GBTG - Earnings call transcript Q1 2024 | Global Business Travel Group, Inc.

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Operator

Good morning, and welcome to the American First Global Business Travel First Quarter 2020 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, Jennifer Thorington. Please go ahead.

Jennifer Thorington

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

Paul Abbott

year our Total for Jennifer, we XX% billion company's line In of and continued fewer adjusted with quarter and growth this to were profitable $X.X last full value to continued and demonstrating months. quarter and would reach SME of $X our for the progress software year These share X%. demand you, our EBITDA significant segment. joining TTV our Increased against and billion expansion results history. reported gains, earnings new new margin grew this gains. strong track leading Adjusting in work first be transaction XX growth everyone, and services Thank put grew with XXXX the This EBITDA expectations our financial resulted first the in versus with revenue over includes highest of respectively. in wins, the in for to results thank X%, We days welcome large X% quarter deliver the adjusted on wins value quarter delivered last guidance. year, you XX% first quarter, strong and call. first continued us in customer share

Our focus on operating is Adjusted clearly of X% year-over-year. QX expenses compared adjusted results. expansion margin also points driving to significant increased just operating growth, revenue in evidenced XXX leverage X% we basis financial drove EBITDA and our

flow invest improvement the an Our additional company, free progress growth generated of leverage to our opportunities positive the of year-over-year, in for flow we shareholder million and $XXX quarter, us continue an returns. cash remains and to important free We lower focus positive cash ratio. providing million accelerating to and in $XX our drive

that we X.Xx in of Importantly, value represents entered have transaction of we EBITDA, The to multiple into a first this year quarter, approximately million run attractive approximately close the post-synergy an of value. CWT. highly our significant agreement announced including will shareholder the adjusted accretive is and acquire cost transaction This of identified expected second to create annual $XXX million $XXX accelerate in and rate growth half synergies.

Starting and quarter in and we increased the our our financial were execute continued year, strong demand percentage the negative X%, deliver X growth. of as largely by will a there the momentum our for on share of was workday benefit half over quarter, the second driven impact balance an results. Transactions travel gains. offsetting So XXXX. timing point of note which the in approximately strategy have Please transaction up with business in

basis TTV is in we and ticket the revenue. transactions professional transaction up reported higher growth, up to a recognize a note was XX%. On quarter, for transactions, basis, a which refunds for was gross exclude that were hotel driven basis, our revenue rates. and the growth basis, was products net basis, a cancellations, higher a prices exchanges. up million with transaction on measure increased on growth primarily This workday quarter. On to workday better transaction X%. adjusted and average well previously room aligns from by and reported driven also grew the So adjusted up way X%, TTV like-for-like X% Please growth and Revenue on now as X% $XXX as TTV was demand TTV reach in and services. by

growth and EBITDA of operating in XX% leverage our resulted million. on expansion $XXX Finally, to adjusted margin focus

gains Solid by transaction and business our premium diverse from driven travel growth base. for share was and demand increased customer

worked trends can our which we've you expectations. growth true at was here, line see day with momentum. in more The our so detail, in adjusted absolute the Looking

saw customers However, multinational to global the different. shape relatively compared was We customers. growth from a faster SME

global Our up very multinational, we've in particularly several transactions seen up up In first across transactions growth sales positive first quarter technology approximately F&E XX% global multinational same-store the X%. sectors, XX% were quarter. and

mining, We utilities. also in growth services, and professional saw energy double-digit pharma,

of also that Our in year to spend X% full year points. the approximately by now an reflected top most percentage of in X balance the has QX This improvement the to on XXXX. strong shows customers versus increased up these survey our XXX survey, be over recent customer expected percentage points X is trends. more percentage previous clients spend expect and travel this of it's The travel

and we inflation, over SME last has percentage by our resulting hotel growth sustained broader by increasing well This SME, of highlighted believe Air bookings and our both X%, by focus slowed in content is We driven growth industry X XX%, same-store in TTV strong in as as transactions to SME and also X% choice. was international reflects sales. strengthen air transactions, transactions. continued This display quarters, the air XX%. higher U.S. the interest driven in slower and Express points up in of largely being Air hotel which TTV American was and value spending. their up QX more outpace customers on customers this trend with U.S. X Growth with that very controls intentional For with as hotel higher provide trends Domestic X%, results. is continue a on costs our volume stronger to growth more

Finally, here transaction a regional on basis, growth and in X% Americas was EMEA. the both

Asia the to growth lead at Pacific continues rates XX%.

highlights. turning the commercial So to

over last continue $X.X We new to the total of share gain months. wins and reported XX billion

Importantly, customer at high retention remains XX%.

remains with customers, opportunity approximately represents of travel $XXX which biggest Our billion spend. SME

managed opportunity managed a already are in this travel We in not leader travel currently segment. is in XX% of a But this program.

value my services and recognizing managed more leading the and a software customers are of is our As our progress demonstrates clearly and professionally program. more travel

SME a XX last result, over As wins billion. $X totaled the months

XX% on highlights. software Egencia. on Neo transactions first in digital the come in our Neo our quarter. quarter. we of count platforms, Moving our product now growth the first to Over and XX% customer In of own channels platform, bookings and through came through management XX% spend the technology in our digital saw

spend Neo Our brings Express set use are to virtual better cover partnership cards recently with the now cases and all Customers also an cards budgets at in this virtual using announced place. and And into expense integrate travel level. to within purchasing, American cards is virtual to spend data Neo one control with gaining they're over issuing employee additional X individual X traction.

have into X/X the in synergies event we important an executing the and with agreement course, deliver for entered cost industry This on significant announcement that against agreement priorities CWT. that to to our first quarter of time. fragmented shareholder grow and our opportunity clearly we delivering acquisition growth, The was the significant drive and earnings large a revenues will an over shows of M&A by contribution CWT our Finally, value. are acquire in potential

synergies teams identified. established, This us and that $XXX post-synergy highly annual we acquisition record multiple track run significant accretive driving of now in first can have adjusted rate integration attractive year X.Xx achieve been have shareholder project Our been already EBITDA. value. to and to in thereafter, proven We the million results neutral a our that the EPS be in the confidence gives cost

continue now to in to like hand half more in detail customary results it XXXX closing XXXX, to the including discuss Karen of to outlook. the over to of receipt our the occur I'd before moving We closing conditions, financial to certain And approvals. expect to second subject regulatory

Karen Williams

organically you, when flow cash priorities I'm both all Thank key importantly, which capacity performance, Paul, comes it long-term X growth, and with and M&A. really we my the strategic invest accelerating made and in hello, previously expansion managing I've talked about operating progress to and sustained margin financial focused leverage continued on X our through and everyone. to generation, areas. have are drive driving creating happy

to this. higher and substantially Our positive cash expansion free flow testament significant earnings, solid margin are growth revenue

So our performance now let's turn more to in financial detail.

average year-over-year, driven X yield, in we prices expectations for $XXX and This and increased TTV heard also revenue first due non-TTV-driven our X% modestly from of call, the effect the quarter, was rates. timing. factors: quarter grew volume the from growth. you components airline largely TTV transaction driven divided First, which reflecting reached As calendar up revenue in known room with revenue ticket primarily as to in X% Revenue by transaction reflects hotel Workday line million, by the factors, and including define quarter by the the base. declined

revenue, TTV and driven is largely is product XX% our recurring. which XX% reminder, professional XX% model by volume, revenue and a services As transaction by by

So benefits higher from only XX% our sales prices. of revenue

were with full have EBITDA provided These lower Second, factors impact XXXX the transactions is continued incorporated in year into anticipated revenue guidance to strategy our shift a and margin, that quarter. our and we but positive to last digital adjusted yield. line

for EBITDA both XX% first technology growth operating to and of initiatives software a improvements adjusted This content, points strong including investments X% This translated key saving and EBITDA of are X%. revenue helped resulted AI. adjusted records Turning productivity expansion in operating the which we of making adjusted year-over-year of for growth the offset platforms focus are of Adjusted of quarter. our basis expense in of just million and versus Cost XXX EBITDA margin into are area growth and XX%. margin $XXX expenses, and us. leverage

to we flow capital working quarter, million flow of that generation factors previous million, free year. will in was an our the calls primarily $XXX out actions, cash This as cash is year-over-year, driven cash free first as milestone This momentum. the which increase $XX the for a quarter lowest by Finally, positive seasonally reach of achieved also timing over which well the on flow our continuing smooth discussed I've was balance generation. of

XX point leverage debt XXXX, March In proof adjusted the that this down of chart is can are our the XXXX. as Our as by for and of And significant the discipline leverage to divided very X.Xx. sheet, at a momentum range This on represents stood is March on EBITDA company. demonstrates ratio XX, step critical our we X.Xx see months a within ratio last you as net X.Xx slide, us from target this of a X.Xx. balance

of XXX rolls resulting expense. option noncore As July further million loan. in interest our outstanding will triggered mentioned savings. ratio of leverage basis we full $XX basis earnings during a expense the interest approximately reductions and annual the our points our have rate of refinance and our QX total, call, XXXX, reduction QX our interest off XXXX, opportunity XX grew points, debt to in in have we year as our in term since reduction reduce In And

powerful earnings the you how for positions to call, last attention our model to us of like with financial I'd the industry-leading all turn our of and our year. balance we it returns. shared Now On

expect GDP our for several consistently customer has premium we as it to base decades above pandemic. grow travel prior the done from First, demand business to

by proposition. to ahead market continue the differentiated grow our value to expect gains we driving of with Second, share

Third is margin expansion.

We focused expansion. structure a and on cost are disciplined margin laser

talked is CWT Our the of an can XX% capital XX% reached in M&A in accelerate strong adjusted to moment The business, opportunities. can we've is growth you've our Fourth, operating We've forecasted powerful finally, acquisition pivotal the business. about the we before XXXX. drive have fund how positive in incremental to presents cash our already free leverage EBITDA to further deployment. flow where create. opportunity And seen a pending performance we example incremental value our of shared growth

second guidance. And impact Please does so to of in incorporate year. not the expect CWT, half we close full which the let's XXXX the year guidance our turn note, of to

revenue We to billion, X% growth our year which $X.X are $X.XX for full of billion X%. guidance represents reiterating to of

percentage wins X On year to X contribute additional to top XXXX. sales same-store expect this, growth. full We revenue in X for to expect approximately percentage of we net points contribute of points growth new

the in shape workdays year the due of accelerate on growth new our to to impact. positive rolling of second and revenue this expect We half timing wins

revenue the the driving XX%.And revenue leverage year expansion software And and to on expansion, to to XX% reflects in to very from is revenue X% with additionally to which strong some be are carryover guidance X% note expected the X% XXXX expense it's We discussed, marketing XX% of sales our continued our in investments similar yield margin and our driving engine, In EBITDA EBITDA to on as expect revenue important net last growth benefit yield focused to benefits of range XXX growth XX% QX $XXX XXXX incremental productivity cost and across margin in transformation year our of basis initiatives yield future QX. platforms to the focus drive points lowest with the we we margin significant of XXXX, AI. to from so shape million in that realize XXX enterprise. operating a and a significant to our of full This growth reach $XXX of margin will adjusted and of and particularly scaled our million. this X% of adjusted will to growth, highest expansion in

continued We line adjusted over to than compared is and year, with expect driving This half largely in due we similar of QX year to timing to EBITDA expansion. QX. savings regards QX productivity second the margin in EBITDA levels in are adjusted QX. this we cost to be of last of with seasonality expect the different momentum and And

in costs, growth, Finally, integration or is double strong of in as our factors we will benefit QX conversion XXXX to with flow. year step-up we have and EBITDA. of in flows in This Note, that generate lower flow reduction rest the by and free the than free means cash the seasonal out free million year. XX% of This the working we deleverage we timing more driven $XXX adjusted XXXX targeting interest EBITDA agenity over last QX. offset of continued cash movements approximately expense initiatives. capital These of free from and are of expect significant working flow of adjusted different were reverse cash restructuring excess the than largely capital in the smooth cash

cash policy, a fund want to which As on CWT shareholder that a reminder, returns. be our used impact allocation integration. to capital guidance acquisition will the does is our and not of of I generation growth, the focused with and reminder include drive end cash reinvestment to

optionality accelerating longer-term addition our of In as EBITDA. a are generation flow both X.Xx XX% flow adjusted with it to cash see to to integration, cash cash acceleration to to debt net to the And X.Xx continuing return naturally us growth, adjusted inorganic gives continue EBITDA, a deleverage free range priorities of organic targeting we CWT target of deleverage, cash and XX% invest and and to shareholders. to

performance investing quarter expectations. long-term our full in share on for we With in gains, expansion, our confident focus flow remain continued and productivity, up, first line So acceleration, cash our XXXX things strong year margin guidance. to was our growth wrap with

now and can we and I please are our by Global Officer Q&A. Head who into joined of Legal line. move Eric Paul ahead is Bock, M&A. and the open Chief go Operator, So

Operator

Christiansen from Instructions]. [Operator Peter have Citi. now We

Peter Christiansen

then It's there. I'm bit good of little little a I Thank have from was explanation with GMN travel that any share there wondering SME. any helpful your showing to I versus that? follow-up. the I'm being into Karen, higher And curious, dig more on was wanted a efficiencies to if incremental bit. bit if there to some margin a travel there. you. I'm through And was yield impact on Good yield just EBITDA a job impact see. back relatively curious

Karen Williams

mean So there in you of timing. yield an the think this about QX question. perspective, I lowest as terms quarter you is QX, From no is for about the a And performance, always there's element thanks impact. the being think our highest. real QX as QX yield with

that's at driven deterioration that of being full online in terms the As yield, fixed small about year in and the really shift and we see by really, you our our the talked very you components guidance, look revenue. a to

Peter Christiansen

new And Paul, wins acquisition CWT number there. to kind I foresee of feedback clients I then, the very early billion, for we new also as had wins still temporarily pressure subsequent robust still guess, That's deal $X.X bit anticipation just if acquisition. helpful. think curious you potential a close, integration. from closing the on do being under guess of a about And you little ahead that any and

Paul Abbott

is the wins Yes. still strong. new No, I really think for pipeline

market, overall have the the trillion after scale at a $XX billion $XXX if industry. travel CWT expect programs, billion talked And acquisition, And course, managed in the $XXX opportunity the of of of continue with, look in share. is biggest to $X.X SME $X.X which We're and we for TTV that we see billion There's of of professional you If trillion. that. opportunity. certainly to and about growth, even significant within is billion sits runway gain we unmanaged.So $XXX you we'll like,

you look win-loss months first new at for our last the the ratio quarter at If the wins ending is X.X%. XX

$X.X of for new lose, business. business of dollar So we every win we

So to continue. expect we're share, we gaining and that consistently

Operator

Lee from is Bank. next Deutsche from Our Horowitz question

Lee Horowitz

you now recovery. Maybe talk volume your a sort of sustainability of forward? more volume the on say, to, the left think in an these the on strength that to a then about more much And bit evolving sort maybe since of the Can big factors Can carrying the about the about just APAC bit and for How update multinational remains overall from a do go relative And sort time source region? you're you thinking think other outpacing obviously, think of of growth you're recovery the is regions? how first covers strength. more how moving just you forward? you how of APAC give about shape growth of moving overall in perspective, seeing underlying SME a global us you the regional the

Paul Abbott

sure. Yes,

the pleased strength see So to in we're really multinational. global

I think a model customer supplier XX% have just one there's Also, revenues. revenue from under we advantages just but revenues from SME, over and the is of diversified the this have profile, between business balance we multinational. growth good of of global really our and diversified

quarter, dig that we're was and there you airlines think that strong we've think the of the the the multinational, saw in multiple I that U.S. quarter, a is up but across double-digit XX% what's deeper heard seeing and sectors. the services, growth some global pharma, helps.If really that, I we think, growth in so I professional And balance into in from energy encouraging standout utilities. in certainly also That little Technology reported was

So bets pretty to broad grow.

we terms to won't trending, in just call In out the our of how that go shared now, customers. top survey every I XXX that's the quarter

data really customers it's the of that year for And most strengthening spend the overall expecting the So of multinational X%. in I volume projections points. think year also a X up good global number also for recent an another a to of up in And survey point this balance showed is travel outlook. the increase

pretty that we'll segment strong certainly I full of think that So from would growth see year. for that kind indicate that

been me together. net would I rates you'd have multinational have If growth global in ask closer thought would back for would our QX, actually

a higher than so And multinational SME little expected, I than expected. was global lower

million some that point of have from has Amex is for because American and SME the on Express billion data relationships growth businesses the volumes $XXX we call. referenced rates. nearly I mentioned U.S. payment in U.S. with I for the small the Amex best reasons businesses of I think really data SME X the

And at X%. SME external data to robust point results U.S. at look QX, was for the really a it's volume payment look So our if you market. up

the at look the spend that's you actually they're QX, sales for If same-store X%, down and number.

price includes that inflation. So

leading prices. Alex that. with there is higher what of sustained I And payment seeing to would that of lower higher side impact what So is that And well I is transactions inflation, on higher think from spend do more is SME controls been the have we're as than seeing sort businesses. think sustained

part think outlook we macro-driven, confidence SME In change, expect that to question second certainly being improves terms will improve, still clearer. inflation I long to we how of that the think see We and I a becomes do as after the your the the for be medium to company. conditions do of around little as evolve, macroeconomic easing growth expect term that

APAC. on the Sorry, second question part of your

I think you recovery a question. issue in mentioned that really your not that it's

Just another out we think think grow of APAC at growth in region factors our really strong a recovery as to you certainly is really continue by structurally, any I trend seeing particular. We're will and and that faster. key Asia markets -- see that in this India stage. And I not driven longer-term

Operator

Instructions]. [Operator

from Our next . Pfennigwerth is question Duane from Evercore

Duane Pfennigwerth

there drivers on? of this a kind kind and majority Do SME? it's incremental eye you ahead. the cutoff keeping open of industries opportunity Can go we just and about now. Please really us is any in do What an as certainly highly it's large unmanaged, SME? fragmented, very for you're define how you interested And but appreciate this SME are remind is you but classified you, be of appreciate is to that commentary. particular the Just vast wondering

Paul Abbott

we Yes, SME dedicated for have structured, a definition, division to the of -- have that actually we our SME kind way customers. is we're

it kind represents much essentially billion our to looking we TTV. there a let's are that that the are directionally, a needs so be some the And rather try customers driven But exceptions And about in but the that business. on smaller. But to say, volume good of than part purely $XX that's it's $XX of we driven. those guide. as But of, of at majority that are in spending are our million customers speaking, travel, box report less broadly

the definition that's So question.

to industries, broad that it's really I is pick so think SME difficult out industry. a terms of In based specific

you are see the are SME larger within and results companies the a in in a kind SME, performance, kind of Global actually, little softer you I they of stronger what into at think as we when is go the look smaller down the companies. Moltinational, mirror

trend say and domestic The look seeing. earlier price made perhaps in that's the lending versus that you controls I airline quarter to the about that And general were the higher inflation spending. connect that tighter the I and all that So does we're costs business, I back would think comments the smaller of XX% for at if mind it's ticket in XX.X%. inflation. mean prices U.S., And year-over-year, example, keep to X% first have our for up, average the was I but up we price

So that some in SME price to pretty there think spending is those been you has that significant of inflation some segment. I contributing the do controls see

Duane Pfennigwerth

That's great. And then just there. a follow-up

the we're to back think handy, that interested sorry put corporate transaction it be any same And how the I the you length up compare that geography? may insight know but something Do you or just transaction to I starts you spot, close-in volume air don't in. into to perk you as said on hotel if does have XX%. growth your have was but up. U.S. it's again, changing duration trip trip how for

Paul Abbott

Air the the on XX% globally. air Yes, were region XX% globally. air, think I an was growth. basis XX% up at we a workday-adjusted perspective, on actually And up from strongest U.S. the was

on growth sales overall air. strong very So

I was price about think related. that X/X that noticing it's worth growth yield of and

about X and So yield of of you've pricing growth growth. got points and X transaction points about

think I hotel So were that helps color sort up a little transactions, additional I the sales bit hotel know U.S. hopefully, air XX%. of on side.

in the think that's U.S. I So probably

yield of include, probably XX% to if both the like, number because pricing the those impact. So comparable you and that's

less So but sales on XX%, Air price U.S. up little XX, U.S. up inflation a you've hotel. seen hotel

domestic. X%, you at hotels back you hotel up domestic before, to air is before, XX% as as mentioned XXXX, mentioned If go on up And daily XX%. up look per year-over-year, for up U.S. if they're I I rates average X% where, is at

Operator

next question Stanley. Toni Kaplan from Morgan is from Our

Toni Kaplan

I SME. driven mentioned on by another know factors. you I is the to macro ask really wanted follow-up slowdown

sure factors, Just wondering maybe what in maybe the some to I'm could has of happened of times strategies you of number or mitigate past. sales the the macro initiatives that that a this are deploy some

that understand if can some slowdown. And so just wanting anything macro mitigate the to there's of help

Paul Abbott

a Good environment can in mean certainly, pull Yes. levers we organic Toni. there is slower. I question, that are Absolutely. an number of where

focused and us the the The organization, sure retention and the our lever down to making is certainly been really final an of improve and sure making we've working SME payment in the those investments business. unfortunately, both lot payment for your that call in management doing referenced remains preferred segment. increasing And make And and been investments of working that improve taking first of sure capital existing has taking been with we focused have course, marketing I processes profitability of you Then before and in really, channels and think existing the moving the strong. profitability work Karen the advantage A existing base. to segment, that's opportunities expansion the marketing very case. what sales doubling And we our channels, that customers onto is, have SME the that customers, then been share being the then always our work wallet those we're on lever obviously, there capital. to on from is sales is improve making important growing the across that pull.And of we're in relationships that actions we sales options that

a to lever to be important just in levers addition so focus obviously needs And that there's that I growth mentioned. an profitability the

Toni Kaplan

the quarter saw seasonality talking ask you of versus wanted see not, in in job Terrific. just And about good to wanted I just thought for April Any first that sort the maybe you -- really in divergence year. I but April. about trends to a did

there's if but wanted see to So maybe in versus reverse just XQ? the of this is duplicative that, improvement any or April

Paul Abbott

Yes.

year. to as I year as into March point you Easter at difficult say this because know, to last opposed think April fell this March,

a additional the talked of dasein work some we this creates adjustment April QX. noise. little have year versus bit also that So And we about for

full I But trends going guidance to year in and adjusted quarter. said, that in what workday work kind on a take think at X% through honestly more we our weeks a to so are. as see few on And basis, what, came X% the to first is, X% revenues of Karen the

at selling Our be guide came was in XX We to to work XX%. XX% TTV -- to X% adjusted.

more So sort terms we year from at be track our point update want of QX on it view, And where of in you to we'll to date. guidance. of a on we're full for later obviously in be our able bang detail

Operator

Thank This call. you, for concludes today's everyone, joining.

now You lines. your disconnect may

Paul Abbott

customers for delivered. Well, across team our and you in strong they've thank our their dedication to closing, to everyone the results

that growth another confident be in of share gains, profits, We year improved are cash will XXXX flow... very strong

Global Business Travel (GBTG) 7 May 242024 Q1 Earnings call transcript