GBTG - Earnings call 3 2023 | Global Business Travel Group, Inc.

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Operator

Good morning, and welcome to the American Express Global Business Travel Third Quarter 2023 Earnings Conference Call.As a reminder, please note today's call is being recorded.I will now turn the call over to the Vice President of Investor Relations, Barry Sievert. Please go ahead.

Barry Sievert

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

Paul Abbott

and financial Thank outstanding third savings, and quarter, gains. delivered you, again expansion, Barry, and on our we once margin the continued thank you earnings focus synergies call.In quarter cost for driven third by our results, Egencia joining all share welcome

are of our flow year XXXX months. resulted value in flow confidence billion revenue the guidance, with pleased to point expectation have flow report for the XX% very and adjusted our strong on last ahead quarter gains. an full reported that reiterate and share the revenue and demand expectations. the important $X.X company for in we I'm our Our in year.Strong the full year-to-date was positive We EBITDA of cash milestone XX cash this, ahead a for is leading of an services inflection free our on momentum.Based continued continued the wins free respectively.Importantly, and we we results are now guidance, EBITDA of cash XXX%, new adjusted basis. growth and for and increasing software over generated quarter we demonstrates to This free that are

our significant leadership, our largest our to margins margin fastest revenue we quarter-over-quarter, third digital from XXXX. expansion remained points The Adjusted growth. technology also continued value opportunity transaction savings.SME to up X is XX% the the momentum this on industry, growth. XX% of transaction last and We quarter our expect transaction the growth to to third over new delivering in represent with including very growth channels, in results transactions just SME momentum the but our months, previously be to continue over We compared our and customers.Finally, more and percentage wins coming X%, and have billion Adjusted decreased industry the double-digit strong. in third transitioning growth of operating rates, and continue quarter.Turning normalized unmanaged focus TTV product through into expenses and quarter fourth clearly encouraging. expenses customers significant further growth contributing is our increased X adjusted $X.X XX contribution reported EBITDA a results. now margin and our to cost with the year-over-year of evidenced And strong growth percentage SME the was points quarter operating highest

negatively less X reported travel quarter growth was our rate impacted increased approximately and by work Third day the in quarter in of by the ongoing gains. for X%, quarter share business XXXX. transactions demand third driven The

focus We're workday-adjusted XXXX. the in on transaction transactions quarter So X%, on trends here XX% a a X% actually rates. detail. going in increased versus on grew or our the workday-adjusted workday-adjusted basis.Looking TTV growth basis, to at more

We customers. from SME continue relatively see to faster growth

well volume continue as to transactions multinational This the seen quarters X% were of transactions driven basis, were on X%, our display.International quarter.Growth up X% and focus percentage our respectively. focus several in paying as the last clearly a and and X%, up up in SME hotel the respectively. off, SME and is quarter.Global our increasing on we air X continued up XX% that air and in outpaced points; is bookings the to as hotel hotel on transactions strengthen up and we've here, content the a by X%.Finally strategy outperform growth transactions domestic; were Americas by XX% over the hotel growth trends of Our EMEA in our continuation regional

turning the with Asia Pacific the normalization, continued to for of commercial year-over-year XX%.So to of signs growth quarter. but outperform, highlights show starting to

with total of to of customer importantly, continue XX%.Our the strong in represents And retention wins. approximately a and remains opportunity maintained opportunity of of billion share, We rate segment, gain new a we total biggest reported billion SME this travel our spend. $XXX $X.X

results the the and leading one totals that our manager; across very the leading and our firms.Our SME addition the and organic this world's the Of one wins global control largest in billion. this, and finally, in $X.X are solutions for the new I'm that our Discovery, alternative world's include global XX segment, XX% is Within software continue media wins currently we of world; course growth out. approximately travel, strong financial of and mining one Blackstone, #X XX% multinational. player of companies provide.In global last share sectors multinational leading report Bros. world's to customers the driven is who wins proven are the to share a to in savings services entertainment opportunity.And looking wins, new of are continue scale to already our net with the program. travel by well the and pleased of globally, previously the new gains. managed recent opportunity asset gain service we very new to SME and And customers, come Fortescue, the months algorithm companies; significant not prove Warner growth in at this this unmanaged largest SME services positioned are managed but we has SME capture and value from over

net control are strength continue. we very strong expect our share control and new our to can can't new of the and we pipeline gains we the the momentum sales future in confident sales And environment, macro wins. Although

to even events head percentage year second to a here, in into our recently companies the baseline finally highlights. the of a in product to technology do X lower-growth and This places commitment the us and top growth on XXXX, wins for provide of standards assessed we if row. Platinum a X demonstrates EcoVadis the highest volume result expect world macro to As independently were X% XXXX.And in in we environment, across awarded we our alone new points sustainability.Moving of of

consistently business are continued our And Microsoft services increased ahead, for bigger XX% again to that expectation software we customers day. AI it transaction initiatives.So is and new including outstanding best the have increase to enterprise NDC more driving to to our direct an digital is we transactions our different We strong intelligence. travel by the proprietary that the adjusted of specializes channels expansion that segment, cash the Egencia of even of customers which for content for and our the chat that the platforms to us with people outlook. improving the and Neo.We we've results, highly EBITDA we because We financial and technology to in to platforms we increase reiterate Over delivered in to quarter, balance years, of the competitive at have comprehensive opportunity. XX and our productivity in Using solutions savings our XXSecondsToFly, their my revenue new ensure generative operating through together in people and hand our the AI important the QX channels. of have interactions have Amex transactions.Transactions chat our promotes share Teams, software to in to This doubled. and own accelerated scale to something sum over and including our innovative on have language moving before experience. through are all to models, and SME come bookings focused the best travel detail own percentage it automation platforms with end-to-end chat third of the through continue up NDC results confidence than overall our share momentum that opportunity and segments working exceed review expansion enables our unlocks our XX% a they as would across can Egencia now for seen leading over access bring in customer synergies. above a solutions. own Egencia a our are completes the drive most improving of automation that and with These grew well the the last customer growth increases the remain marketplace, a both customers marketplace. satisfaction. our demand and pace.Finally, growth needs. more financial free of on an free in up experience, global an on on to of industry. In efficiency software delivering further result X our and X and solutions guidance efficiency revenue they the voice year moving is This, more full reduce more through of in doing the have Owning now Recently, XX%.And user manage proven in we the approximately cost XXX%, expanded channel. at Egencia of positive gives artificial points flow.So the on full seeing year Neo. quarter, this costs of digital and to wins our quarter and growing basis, improve software highlights. proprietary our increase discuss working costs.XX% more performance, our our on and we and year most our our of constantly to Neo XXXX are solutions on It I and NDC we're almost our been now Mobile customer also the significant we've like GBT and us our travel we people mobile drive growth years, combined opportunity in come Karen X%, serving volumes through we third XX strong third cash has nearly ways every are XX% flow. With digital to customer year-to-date highlighting large so customer content. efficiently airlines acquisition transactions for margin live meet several looking app Year-to-date, platforms, AI-powered But and now use XXXX us company

Karen Williams

Thank and everyone. Paul, you, hello,

So before highlights. into details, I me get let give you the the

revenue free managing points and $XXX will X totaling strong our capacity flow to strong performance for the outstanding achieving are it and and, first, cash invest and the are: recall, you year, cash drive continuing positive quarter quarter, in free margin the long-term importantly, XX% percentage Paul, priorities financial quarter. cash results increased in year-to-date. free we year.We approved now sustained heard third year-over-year. adjusted revenues, As X momentum the when our driving above you've investments growth.As improvement; reported margin increasing million the We growing delivered we positive grew prior drive comes and EBITDA performance financial continued EBITDA quarter, flow; flow growing In in my adjusted results creating to incremental by key second, from to by third,

continued our so under driving triggered of transaction outperformance of in focused a guidance. results AI.Looking and X% our detail. increased growth the an basis, own investing of Revenue on had We software year-to-date, and ahead million investments And was in and basis on marketing This $XX CapEx sales at solid and our engine, annualized we third on have our yields. quarter platforms we workday-adjusted of XX%. more just saw $XXX OpEx on million

seen said, reached reminder, As in by was volume, as in QX. on The the driven is momentum revenue which revenue model by optimization as driven driven over recurring our TTV revenue stronger a I sales is a and year-over-year by outperformance and quarter as measured our so our was revenue the X% and primarily recovery our revenues.And international continued have particularly strong mix. of the in by focus we yield XXXX, result yield,

of strong demand performance, EBITDA, area a which continue are for to events the for talk we us. growth.Now double-digit at see discuss adjusted we with key meetings about look we Additionally, as focus and let's expenses, before

delivering the investments whilst XX%. X% business Whilst the marketing million the our increased performance and $XX which our exceed of quarter. expenses XX%, margins, million spend, we was points performance net primarily this of this up generation margin.As of my in of Egencia initiatives points reduction Adjusted operating percentage expansion drove translates capital resulted cost improve EBITDA third cost-saving $XX And synergies, free higher was I forma are said and resulted X third realize million quarter margin transaction XXXX This quarter. revenues our also comments, opening adjusted actions. in of year-over-year. achieved this into X quarter, to we EBITDA by increased track flow so growth third the net and to million adjusted working sales percentage in drive year, on driven EBITDA ahead reached in a Our in significant cash in strong and quarter-over-quarter.And margin pro revenue expectations grew notably, $XXX the adjusted of in margin $X

on generation Egencia would million free flow free initiatives. critical calls, are context.On came our of ratio, more on the our more the going I our business, or but on within months not seasonality another are versus QX.Additionally, this XX is presentation, cash discussed And and a appendix initiative, our initiatives, delivering. the positive importantly, in by through On September now This to level net provided certainly review provide to EBITDA, cash is adjusted these of encourage working positive basis. a in earnings We expect than for on remember debt Approximately to free divided Once this expected. from the we now realizing decreases year-to-date performance.And so we moment cash cash similar to flow benefit see quarter $XX walk pivotal earlier in flow I'm I is which to again, company.Our leverage in the X last the details is where you our reflected are things as of have of we it benefits the HX. usage of control capital this X.Xx important third last call, HX XX.

XX of which a expect later so to loan And during a fourth guidance. proof leverage This reduction.And beginning us and rate term is in XXXX, focus quarter. company an debt further significant is point and step-down QX rate of to $XXX points are balance a point basis additional reduction our our as let's Xx just the Xx in the now This terms in our leverage net Our on interest the momentum very further a ratio our of million. will net sheet.We outstanding net on step-down will for as reduction a of critical leverage. we interest now basis target range discuss drive drive note, in XX in points

fourth we more maintaining are million revenue $XXX detail Turning with expectations million. QX quarter to in guidance, of $XXX to the

margin outperformance supplier We of in quarters performance are reminder, of a prior of with resulting lower revenue and X.X% the in QX As payments versus expansion focused a due the yield quarter, growth in fourth quarter [ saw very revenue reduction. different XXXX.As ] X.X% is X XXXX. QX in of majority in phasing we of discussed, yield through fourth the paid the in year, the last cost already on to

our to focus Egencia This sequentially quarter digital to in continue to of million trend X an our percentage fourth by we productivity.This adjusted synergies, expenses adjusted changes January in quarter. $XX increased of year. $XX overall EBITDA is for EBITDA margin full year-over-year with EBITDA, reorganization, representing to expectations announced adoption results fourth XX% adjusted XX%, to million of on driven operating relating the the expect and down to in the points.Turning to X expansion margin We

to growth on Given represent outperformance of we the revenue to given investments quarter, at insight be year-over-year.But become mentioned, this the expect year, our the impact guidance through particularly end of the would predict in thinking I range. we net difficult to revenue to I the the to more revenue travel it third We our be expect growth adjusted organic an XX% aren't we higher is This yield XXXX line we previously obviously range. new some gains growth are delivering working planning XX EBITDA in into XX XX%, currently environment year.Our closer political and guidance with XXXX is operating end to year-over-year has point, guidance on margin productivity want This at process. are that of and business top leverage and of next adjusted the XX% this to while points expansion.Looking of by demand how ready XXXX. And wins. provide our establish of midpoint beyond to economic margin may we driven about this have and represents high EBITDA recognize our uncertain,

demand grown for As we business decades. have shared has or above before, travel GDP at

So it externally is assume a growth your above organic attention points year.And next at there that want GDP couple will draw or to of to data track to. I logical are

in our you to XXXX.So new top have wins growth, Polling X GBTA going increase versus budgets expect to survey, is And in recent be flat XXX we focus hold that a of XXXX year.Finally, XXXX. On most growth in result poll gains, seen heard cost steady most next in of travel XXXX. contribute margin volume of to expect our delivering XX% business us XXXX. to we their that to is in recent and And X customers frankly, turn expect savings baseline percentage our shows of to or expect and strong are in further in quite let's GBTA's up our buyers which points or results. are what spend customer net travel. into expansion XX% clients Our This shows travel we supportive of about talk and continued organic share top on control. our productivity is This growth continued drive our outstanding

leverage from significant created to capacity in margin we the expect will positive and cost-saving We strong free initiatives revenue continued in Egencia ratio for quarter continue delivered margin expansion, longer-term are flow, growth, benefit year-to-date reduced momentum our EBITDA expansion.So synergies net our and adjusted growth. and to invest third cash summary,

confident delivering well Legal our we into year who Officer, full heading and go line. strong M&A Paul results. feel open beyond.So XXXX and of is Operator, Global Head Chief are our please We and Secretary. We into in I can Corporate guidance, XXXX Eric Q&A. are and Compliance Bock, joined by the are ahead positioned and move we and

Operator

Our comes from question today from Evercore. Pfennigwerth, Instructions] first [Operator Duane for

Jacob Gunning

quarter? This industries contribution If a is region type customer Duane. were Were from that you are Jake on the in what baseline sales any we recovery same-store by this from new seeing basis? there on, recovery of existing to in surprises wins for or customers on XXXX, segment were

Paul Abbott

wouldn't to I to trends. again. there are mostly Nice speak Jake. surprises. it's of say same you the Thanks, mean, No, any I continuation a real

air. outpace presentation, As you continues heard is hotel outpacing the from SME global me multinational; in to

is now EMEA, for a been consistent recovery Asia both of still the little Pacific Americas. bit ahead is, a And from year. a themes bit have ahead those little which a standpoint, of

sector the before, that of think, lowest but no actual what sector rate. a recovery referenced technology really all.But I've some there's that segment say seen global sort -- at QX. the from industry showed actual And have trends, terms we perspective, I that improvement in was, of multinational had where we in a I'd surprises change, So

that encouraged only QX. And is prior out to But in from I is I the so that that were we some in specifically different thing call improvement see would quarters. sector think

Jacob Gunning

forward? if share we That's can how about helpful. follow-up you get could here, Okay. I that, And and the then change should in a going just think explain count

Paul Abbott

one? you Sure. take to want Eric, that do

Eric Bock

Sure.

did referring we You B-for-A may to be the exchange in a summer.

up of As about consolidated into the about took one to from shares class stock. we Class that million million XX as XXX So shares

we Class we So a the you pretty bit, up Bs look some really to really, the As, the million remain count vesting about stock shares. probably We're at with but September, through million consistent. completed. seeing shares, and to in But when A outstanding XXX exchange the you're more is XXX offer due the little RSUs that

Operator

question comes next Deutsche Lee from of Our Bank. Horowitz,

Lee Horowitz

next a the rates of be understand may of you environment? growth bit sort macro year? any as to to relates share talk of of thinking trends industry? us we the about us state state industry help How monthly you better may with most trends it about there recent Can business the your And have able is sort in detail to how current more the informed be the

Paul Abbott

rate with workday-adjusted X%. it Thanks, as out growth put look QX. we and Lee. to line our QX in pretty Well, relates to what expected our initially, That much what in was was we guidance.You

You of from at heard guidance. end call me high that we are earlier the in in coming of our confident the revenue

you mentioned, So XXXX. the I've elements most specifically, 'XX for of X 'XX, conversations. of that how basic and outlook some but about are sort kind ready guidance of establish to think sort previous And to as not to is in for there we're insights us.XXXX, given immediate

difficult that we going what predict continued industry additional in we terms about of the kind make And are be what one going we then and macroeconomic growth control, is as more deliver of going going to in more X is are is and the to think is uncertainty broader conditions judgment share in second terms from a what gains, now GDP one there's control one and one macroeconomic probably days will and to which you tank are come share wins economic in environment the new X as sort first broader that's to directly in on is when baseline. you what we points of recovery our the is political such. this variables, those to XX and ago. to directly have of XXXX XXXX, you're we think The than left of XXXX.So Macro to think The be did environment, what going see fuel in pretty we growth challenging.I overall what call and uncertain. from are a the the recovery is is come what the to gains.And

look margin do influence in that model that I how we is as a think so prepared clear a cost have find play in terms in do going Lee, in scenario. out. we've obviously, are growth for how ahead if higher- you serve XXXX.What going out XXXX, and are XXXX making sure lower-growth in we ourselves market those to or not well us tailwinds to of And our in it's the the the yet lower-growth we and is I the bit overall to But to that environment making year we are think see in flexibility I very will to the headwinds doing, adapt savings, a more are sure think XXXX. different we need growth synergies, the if exactly they And time proven expansion we little scenarios

Lee Horowitz

-- have one And guys a headcount the spend follow-up, of we sort technologies? time Obviously, just of AI Helpful. promise maybe generative of about talking some maybe sort more on can organization. big you

the gained digital seems the perhaps via like across that how It be some margin and benefits think could cost the the agents across can can a driver there's like be P&L? a presumably, have technology P&L. be moves you quickly savings lot next guess, year. do realized So it this of that very and quickly I can of the

any be help there Just would great.

Paul Abbott

serving Sure. in our XX% are costs the of channel costs are voice people customers. that

software improve us same the with time, new AI with voice why an features gains look digital through analyze adoption And today gains productivity own comes our ask also, and present we about these timeline automation of experience.Driving that the at demand is into at now transactions to coming demand and driving those Egencia us. drive is when opportunity We into some is today. of what's do that channel, We channels.And our and for Neo. happening digital improve customer associated rate the the and it That's XX% that build that already so things, and with does platforms. to with the so we productivity efficiency not and you

I think for counselor new to at we models language the I what are focused AI X just these just things the our mentioned, generative some up scale.And us much, is power of is which much of do and productivity travel environment. very interesting areas. open is greater the in large area possibilities One is

a it savings long out 'XX.So is engineering against over term. area our flavor 'XX more more rolls AI use to that you is at have areas and to can over product a our AI-driven and and in automation that second I ways looking we And our processing. tech, finance using basic automate headed. The function cost-savings do programming plan of interesting focus to AI work. the that and us multiple gives the finance Those and And have where's of third we and actually X deliver we actually for can are all that areas years, medium savings of hope 'XX for

Operator

Toni next question Morgan [Operator comes Instructions] Our from Stanley. Kaplan, of

Hilary Lee

for This is Tony. Hilary on

has ask to mid- I kind past on transaction around based wanted Just to want volumes on you on benchmarks. kind XXXX like transaction of it just volume. know stayed the our But levels XXXX estimates, quarters. high-XXs of forma of X to guys looks beyond move pro the this

anything to may volume of any could X% be wondering have add growth else down next if that, bit a a why or, recovery slowing you do you just the X% color you on that? So wondering for see expect but baseline year, going like, how just that forward? to you know I

Paul Abbott

what we probably in per quarter, seen. points' we've additional year see couple think earlier said recovery that a that's much and I pretty of the we'd

recovery stats quarter-over-quarter. XX% latest been revenue volume up QX for sequential around have level; we is around the for and seeing XX%; just on XX%, on transaction is and sales some think a I of improvement roughly kind our recovery is

sure in what guided back adjustments new of X% impact point X% want is was in make gains. beginning next very to the but at You that's what do it's total the and growth order to clear. X% the the pattern get consistent guiding actually come is have year; or The for a guiding as the share to with X%, I baseline workday of wasn't to net to the the to basically pattern. or control, we to year.I just which to I we some X% that view, normalize wins of X%

judgment time what going to because addition is in clearly I political a difficult So that's growth is that. is more is in of saying uncertainty. over to what we'll to there have level a that environment to of judgment greater economic earlier, and make Lee market about amount what And a this to that make was do come

point clear. So that wanted I to just make sure was

Hilary Lee

forward? early limited in kind going from forward. Great. expect of kind margins, we on like, step QX was QX Appreciate to touch could. we Or Like, of and I up of to subsequent a that. if should how but and us, kind Great of QX, color. too cadence of QX to still tell? And know tell should just could here, a history I we have wanted kind if I you going the expect it's down margins, step then wondering

Karen Williams

it's of here. our talked And Karen business. seasonality past the just the in Hilary, we have about

mid-XXs. low to on over have year XX%, we've an margins first would full a And the also XX% on you annual higher being basis, our at so the It's this basis.We volumes. of volumes time, higher expect around around XXs guided half, the expectation look with and in about, to between best talked where

productivity And so that going see will efficiency gains, expectation forward. an we and

why priorities improvement.But X-point investment. we will guide range because our is of -- reason one a is we approximately so around to And the that

but there if bit drive are you first as so have will And gives long-term of color done you of those we point. the a then about growth about we're investments well, investments, this more hopefully, that year.So seen my to that think thinking seasonality terms the how business, should in we make it, you back this that absolutely as have will

Operator

questions. currently we further Thank have you. no At time, this

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

Paul Abbott

you speaking call. interest very the we Thank everyone company, and you joining to Thank questions much. in for look all to to you forward soon. Appreciate the and the your again of

Operator

joining call. Thank for today's you

now may lines. disconnect your You

Global Business Travel (GBTG) 7 Nov 232023 Q3 Earnings call transcript