GBTG - Earnings call transcript Q2 2022 | Global Business Travel Group, Inc.

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Operator

Good morning and welcome to the American Express Global Business Travel Second Quarter 2022 Earnings Conference Call.

As a reminder, please note today's call is being recorded. I will now turn the call over to Vice President of Investor Relations, Barry Sievert. Please go ahead, sir.

Barry Sievert

Hello, and good morning, everyone. us second joining call. earnings for you for quarter our conference Thank morning release investors.amexglobalbusinesstravel.com. website earnings issued is This an our which we available on at slide also remarks GBT today's which Relations on Investor the Amex The is webpage. presentation accompanies available prepared acquisition our of to represent statements cost COVID-XX or about industry that beliefs the including and contain future forward-looking trends, We would events, you synergies, duration comments like expectations advise among that others. our and savings effects actual risks call. All differ uncertainties and results forward-looking cause made conference to from may today's involve statements the statements materially that on and More issued information on other uncertainties statement the these is a July morning filed in and on release our other XX, earnings prospectus filings. SX and and risks related SEC our registration Form contained this on XXXX be non-GAAP expenses will measures EBITDA Throughout financial as EBITDA, we operating margin, EBITDA, adjusted today's flow. call, presenting cash certain adjusted adjusted free also and such financial these available call and references the earnings reconciliations supplemental adjusted of the definitions measures are – GAAP non-GAAP during from this of materials to the today's release. in items, and GAAP measures non-GAAP All terms directly have comparable measures certain been in such most presentation and exclude on Executive us Chief the and of are Participating with our Legal session Bach, Gerow, Chief the our Financial Global Chief Officer today Head today me Q&A Abbott, Officer, Officer Paul for and call M&A. joining our Martine also is Eric to that, With the Paul. turn over call I'll now Paul?

Paul Abbott

recover listing quarter my the public Barry, a the and company. June. also call today the a growth quarter Express for of company public say the much, section quarter. in to transactions as for pleased levels to very us in we XX% earnings reported start was pro for company second of of continue I'm highlights. all million beginning And to EBITDA second going you say next And thank positive really the significant GBT. business in the live joining to of with I'm American milestone course, XXXX XXXX in quarter forma adjusted pleased Thank first as marked Well, the welcome chapter everyone. of reaching you our travel and for to XX a

strong. sales be very continues to New momentum

signed wins, important Over high Overall, full of year a the us share X.X gains see of and first guidance billion the in raise give to equally we've customer the maintained levels XXXX new continued months, XX strong once very half we performance that again. past confidence and retention. XXXX our

XXX% second revenue earnings, XXXX. QX strong reported over million we quarter and up So totaled revenue XXX

result business forma pro reached the the driven EBITDA positive for course business. recovery levels revenue The the recovery reached the second and by XX%. adjusted primarily strong of transaction recovery of XX% of continued quarter was discipline Our travel cost and across XXXX

million. discuss billion strength going year gains full XXX year revenue and a between the guidance give and our which As between detail of full billion the and of business range travel guidance the raise in our range to us to XX million of to we're confidence to raise continued X.X adjusted XXXX X.XX I mentioned, EBITDA recovery a more and in our share to

the Following very gains. the demonstrated we strong has momentum wave in the quarter, share the to travel continued business the impact of first Omicron see and from recovery benefit our

business the over of the that And recovery demand prices. seeing see We reach And and transaction year and travel Second month where June for of an from constraints percentage XX% currently deliver strong the an a year. rising recovery is quarter to in was that impressive growth. quarter XXXX XX And percentage March of XX% the we to continue XX quarter throughout some greater in June. significant more of the improvement in It only we of increases believe that environment was challenging complexity points strongly to conditions. what increases. despite runway has are customers we first transaction macro-economic very Amex there's improved value this point for to this travel, supply environment the GBT

industry us and new service think savings And Our I differentiated commitment really the continues leading apart to the from set of our demonstrates to strength performance, wins proposition. competition. our value

the continues particularly of XX Our the GBT and the in in by wins increased of last the XXXX XX% strong, and representing stronger SME for XX% June wins new pro segment over the to recovery $X.X July new forma customers month performance recovery driven wins new Egencia to segment through across months be and end SME of reaching the billion in SME SME momentum a TTV. recovery Ovation. of transaction

of Morgan Chase. X.X And customer I third course, XX%. services we'll recent of has global I'm and contributing months major a JP quarter wins to Some five say that new JP this very XX Equally this say of end wins at the top company. to over serving billion last have July includes important, of our of new the been delighted year. that the privilege pleased Morgan financial the retention, it's to through stable that from of am

We million XX. XX% Egencia levers have moving margin rate We've already of we remain synergies permanent we track are from million actions XXX to savings. So in we track million to-date, we've full levers the cost of that and the deliver that to Based a on exceed XXX of have. expected that on achieved very the run completed the to the basis. of Egencia on XX million synergies expansion on the discussed expansion, before, have margin important on we for XXX synergies two of we both and

we've the line for these to fully with of savings expectations that XXX the already have to been taken. discussed is QX saw increased permanent actions required XXXX. million discipline before, deliver in Turning as the cost And the continued guidance in cost we

discussed XX% travel and in in June. That in certainly world, the saw to drove the companies as our we quarter, to around customer sharp strong previously efforts the So return rise that And travel mentioned, from for an our particularly will of the reaching period as that reflect terms September. forward to gains. recruitment I to easing best as believe has continue in business of recovery travel to deliver acceleration of these restrictions on returning certainly looking continued transaction trends well we we the prepare positioned be share what expectations, travel quarter what we COVID-related as momentum, ensure of are busy business travel business a our for we second XX%

of from our is just customers complexity. as the business travel our is digital the very travel I increased and we're of you've a airlines, So greater in through GBT second GDS' and Overall, channels from voice travel that and U.S. think powerful make know to Amex period major to to the quarter what proved backing continuing our sure expanding services we're invest demand demand the you've strong. us, heard I as that for heard the providing

in XX points XX customers at than the recovery recovery percentage XX. to are for strong are the detail. In some So reached and of pro recovery recovery bit the a is continue customer transactions forma are a rate of compared and trends little second above a that's global let's multinational There more which XX. to outperforming. air. recovering Hotel faster the take of the quarter the at transactions that pace XXXX SME above lead XX% hotel look reached clearly points SME a recovery second percentage XX% air quarter, for quarter, transactions segments

for percentage percentage as points versus recovered transactions, So air transactions. the XX first in the points saw we XX quarter hotel

So we continue outperforming to air. hotel see

international recovery has EMEA largely completely, international You'll first the world onset now the has restrictions domestic since last currently page of then, of a also the dynamic the have this volumes few and since shifted regional areas in improved recovery January time here for travel removed And caught dramatically in the or with in have see year relaxed basis, leading the now many the and up are finally on see you'll on here, recovery. pandemic. months, domestic the been as the around

to, particular has outperform. us Australia Singapore. Our Asia being to that's like in for restrictions removed due and in continued recovery countries Pacific And also

So in new mentioned, course, that rates. moving our retention customer runway the of we have. on earlier and our growth presentation significant for to wins today's And I

than new new And that in the believe We are wins is large we our very X.X industry. high wins. the pro and worldwide, even trillion customers. we levels continues pipeline, fragmented and very this the proposition seeing value recovered it record to regions valuable And that in our a right the service more XXX% we and it's XXXX versus leader now forma, position. in leadership delivering savings our in strengthen very of more are many environment of levels And we're sales see to

the of the underscore and value, ratio, very in proposition the think retention, customer wins customers. really delivering I new high stable our So loss we're strength momentum that value the levels and of SME win to the

Now that product a part we're strengthen are technology very important the our investments proposition and value to making of solutions.

the innovation backing move us customers, we our supported Delivering let's unrivaled is to and role And that and in business. So the our tech and a in to product across in product and powerful continued choice differentiates significant about deliver investments experiences market. the value on quarter. the this deliver value, momentum GBT what talk of by technology play Amex ensuring

that QX. we unrivaled to Preferred platform customers. tech extras of on delivering have the our customers. some deliver continue highlight savings platform content the extras Egencia me rates extend of is to achievements the significant let So all to to and negotiated we And the our value preferred that unique Egencia from products

our their also before quarter the our We Slack content, addition, Travel to And solution. consistent can we serving new Neo, channel. non-binary around gender our the better pre extended sure customers customers WhatsApp, that This choice. digital We've unrivaled Google Expense us to invest chat. more capabilities, AI business expert to continue Apple customers neutral discussed within channel reporting, world. to approval servicing and quarter bringing of improve invest capabilities, very continue more in expanded the us chat of serviced choice messaging make include be Chat, our travelers auditor types available there's Egencia accommodate trip choices in the in in to now area our our this platform. in the it's and We allows and in make We important in we

experience assistant clients continued including single our the app automation, mobile of in the GBT of with Amex the sign-on the enhance the rollout chat introduction and UK. capabilities our also AI to We virtual

in So of important very us our travelers. features these unrivaled to all deliver an are helping to experience

overall the here, improve and to technology us performance. allows of deliver applications continue platforms. our of Finally, highlights efficiency to new capabilities include Amex the all deployment cloud, the migration faster the our which the we completion GBT agility of and public to Recent efficiency the improve of of

the We also of our to completed deployment primary the markets. GBT one platform

world, GBT service consistency one as deliver the improves that platform, and the counselor of improving customer toolset suggests, one name we the around the the Now again, travel creates standard the simplified the experience. efficiency

So accelerating detail. earnings quarter we're second it review completes highlights, savings Martine QX to of cost power the through of synergies over to the to my financial and how course, results permanent that hand review Egencia and I'd to more review the like the in

you. to over Martine, So,

Martine Gerow

you, XXX compared will Thank The add EBITDA done million new track key industry wins were and baseline as very almost hello, from the only through business be and Paul, really heard levers. the just adjusted much two that this recovery everyone. on Paul XXXX as you to and to

million synergies. by first the enhances our expect driven XXX important know, growth the of Egencia and to We significant acquisition the total, with XX cost very record. This in side. this generate As on of on revenue M&A SME revenue capability in those accelerate which synergies our consistent strategic million levers do is million are the side XX harmonization to space you significantly of and acquisition track

that to the of well. proceeding is So I'm integration report Egencia pleased

On Egencia new strong and a the ratio target. rates commercial customer win and win of front Egencia maintains value retention loss ahead tracking

And targets. for which are We're to targets was exceed key million reached our revenue the to on track exceed On the contracts. for synergy supplier side, financial XXXX. we've our XX our tracking majority of agreements harmonization we

Amex into fares Egencia the extra platform. launched have hotel We GBT and integrated preferred new inventory

results expect and rate on center on remains Based migration cost which achieved Amsterdam XXXX five On side, might actions of And our driving which about locations, XX making tools savings exited thirds have the cost at the in or already to-date products recall XX% we track, we overall estate office million data our energy. we the recovery. of you side, two we've cost volume basis, have on the and which exited of we've full completed technology of a XX already. combined synergies in migrated run real in

million. driving program in margin for second savings permanent the cost The XXX is expansion lever

these fully XXXX. were Now, XXXX and cost executed initiatives savings in

recall, may already efficiency those as of that to regularized coming action, And of related to we've benefits have completed cost continue savings you the As and recover. from XXX% the will XX% volumes of the we are realized be actions. remaining over the

And we as cost we expected it compared have to synergies put XXX% our structural by margin EBITDA to savings, so with adjusted Egencia opportunity at if XXXX. business together permanent our to believe increase recovery industry the our XX momentum, the all in we points up

Let's to the now move results. quarterly

delivering important adjusted we heard positive report EBITDA just to Paul, you quarter million. As by in reached an that XX from second very of pleased milestone the

on XXXX. acquisition November reminder, as Now Egencia the a X, we closed

level, really return have our the We to continued pro you recovery compared second Egencia XXXX. percentage quarter of to the easing the transaction pro Egencia. of restrictions, the course, to That So for our forma reached the overall primary and the forma XX% the with percentage for March office share XXXX. quarter travel which point XX And we've quarter-over-quarter gains with been to XX% an is of quarter. points first return drivers again, fourth the transaction the Paul. In of XXXX as from recovery XXXX is quarter a benefit above combined heard result improvement specifically, second from behind of demand June closed XX doing versus as

international was well quarter and as by TTV of the total X.X XXX% to increased billion. transaction growth increased really in recovery value, driven by increased Average total Now in a transaction transaction fares. bookings or that's year-over-year value the and XXX% as XX% the

quarter XX Our of Product million, services second revenue and in quarter the by XXX%. increased to quarter you most up of revenue driven largely transaction as total XX% COVID shared we've the actually XXXX events of and travel of and first in relatively from the component XX. meeting less demand restrictions XXXX in growth very XXXX in increase events, revenue the came impacted in the that's quarter services limited them strong. as more found XXX% product was demand in the and fees increase, revenue for and XXX management as COVID-XX increased we and relaxed million growth and XX% XXX% by with in professional meeting drove is a both reduction and because it compared professional to is revenue The the from in

first the at million in Looking QX. the of of quarter XXXX point recovery XXX quarter-over-quarter second revenue percentage a XX and improvement revenue versus is versus improved XX% quarter the

per to due and for faster Now revenue rate and a as air rail. in air increase than this more earn recovery, is and hotel at do the recovered transaction we you tend to transactions transaction as in air hotel

strengthening the of second quarter to trend the by particular. was in recovery impacted as now dollar do Although the recovery expect in this we revenue normalize, air also continues the in

positive as with forma at by as until recall, and quarter flat higher value second growth. the Revenue only Higher to was over XX% the overall you our as XXXX and sensitive on agency revenue ATP quarter in and but drive transaction XXXX portion Our negative of is yield TTV. than yield TTV a discussed may or total average pro total compared is rate TTV acquisition. faster the is revenue a price it to X.X% a higher revenue prices transaction revenue yield of on revenue impacted we've in

and of to momentum million XXX million in is due first We strong delivered million year-over-year quarter XX this continued EBITDA of the strength discipline. positive quarter-over-quarter from improvement XX that have in year. trends cost an adjusted and adjusted the of We EBITDA recovery

led to which XX first Now this EBITDA an quarter the the of XX%, above is adjusted margin quarter. in points

fall CapEx the as defined stronger EBITDA which EBITDA by to flow, incremental was we through cash reduction was is build cash quarter. of had largely quarter revenue to free negative utilized increased a and Turning adjusted total XX in pro in building partially the to XXX in operations XX% operating expenses adjusted XXX% CapEx, And and little partially XXX driven decreased And CapEx a working defined higher through incremental in flow combination free of resulted as million operating by cash EBITDA as recovery this million. XX% higher as is of is increase this on our a demonstrates like by adjusted leverage. offset capital adjusted in and over loss backup in the quarter the travel operating forma which has million from cash very fall business in working capital continued, basis the compared offset the revenue second which expenses, quarter in the

revenue and higher in have driven growth hotel if XXX% with financial exchanges. look forma XXX% revenue the transaction to and pro we rate very now forma second [indiscernible]. forma which also and as rail XXXX up a pro impressive Egencia first QX basis. pro you and XX% by air year-over-year in of and transaction TTV past, XXXX XX% a So trend. basis, very Revenue XXXX our is second cancellation forma was to was quarter recovery below percentage and on second to pro discussed our of was growth was the somewhat versus forma a pro by look XX% Revenue XX point totally which recovery at improved and on that On revenues recovery of faster versus XXX% compared which improvement year-over-year basis basis up point level, XX in quarter a [indiscernible] volume by the let's a improvement results, we increased the again have to pro as of forma percentage compared on of component versus a quarter earnings with strong a transaction is transaction acquisitions, we XXXX quarter,

expect adjusted strengthening continues, trend of the forma revenue. by a normalize I And versus XXX impact basis through in this EBITDA, which and pro was And to our a million, previously the XXX as a to dollar. We by a also compares recovery positive recovery margin a on stronger revenue EBITDA finally mentioned, air transaction improvement represents as million the in Whilst has negative XXXX revenue. impact has pro disruptions travel forma the abate. improved And a it dollar impacted fall on this of XX%. on

Turning we flow, to capital confidence liquidity in turn expect our cashflow positive cash as demand in have position, build normalizes. and XXXX to and to recover continues working

free less We flow continue where CapEx. operations, long-term of cash conversion is XX% cash cash approximately as flow to from expect rate a defined free

million Now the drove business as second indicated, totaled quarter the sharp in to XXX increase the working cash recovery of significant capital, the consumption in travel second the which due in rebuild quarter. I

do expect of demand guidance moderate expect recovery. over when we Now we cover travel a year. to cash in will And half improvement our the to and that moderate back more this business the consumption we we talk

we nearly $XXX of in June have million As XX, liquidity. total available

PIPE combination preferred As Exchange million equity and the New second million the net cash from ticker redeemed new a size the XXX are trust and GBTG. reminder, and business resulted York at symbol and in under we Stock May now of quarter. trading the we combination our in oversubscribed and closed business in proceeds XXX of The end on the

our million adjusted should with to up increase net XXX our in flexibility debt as the Xx Xx to need to EBITDA have with temporarily shared XX, finance we June additional target we long-term remains is activity. net As of leverage past M&A you

shares includes A by shares XXXX, our that our registration float we have now stock upon by well covering the our were currently B are this hold the of million statement the connection common of improve fourth of that the to shares expires. extend and security. resale lockup eligible of shareholders issued are which are on contractual when Class approximately stock. XX of stock, as effective in the the public on that of as registration sale Class efficiency held which This approximately And to exchange for Class place true with we certain would for XXX quarter of and is in eligible this common million shares, resell be holders A in legacy Finally, in an the issuable statement, trading the PIPE securities, the and sale expect

our Now, let again turn heard as we Paul, from guidance to XXXX me which have you've raised.

current the our confidence Our recovery us increase guidance. to strong second quarter performance year give again full and XXXX trends

to EBITDA XXX to increased is We full adjusted our billion billion in X.XX guidance have now to year our million revenue X.X year our XX full and guidance. million

reflects pro recovery revenue Our guidance of XXXX XX% XX% between a revenue and full revenue. year updated forma

revised recovery a approximately for of is based Our guidance XX%. transaction of on expectations balance year

you second Now in Recovery was you adjust recall XX%. was the may the June workdays for quarter if XX%. recovery in

modest So recovery we're but continued in the second essentially assuming a steady half.

Our approximately adjusted adjusted EBITDA quarterly of guidance higher margin previous than is expectations EBITDA XX an reflects and basis. X% our million on

of higher Our cash additional third the in of to anticipation month staffing note reflects recession. our not September XXXX a impact positive in and for include October the that year. free tend potential our which and do the busiest of guidance expectations XXXX Please guidance flow in quarter volumes be in

we as XXXX Thank and public we'll it our increasing questions. and Again, And financial for GBTG. up, interest. your those will business like travel, quarter very our are open now strong cost to of results operator. the team a to much And company. with forward execution. synergy by very work supported expectation second turn share And Egencia results. gives portfolio of share our you sum this now very for So long-term our thank much look a we progress produced members for those dedication would as savings. to their to listing and all permanent confidence and delivered you continuing I And complete recovery gains I in to continued us hard

Operator

Deutsche is for question Horowitz Bank. Thank line open. from Instructions] your comes now from Lee Lee, today you. Our [Operator first

Lee Horowitz

Two, if I for taking Great. could. the questions. Thanks

with in year? the of half are you should And maybe steady modest, as anything for one too looking in this guess being then full front looking pace year mentioned half guidance to down relates based I be you're a recovery, slow to recovery year. costs. modest looking it as but So transaction the you'd we the why for of on but the the terms the back

So permanent talked how of you million this flows better be through can had At so about you that the has much. into capacity should achieving $XXX you us in cost if offset that inflation in any savings. XXX% wage year? help point, understand how And about we this next Thank thinking year?

Martine Gerow

Hi. This is Martine. question. Thank the you for

So that a is improvement recovery, [five recall just [ph] to But at the when business a there the you quarter particularly recovery in Omicron in from improvement point] confident a We impacted quarter. on sure that to very second improve. some the economic in want various balance recovery seen expectations, the the But and airlines. But improvement half. us. may first in second an impact feel we year, are look is across expect year recovery the will balance continue elements a improvement. strike you make There we've publications, could that again, headwinds, of demand balance we steep in of that steady also in certainly that industry

And on therefore, XXXX. One against shared the partial have that believe inflation, in a whether On that cost will you revenues a impact side. an inflation we really additional or of the impact hedge which that basis, have we result hedged revenue hotel in of would result our direct impact And adjusted a two on the the think on you is airline, have part any of way that the million we coming and On we for so on EBITDA. million would XX% second is actions XXX we've and information every basis. a X I is, completed it have before management fee costs. the about past net the need a sides. path the with merit inflation, side prices, ticket about of if we to And to the XXXX about from think the have inflation, is, merit-related in is have that cost indeed we and point

Lee Horowitz

follow-up one point, just on if could. Maybe guidance the I there Thanks.

just that had you are of economic mentioned, So top for of mind some obviously, the headwinds everyone.

assume conservatism going with that that some of of in your around degree guidance year So it larger fair of to the guess are given costs the the way allocating the is incorporates mind, back environment. be kind enterprises I half to macro in

Paul Abbott

add Maybe a here. Martine, I'd just perspective

think, be of struck the year. to this rest a I there's balance for

some and some I right headwinds are we're there find And there to think also are tailwinds. here. trying the balance

to the I believe been of and from international but constraints. is We to recovery same market more in X% is certainly key markets, in challenging. represented of But the the momentum, supply also some operate not just strong the airlines, domestic China time, think our airports key sales there's one certainly China, macro particularly operational continue. that the challenges travel tailwind. headwinds some and at we example, the economic And believe that in have we other going the also that's of quarter, that total that's second conditions China. in major XXXX become There's markets segments.

and quarantine. Europe China, recovery of markets days example, the to quarantine, when there's recovery segments. was still to But certain market U.S. and So days room within at up, essentially in opens China for seven it's Because China definitely it points five for Asia. this now is today. certain there, zero That still XX

stabilize. continued starting So to that's think come a from improve, tailwind think I the I operational will also the tailwind. issues supplies and starting to

guidance that's we're to it's and so, tailwinds. the headwinds right And recognizing, the trying find at. And that of the what's to level balance essentially, driven

out. hopefully So play helps. of how in the right uncertainty of I obviously headwinds amount I striking still terms balance. mean, a fair some But will we're of that think those there's

Lee Horowitz

helpful. Very you Thank both.

Operator

you. Instructions]. [Operator Thank

Okay.

further have for questions We no today.

So Abbott I'll Paul hand back to further for remarks. any

Paul Abbott

Amex Well, GBT year. very want I company. they've again to forward in the close continued for strong the by half in you you you and just the and to we soon. first attending. for team much, of our to very updating appreciate your the thank And across delivered do look thanking Okay. results that we much interest dedication customers their our Thank

Operator

Thank and you disconnect for joining today's we lines. now call your may

Global Business Travel (GBTG) 11 Aug 222022 Q2 Earnings call transcript