TTV, Revenue and Adjusted EBITDA Seasonality by Quarter
TTV, Revenue and Adjusted EBITDA Seasonality by Quarter TTV By Quarter (% of Full Year) TTV ($M) 10,107 9,710 9,431 8,436 22% 26% 22% 7,422 7,349 7,123 25% 25% 6,298 29% 6,527 6,585 26% 26% 5,913 28% 27% 26% 3,943 17% Q1 Q2 Q3 Q4 2019 PF 2022A 2023A 2019 PF 2022A 2023A Q1 Q2 Q3 Q4 Revenue By Quarter
Slide 23: Glossary of Terms
Glossary of Terms B2B refers to business-to-business. Customer retention rate is calculated based on Total Transaction Value (TTV). GMN represents Global & Multinational Enterprises. LTM refers to the last twelve months. Revenue Yield is defined as Total Revenue divided by TTV. SME refers to clients
Slide 24: Non-GAAP Financial Measures
Non-GAAP Financial Measures We report our financial results in accordance with GAAP. Our non-GAAP financial measures are provided in addition to, and should not be considered as an alternative to, other performance or liquidity measures derived in accordance with GAAP. Non-GAAP financial measures ha
Slide 25: Non-GAAP Financial Measures, Continued
Non-GAAP Financial Measures, Continued EBITDA, Adjusted EBITDA, Adjusted EBITDA Margin and Adjusted Operating Expenses should not be considered as measures of liquidity or as measures determining discretionary cash available to us to reinvest in the growth of our business or as measures of cash that
Slide 26: Reconciliation of net loss to EBITDA and Adjusted EBITDA
Reconciliation of net loss to EBITDA and Adjusted EBITDA Three Months Ended Year Ended December 31, December 31, (in $ millions) 2023 2022 2023 2022 Net loss $ (46) $ (63) $ (136) $ (229) Interest income (1) — (1) — Interest expense 36 29 141 98 Benefit from income taxes 3 (22) (9) (61) Depreciation
Slide 27: Reconciliation of total operating expenses to Adjusted Operating Expenses
Reconciliation of total operating expenses to Adjusted Operating Expenses Three Months Ended Year Ended December 31, December 31, (in $ millions) 2023 2022 2023 2022 Total operating expenses $ 546 $ 565 $ 2,298 $ 2,049 Adjustments: Depreciation and amortization (49) (48) (194) (182) Restructuring, e
Slide 28: Reconciliation of operating cash flow to Free Cash Flow and Net Debt
Reconciliation of net cash from (used in) operating activities to Free Cash Flow and Reconciliation of Net Debt Three Months Ended Year Ended December 31, December 31, (in $ millions) 2023 2022 2023 2022 Net cash from (used in) operating activities $ 58 $ (4) $ 162 $ (394) Less: Purchase of property
Slide 29: Reconciliation of FY 2024 Adjusted EBITDA and Free Cash Flow Guidance
Reconciliation of FY 2024 Adjusted EBITDA and Free Cash Flow Guidance The Company’s full-year 2024 guidance considers various material assumptions. Because the guidance is forward-looking and reflects numerous estimates and assumptions with respect to future industry performance under various scenar
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