American Express Global Business Travel Reports Strong Fourth Quarter and Full-Year 2023 Financial Results; Introduces 2024 Outlook
NEW YORK--(BUSINESS WIRE)--March 05, 2024--
American Express Global Business Travel, which is operated by Global Business Travel Group, Inc. (NYSE: GBTG) (“Amex GBT” or the “Company”), a leading B2B software and services company for travel and expense, today announced financial results for the fourth quarter and full year ended December 31, 2023.
Fourth Quarter and Full-Year 2023 Highlights
-- Outstanding financial performance. Strong full-year performance above
initial guidance with 24% revenue growth and 269% Adjusted EBITDA growth
to $380 million. In Q4 2023, delivered $549 million of revenue and $80
million of Adjusted EBITDA, growing 83% or $37 million year-over-year.
-- Continued share gains. Total New Wins Value of $3.5 billion, including
$2.2 billion in SME, and 96% customer retention rate for the full year.
-- Operating leverage. 24% revenue growth versus single-digit Adjusted
Operating Expense growth for the full year. Operating leverage drove
full-year Adjusted EBITDA margin expansion of 11ppt year-over-year.
-- Positive cash flow and rapid deleveraging. Positive full-year Free Cash
Flow of $49 million and significant decline in leverage ratio to 2.3x[1],
resulting in reduced interest expense and a two-notch credit rating
upgrade from S&P Global.
Full-Year 2024 Outlook
-- Revenue outperformance. Guiding to 6-9% revenue growth driven by
expected stable growth in business travel and Amex GBT's continued share
gains.
-- Operating leverage. Margin expansion, focus on productivity and
leveraging automation and artificial intelligence (AI) expected to
deliver 18%--32% Adjusted EBITDA growth to $450--$500 million.
-- Accelerating cash flow. Strong operational performance, reduction in
interest, integration and restructuring costs and prudent working capital
management. Opportunity to refinance debt and shift capital allocation to
organic and inorganic opportunities.
Paul Abbott, Amex GBT’s Chief Executive Officer, stated: “In 2023, we delivered outstanding financial results, with revenue and Adjusted EBITDA finishing above the guidance issued at the start of the year. We expect our scalable model to generate 18% to 32% Adjusted EBITDA growth in 2024 as we settle into a more stable level of industry growth. We expect 2024 will be another year of share gains, strong growth in profits and cash flow and continued margin expansion.”
*A reconciliation of non-GAAP financial measures to the most comparable GAAP measures is provided at the end of this release.
(1) Leverage ratio is calculated as Net Debt / LTM Adjusted EBITDA and is different than leverage ratio defined in our senior secured credit agreement.
Fourth Quarter & Full-Year 2023 Financial Summary
Three Months % Increase/ % Increase/
Ended (Decrease) Year Ended (Decrease)
--------------- ----------- -----------
December 31, December 31,
--------------- ----------- ---------------- -----------
(in millions,
except
percentages;
unaudited) 2023 2022 2023 2022
--------------- ------ ------- ----------- ------- ------- -----------
Total
Transaction
Value (TTV) $6,298 $ 5,913 7 % $28,192 $22,968 23 %
--------------- ----- ------ ----------- ------ ------ -----------
Transaction
Growth 6 % 81 % 19 % 200 %
--------------- ----- ------ ----------- ------ ------ -----------
Revenue $ 549 $ 527 4 % $ 2,290 $ 1,851 24 %
--------------- ----- ------ ----------- ------ ------ -----------
Total
operating
expenses $ 546 $ 565 (4) % $ 2,298 $ 2,049 12 %
--------------- ----- ------ ----------- ------ ------ -----------
Adjusted
Operating
Expenses $ 469 $ 484 (3) % $ 1,910 $ 1,745 9 %
--------------- ----- ------ ----------- ------ ------ -----------
Net loss $ (46) $ (63) 27 % $ (136) $ (229) 41 %
--------------- ----- ------ ----------- ------ ------ -----------
Net loss
margin (8) % (12) % 4ppt (6) % (12) % 6ppt
--------------- ----- ------ ----------- ------ ------ -----------
EBITDA $ 41 $ (8) NM $ 189 $ (10) NM
--------------- ----- ------ ----------- ------ ------ -----------
Adjusted
EBITDA $ 80 $ 43 83 % $ 380 $ 103 269 %
--------------- ----- ------ ----------- ------ ------ -----------
Adjusted
EBITDA
Margin 15 % 8 % 6ppt 17 % 6 % 11ppt
--------------- ----- ------ ----------- ------ ------ -----------
Net cash
provided by
(used in)
operating
activities $ 58 $ (4) NM $ 162 $ (394) NM
--------------- ----- ------ ----------- ------ ------ -----------
Free Cash Flow $ 32 $ (25) NM $ 49 $ (488) NM
--------------- ----- ------ ----------- ------ ------ -----------
Net Debt $ 886 $ 919
--------------- ------ ------- ----------- ------ ------ -----------
Net Debt / LTM 2.3x 8.9x
Adjusted
EBITDA
--------------- ------ ------- ----------- ------- ------- -----------
NM = Not
Meaningful
Fourth Quarter 2023 Financial Highlights
(Changes compared to prior year period unless otherwise noted)
Revenue totaled $549 million, an increase of $22 million, or 4%, primarily due to growth in Total Transaction Value driven by continued growth in business travel and growth in Product & Professional Services revenue, partially offset by lower yield due to different phasing of supplier revenue in the prior year.
Total operating expenses totaled $546 million, a decrease of $19 million, or 4%, primarily due to general and administrative cost savings and lower employee incentive costs.
Adjusted Operating Expenses totaled $469 million, a decrease of $15 million, or 3%.
Net loss totaled $46 million, an improvement of $17 million, primarily due to the increase in operating income and favorable change in fair value of earnout derivative liabilities, partially offset by increased interest expense.
Adjusted EBITDA totaled $80 million, an increase of $37 million, or 83%. Revenue growth and operating leverage resulted in Adjusted EBITDA margin expansion to 15%, up 6ppt.
Net cash provided by operating activities totaled $58 million, an improvement of $62 million versus $4 million in net cash used by operating activities in the same period in 2022, primarily due to (i) decreased usage of working capital associated with the normalization in volume growth and the benefits from the Company’s working capital optimization program, particularly in relation to the integration of Egencia, and (ii) reduced net losses before considering non-cash charges, partially offset by (iii) higher cash interest.
Free Cash Flow totaled $32 million, an improvement of $57 million versus Free Cash Flow use of $25 million in the same period in 2022, due to the increase in net cash provided by operating activities, partially offset by increased use of cash for the purchase of property and equipment.
Full-Year 2023 Financial Highlights
(Changes compared to prior year period unless otherwise noted)
Revenue totaled $2,290 million, an increase of $439 million, or 24%, primarily due to growth in Total Transaction Value and growth in Product and Professional Services revenue. Revenue yield was stable at 8.1%.
Total operating expenses totaled $2,298 million, an increase of $249 million, or 12%, primarily due to higher cost of revenues to support Transaction Growth, increased investments in sales and marketing and technology and content, higher restructuring costs and increased depreciation and amortization. This was partially offset by cost savings driven by operational efficiencies and the Company’s recent internal reorganization.
Adjusted Operating Expenses totaled $1,910 million, an increase of $165 million, or 9%.
Net loss totaled $136 million, an improvement of $93 million, primarily due to the improvement in operating results, partially offset by increased interest expense and reduced benefit from income taxes.
Adjusted EBITDA totaled $380 million, an increase of $277 million, or 269%. Strong revenue growth and operating leverage resulted in Adjusted EBITDA margin expansion to 17%, up 11ppt.
Net cash provided by operating activities totaled $162 million, an improvement versus $394 million in net cash used by operating activities in 2022, primarily due to (i) decreased usage of working capital associated with the normalization in volume growth and the benefits from the Company’s working capital optimization program, particularly in relation to the integration of Egencia, and (ii) reduced net losses before considering non-cash charges, partially offset by (iii) higher cash interest and (iv) loss of benefit from cash received on termination of a derivative contract in 2022.
Free Cash Flow totaled $49 million, an improvement versus Free Cash Flow use of $488 million in 2022, due to the increase in net cash provided by operating activities, partially offset by increased use of cash for the purchase of property and equipment.