American Express Global Business Travel Reports Strong Fourth Quarter and Full-Year 2023 Financial Results; Introduces 2024 Outlook
- Outstanding financial performance in Q4 2023 with 24% revenue growth and 269% Adjusted EBITDA growth.
- Total New Wins Value of $3.5 billion and 96% customer retention rate for the full year.
- Operating leverage drove full-year Adjusted EBITDA margin expansion of 11ppt year-over-year.
- Positive cash flow of $49 million and significant deleveraging led to a credit rating upgrade.
- Full-Year 2024 outlook includes revenue growth of 6-9% and 18%-32% Adjusted EBITDA growth.
- None.
Insights
The reported 24% revenue growth and 269% Adjusted EBITDA growth for American Express Global Business Travel (Amex GBT) indicate a robust financial performance for the full year ended December 31, 2023. A significant metric to highlight is the Adjusted EBITDA margin expansion of 11 percentage points year-over-year, which reflects improved profitability and operational efficiency. This margin expansion is particularly noteworthy as it outpaces the single-digit growth in Adjusted Operating Expenses, showcasing the company's ability to scale its operations effectively.
Looking ahead, the guidance for 2024 suggests continued confidence, with an expected revenue growth of 6-9% and Adjusted EBITDA growth of 18-32%. This outlook is underpinned by stable business travel growth and anticipated gains in market share. The focus on operating leverage and the use of automation and AI to drive productivity could further enhance profitability. Additionally, the substantial decrease in the leverage ratio to 2.3x from 8.9x is a positive sign, potentially reducing the cost of capital and improving the company's creditworthiness as evidenced by the credit rating upgrade from S&P Global.
The travel and expense sector, in which Amex GBT operates, is heavily influenced by macroeconomic factors such as corporate travel budgets and economic cycles. The Total Transaction Value (TTV) growth of 23% year-over-year suggests a rebound in business travel, a segment that was significantly affected by the pandemic. The 96% customer retention rate is indicative of strong customer loyalty and service quality, which can be a critical differentiator in the competitive B2B travel services market.
Amex GBT's New Wins Value of $3.5 billion is a testament to the company's effectiveness in acquiring new business, particularly in the SME segment. This could reflect a strategic pivot or market demand shift that favors Amex GBT's offerings. The emphasis on organic and inorganic investment opportunities as part of their capital allocation strategy signals potential for future growth through strategic acquisitions or partnerships that could further solidify their market position.
The rapid deleveraging observed with Amex GBT's reduction in net debt and the improved leverage ratio is a significant development for debt market stakeholders. The positive full-year Free Cash Flow of $49 million and the ability to refinance debt at potentially more favorable terms could lead to an improved debt profile. Investors and analysts in the debt market would closely monitor the company's ability to maintain this trajectory, as it could impact both the pricing and demand for the company’s debt securities.
The two-notch credit rating upgrade by S&P Global is a strong endorsement of the company's financial health and could decrease borrowing costs. However, the market will be watching for the company's execution of its stated strategy to refinance debt and how this will affect the overall cost of capital and financial flexibility in the face of economic uncertainties.
Fourth Quarter and Full-Year 2023 Highlights
-
Outstanding financial performance. Strong full-year performance above initial guidance with
24% revenue growth and269% Adjusted EBITDA growth to$380 million $549 million $80 million 83% or$37 million -
Continued share gains. Total New Wins Value of
$3.5 billion $2.2 billion 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
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
*A reconciliation of non-GAAP financial measures to the most comparable GAAP measures is provided at the end of this release.
1Leverage 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
(in millions, except percentages; unaudited) |
Three Months Ended |
% Increase/ (Decrease) |
Year Ended |
% Increase/ (Decrease) |
||||||
December 31, |
December 31, |
|||||||||
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 Adjusted EBITDA |
|
|
|
2.3x |
8.9x |
|
||||
NM = Not Meaningful |
||||||||||
Fourth Quarter 2023 Financial Highlights
(Changes compared to prior year period unless otherwise noted)
Revenue totaled
Total operating expenses totaled
Adjusted Operating Expenses totaled
Net loss totaled
Adjusted EBITDA totaled
Net cash provided by operating activities totaled
Free Cash Flow totaled
Full-Year 2023 Financial Highlights
(Changes compared to prior year period unless otherwise noted)
Revenue totaled
Total operating expenses totaled
Adjusted Operating Expenses totaled
Net loss totaled
Adjusted EBITDA totaled
Net cash provided by operating activities totaled
Free Cash Flow totaled
Net Debt: As of December 31, 2023, total debt, net of unamortized debt discount and debt issuance cost, was
Full-Year 2024 Guidance
|
Full-Year 2024 Guidance |
Year-over-Year Growth |
Revenue |
|
+ |
Adjusted EBITDA |
|
+ |
Adjusted EBITDA Margin |
|
+ ~ 150bps – 350bps |
Free Cash Flow |
> |
|
Karen Williams, Amex GBT’s Chief Financial Officer, stated: “Our 2024 guidance demonstrates the power of our financial model to leverage stable travel demand growth to above-industry revenue growth. It also leads to even stronger Adjusted EBITDA growth thanks to our focus on operating leverage and continued margin expansion. We anticipate a significant step-up in Free Cash Flow this year, driven by Adjusted EBITDA growth, a reduction in integration and restructuring costs and lower interest expense from our declining leverage and expected refinancing of our debt. As Free Cash Flow accelerates, we have a clear capital allocation strategy that supports organic and inorganic investments for long-term, sustained growth."
Please refer to the section below titled "Reconciliation of Full-Year 2024 Adjusted EBITDA and Free Cash Flow Guidance" for a description of certain assumptions and risks associated with this guidance and reconciliation to GAAP measures.
Webcast Information
Amex GBT will host its fourth quarter and full-year 2023 investor conference call today at 9:00 a.m. E.T. The live webcast and accompanying slide presentation can be accessed on the Amex GBT Investor Relations website at investors.amexglobalbusinesstravel.com. A replay of the event will be available on the website for at least 90 days following the event.
Glossary of Terms
See the “Glossary of Terms” for the definitions of certain terms used within this press release.
Non-GAAP Financial Measures
The Company refers to certain financial measures that are not recognized under GAAP in this press release, including EBITDA, Adjusted EBITDA, Adjusted EBITDA Margin, Adjusted Operating Expenses, Free Cash Flow and Net Debt. See “Non-GAAP Financial Measures” below for an explanation of these non-GAAP financial measures and “Tabular Reconciliations for Non-GAAP Financial Measures” below for reconciliations of the non-GAAP financial measures to the comparable GAAP measures.
About American Express Global Business Travel
American Express Global Business Travel is the world’s leading B2B travel platform, providing software and services to manage travel, expenses, and meetings & events for companies of all sizes. We have built the most valuable marketplace in B2B travel to deliver unrivalled choice, value and experiences. With travel professionals in more than 140 countries, our customers and travelers enjoy the powerful backing of American Express Global Business Travel.
Visit amexglobalbusinesstravel.com for more information about Amex GBT. Follow @amexgbt on X (formerly known as Twitter), LinkedIn and Instagram.
GLOBAL BUSINESS TRAVEL GROUP, INC. CONSOLIDATED STATEMENTS OF OPERATIONS (Unaudited) |
|||||||||
|
|
Year ended December 31, |
|||||||
(in $ millions, except share and per share data) |
|
|
2023 |
|
2022 |
|
|||
Revenue |
|
$ |
2,290 |
|
$ | 1,851 |
|
||
Costs and expenses: |
|
|
|
||||||
Cost of revenue (excluding depreciation and amortization shown separately below) |
|
|
958 |
|
|
832 |
|
||
Sales and marketing |
|
|
393 |
|
|
337 |
|
||
Technology and content |
|
|
405 |
|
|
388 |
|
||
General and administrative |
|
|
306 |
|
|
313 |
|
||
Restructuring and other exit charges |
|
|
42 |
|
|
(3 |
) |
||
Depreciation and amortization |
|
|
194 |
|
|
182 |
|
||
Total operating expenses |
|
|
2,298 |
|
|
2,049 |
|
||
Operating loss |
|
|
(8 |
) |
|
(198 |
) |
||
Interest income |
|
|
1 |
|
|
— |
|||
Interest expense |
|
|
(141 |
) |
|
(98 |
) |
||
Fair value movement on earnout and warrant derivative liabilities |
|
|
13 |
|
|
8 |
|
||
Other (loss) income, net |
|
|
(10 |
) |
|
1 |
|
||
Loss before income taxes and share of losses from equity method investments |
|
|
(145 |
) |
|
(287 |
) |
||
Benefit from income taxes |
|
|
9 |
|
|
61 |
|
||
Share of losses from equity method investments |
|
|
— |
|
|
(3 |
) |
||
Net loss |
|
|
(136 |
) |
|
(229 |
) |
||
Less: net loss attributable to non-controlling interests in subsidiaries |
|
|
(73 |
) |
|
(204 |
) |
||
Net loss attributable to the Company’s Class A common stockholders |
|
$ |
(63 |
) |
$ |
(25 |
) |
||
Basic loss per share attributable to the Company’s Class A common stockholders |
|
$ |
(0.25 |
) |
$ |
(0.50 |
) |
||
Weighted average number of shares outstanding – Basic |
|
|
251,645,498 |
|
|
51,266,570 |
|
||
Diluted loss per share attributable to the Company’s Class A common stockholders |
|
$ |
(0.30 |
) |
$ |
(0.51) |
|||
Weighted average number of shares outstanding – Diluted |
|
|
458,055,525 |
|
|
|
445,715,051 |
||
GLOBAL BUSINESS TRAVEL GROUP, INC. CONSOLIDATED BALANCE SHEETS (Unaudited) |
||||||||
|
|
As of December 31, |
||||||
(in $ millions except share and per share data) |
|
2023 |
|
2022 |
||||
Assets |
|
|
|
|
||||
Current assets: |
|
|
|
|
||||
Cash and cash equivalents |
|
$ |
476 |
|
|
$ |
303 |
|
Accounts receivable (net of allowance for credit losses of |
|
|
726 |
|
|
|
765 |
|
Due from affiliates |
|
|
42 |
|
|
|
36 |
|
Prepaid expenses and other current assets |
|
|
116 |
|
|
|
130 |
|
Total current assets |
|
|
1,360 |
|
|
|
1,234 |
|
Property and equipment, net |
|
|
232 |
|
|
|
218 |
|
Equity method investments |
|
|
14 |
|
|
|
14 |
|
Goodwill |
|
|
1,212 |
|
|
|
1,188 |
|
Other intangible assets, net |
|
|
552 |
|
|
|
636 |
|
Operating lease right-of-use assets |
|
|
50 |
|
|
|
58 |
|
Deferred tax assets |
|
|
281 |
|
|
|
333 |
|
Other non-current assets |
|
|
50 |
|
|
|
47 |
|
Total assets |
|
$ |
3,751 |
|
|
$ |
3,728 |
|
Liabilities and shareholders’ equity |
|
|
|
|
||||
Current liabilities: |
|
|
|
|
||||
Accounts payable |
|
$ |
302 |
|
|
$ |
253 |
|
Due to affiliates |
|
|
39 |
|
|
|
48 |
|
Accrued expenses and other current liabilities |
|
|
466 |
|
|
|
452 |
|
Current portion of operating lease liabilities |
|
|
17 |
|
|
|
17 |
|
Current portion of long-term debt |
|
|
7 |
|
|
|
3 |
|
Total current liabilities |
|
|
831 |
|
|
|
773 |
|
Long-term debt, net of unamortized debt discount and debt issuance costs |
|
|
1,355 |
|
|
|
1,219 |
|
Deferred tax liabilities |
|
|
5 |
|
|
|
24 |
|
Pension liabilities |
|
|
183 |
|
|
|
147 |
|
Long-term operating lease liabilities |
|
|
55 |
|
|
|
61 |
|
Earnout derivative liabilities |
|
|
77 |
|
|
|
90 |
|
Other non-current liabilities |
|
|
33 |
|
|
|
43 |
|
Total liabilities |
|
|
2,539 |
|
|
|
2,357 |
|
Commitments and Contingencies |
|
|
|
|
||||
Shareholders’ equity: |
|
|
|
|
||||
Class A common stock (par value |
|
|
— |
|
|
|
— |
|
Class B common stock (par value |
|
|
— |
|
|
|
— |
|
Additional paid-in-capital |
|
|
2,748 |
|
|
|
334 |
|
Accumulated deficit |
|
|
(1,437 |
) |
|
|
(175 |
) |
Accumulated other comprehensive loss |
|
|
(103 |
) |
|
|
(7 |
) |
Total equity of the Company’s shareholders |
|
|
1,208 |
|
|
|
152 |
|
Equity attributable to non-controlling interest in subsidiaries |
|
|
4 |
|
|
|
1,219 |
|
Total shareholders’ equity |
|
|
1,212 |
|
|
|
1,371 |
|
Total liabilities and shareholders’ equity |
|
$ |
3,751 |
|
|
$ |
3,728 |
|
GLOBAL BUSINESS TRAVEL GROUP, INC. CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited) |
||||||||
|
|
Year ended December 31, |
||||||
(in $ millions) |
|
2023 |
|
2022 |
||||
Operating activities: |
|
|
|
|
||||
Net loss |
|
$ |
(136 |
) |
|
$ |
(229 |
) |
Adjustments to reconcile net loss to net cash from (used in) operating activities: |
|
|
|
|
||||
Depreciation and amortization |
|
|
194 |
|
|
|
182 |
|
Deferred tax benefit |
|
|
(30 |
) |
|
|
(65 |
) |
Equity-based compensation |
|
|
75 |
|
|
|
39 |
|
Allowance for credit losses |
|
|
9 |
|
|
|
19 |
|
Fair value movements on earnout and warrants derivative liabilities |
|
|
(13 |
) |
|
|
(8 |
) |
Other |
|
|
17 |
|
|
|
22 |
|
Defined benefit pension funding |
|
|
(29 |
) |
|
|
(32 |
) |
Proceeds from termination of interest rate swap derivative contract |
|
|
— |
|
|
|
23 |
|
Changes in working capital |
|
|
|
|
||||
Accounts receivable |
|
|
49 |
|
|
|
(427 |
) |
Prepaid expenses and other current assets |
|
|
9 |
|
|
|
(29 |
) |
Due from affiliates |
|
|
(4 |
) |
|
|
(18 |
) |
Due to affiliates |
|
|
(5 |
) |
|
|
7 |
|
Accounts payable, accrued expenses and other current liabilities |
|
|
26 |
|
|
|
122 |
|
Net cash from (used in) operating activities |
|
|
162 |
|
|
|
(394 |
) |
Investing activities: |
|
|
|
|
||||
Purchase of property and equipment |
|
|
(113 |
) |
|
|
(94 |
) |
Other |
|
|
(6 |
) |
|
|
(1 |
) |
Net cash used in investing activities |
|
|
(119 |
) |
|
|
(95 |
) |
Financing activities: |
|
|
|
|
||||
Proceeds from reverse recapitalization, net |
|
|
— |
|
|
|
269 |
|
Redemption of preference shares |
|
|
— |
|
|
|
(168 |
) |
Proceeds from senior secured term loans, net of debt discount |
|
|
131 |
|
|
|
200 |
|
Repayment of senior secured term loans |
|
|
(3 |
) |
|
|
(3 |
) |
Repayment of finance lease obligations |
|
|
(2 |
) |
|
|
(2 |
) |
Payment of lender fees and issuance costs for senior secured term loans facilities |
|
|
(2 |
) |
|
|
— |
|
Payment of deferred consideration |
|
|
— |
|
|
|
(4 |
) |
Contributions for ESPP and proceeds from exercise of stock options |
|
|
7 |
|
|
|
— |
|
Payment of taxes withheld on vesting of equity awards |
|
|
(14 |
) |
|
|
— |
|
Other |
|
|
3 |
|
|
|
— |
|
Net cash from financing activities |
|
|
120 |
|
|
|
292 |
|
Effect of exchange rates changes on cash, cash equivalents and restricted cash |
|
|
10 |
|
|
|
(12 |
) |
Net increase (decrease) in cash, cash equivalents and restricted cash |
|
|
173 |
|
|
|
(209 |
) |
Cash, cash equivalents and restricted cash, beginning of year |
|
|
316 |
|
|
|
525 |
|
Cash, cash equivalents and restricted cash, end of year |
|
$ |
489 |
|
|
$ |
316 |
|
Supplemental cash flow information: |
|
|
|
|
||||
Cash refund for income taxes (net of payments) |
|
$ |
2 |
|
|
$ |
(1 |
) |
Cash paid for interest (net of interest received) |
|
$ |
142 |
|
|
$ |
96 |
|
Non-cash additions for finance lease |
|
$ |
4 |
|
|
$ |
— |
|
Issuance of shares to settle liability |
|
$ |
4 |
|
|
$ |
— |
|
Glossary of Terms
B2B refers to business-to-business.
Customer retention rate is calculated based on Total Transaction Value (TTV).
LTM refers to the last twelve months.
SME refers to clients Amex GBT considers small-to-medium-sized enterprises (“SME”), which Amex GBT generally defines as having an expected annual spend on air travel of less than
SME New Wins Value is calculated using expected annual average TTV from new SME client wins over the last twelve months.
Total New Wins Value is calculated using expected annual average TTV from all new client wins over the last twelve months.
Total Transaction Value or TTV refers to the sum of the total price paid by travelers for air, hotel, rail, car rental and cruise bookings, including taxes and other charges applied by suppliers at point of sale, less cancellations and refunds.
Yield is calculated as total revenue divided by TTV for the same period.
Non-GAAP Financial Measures
We report our financial results in accordance with GAAP. Our non-GAAP financial measures are provided in addition to, and should not be considered as an alternative to, other performance or liquidity measures derived in accordance with GAAP. Non-GAAP financial measures have limitations as analytical tools, and you should not consider them either in isolation or as a substitute for analyzing our results as reported under GAAP. In addition, because not all companies use identical calculations, the presentations of our non-GAAP financial measures may not be comparable to similarly titled measures of other companies and can differ significantly from company to company.
Management believes that these non-GAAP financial measures provide users of our financial information with useful supplemental information that enables a better comparison of our performance or liquidity across periods. We use EBITDA, Adjusted EBITDA, Adjusted EBITDA Margin and Adjusted Operating Expenses as performance measures as they are important metrics used by management to evaluate and understand the underlying operations and business trends, forecast future results and determine future capital investment allocations. We use Free Cash Flow and Net Debt as liquidity measures and as indicators of our ability to generate cash to meet our liquidity needs and to assist our management in evaluating our financial flexibility, capital structure and leverage. These non-GAAP financial measures supplement comparable GAAP measures in the evaluation of the effectiveness of our business strategies, to make budgeting decisions, and/or to compare our performance and liquidity against that of other peer companies using similar measures.
We define EBITDA as net income (loss) before interest income, interest expense, gain (loss) on early extinguishment of debt, benefit from (provision for) income taxes and depreciation and amortization.
We define Adjusted EBITDA as net income (loss) before interest income, interest expense, gain (loss) on early extinguishment of debt, benefit from (provision for) income taxes and depreciation and amortization and as further adjusted to exclude costs that management believes are non-core to the underlying business of the Company, consisting of restructuring, exit and related charges, integration costs, costs related to mergers and acquisitions, non-cash equity-based compensation, fair value movements on earnout and warrant derivative liabilities, long-term incentive plan costs, certain corporate costs, foreign currency gains (losses), non-service components of net periodic pension benefit (costs) and gains (losses) on disposal of businesses.
We define Adjusted EBITDA Margin as Adjusted EBITDA divided by revenue.
We define Adjusted Operating Expenses as total operating expenses excluding depreciation and amortization and costs that management believes are non-core to the underlying business of the Company, consisting of restructuring, exit and related charges, integration costs, costs related to mergers and acquisitions, non-cash equity-based compensation, long-term incentive plan costs and certain corporate costs.
EBITDA, Adjusted EBITDA, Adjusted EBITDA Margin and Adjusted Operating Expenses are supplemental non-GAAP financial measures of operating performance that do not represent and should not be considered as alternatives to net income (loss) or total operating expenses, as determined under GAAP. In addition, these measures may not be comparable to similarly titled measures used by other companies. These non-GAAP measures have limitations as analytical tools, and these measures should not be considered in isolation or as a substitute for analysis of the Company’s results or expenses as reported under GAAP. Some of these limitations are that these measures do not reflect:
- changes in, or cash requirements for, our working capital needs or contractual commitments;
- our interest expense, or the cash requirements to service interest or principal payments on our indebtedness;
- our tax expense, or the cash requirements to pay our taxes;
- recurring, non-cash expenses of depreciation and amortization of property and equipment and definite-lived intangible assets and, although these are non-cash expenses, the assets being depreciated and amortized may have to be replaced in the future;
- the non-cash expense of stock-based compensation, which has been, and will continue to be for the foreseeable future, an important part of how we attract and retain our employees and a significant recurring expense in our business;
- restructuring, mergers and acquisition and integration costs, all of which are intrinsic of our acquisitive business model; and
- impact on earnings or changes resulting from matters that are non-core to our underlying business, as we believe they are not indicative of our underlying operations.
EBITDA, Adjusted EBITDA, Adjusted EBITDA Margin and Adjusted Operating Expenses should not be considered as measures of liquidity or as measures determining discretionary cash available to us to reinvest in the growth of our business or as measures of cash that will be available to us to meet our obligations. We believe that the adjustments applied in presenting EBITDA, Adjusted EBITDA, Adjusted EBITDA Margin and Adjusted Operating Expenses are appropriate to provide additional information to investors about certain material non-cash and other items that management believes are non-core to our underlying business.
We use these measures as performance measures as they are important metrics used by management to evaluate and understand the underlying operations and business trends, forecast future results and determine future capital investment allocations. These non-GAAP measures supplement comparable GAAP measures in the evaluation of the effectiveness of our business strategies, to make budgeting decisions, and to compare our performance against that of other peer companies using similar measures. We also believe that EBITDA, Adjusted EBITDA, Adjusted EBITDA Margin and Adjusted Operating Expenses are helpful supplemental measures to assist potential investors and analysts in evaluating our operating results across reporting periods on a consistent basis.
We define Free Cash Flow as net cash from (used in) operating activities, less cash used for additions to property and equipment.
We believe Free Cash Flow is an important measure of our liquidity. This measure is a useful indicator of our ability to generate cash to meet our liquidity demands. We use this measure to conduct and evaluate our operating liquidity. We believe it typically presents an alternate measure of cash flows since purchases of property and equipment are a necessary component of our ongoing operations and it provides useful information regarding how cash provided by operating activities compares to the property and equipment investments required to maintain and grow our platform. We believe Free Cash Flow provides investors with an understanding of how assets are performing and measures management’s effectiveness in managing cash.
Free Cash Flow is a non-GAAP measure and may not be comparable to similarly named measures used by other companies. This measure has limitations in that it does not represent the total increase or decrease in the cash balance for the period, nor does it represent cash flow for discretionary expenditures. This measure should not be considered as a measure of liquidity or cash flows from operations as determined under GAAP. This measure is not a measurement of our financial performance under GAAP and should not be considered in isolation or as an alternative to net income (loss) or any other performance measures derived in accordance with GAAP or as an alternative to cash flows from operating activities as a measure of liquidity.
We define Net Debt as total debt outstanding consisting of current and non-current portion of long-term debt, net of unamortized debt discount and unamortized debt issuance costs, minus cash and cash equivalents.
Net Debt is a non-GAAP measure and may not be comparable to similarly named measures used by other companies. This measure is not a measurement of our indebtedness as determined under GAAP and should not be considered in isolation or as an alternative to assess our total debt or any other measures derived in accordance with GAAP or as an alternative to total debt. Management uses Net Debt to review our overall liquidity, financial flexibility, capital structure and leverage. Further, we believe that certain debt rating agencies, creditors and credit analysts monitor our Net Debt as part of their assessment of our business.
Tabular Reconciliations for Non-GAAP Measures
Reconciliation of net loss to EBITDA and Adjusted EBITDA:
|
|
Three Months Ended December 31, |
|
Year Ended December 31, |
||||||||||||
(in $ millions) |
|
2023 |
|
2022 |
|
2023 |
|
2022 |
||||||||
Net loss |
|
$ |
(46 |
) |
|
$ |
(63 |
) |
|
$ |
(136 |
) |
|
$ |
(229 |
) |
Interest income |
|
|
(1 |
) |
|
|
— |
|
|
|
(1 |
) |
|
|
— |
|
Interest expense |
|
|
36 |
|
|
|
29 |
|
|
|
141 |
|
|
|
98 |
|
Benefit from income taxes |
|
|
3 |
|
|
|
(22 |
) |
|
|
(9 |
) |
|
|
(61 |
) |
Depreciation and amortization |
|
|
49 |
|
|
|
48 |
|
|
|
194 |
|
|
|
182 |
|
EBITDA |
|
|
41 |
|
|
|
(8 |
) |
|
|
189 |
|
|
|
(10 |
) |
Restructuring, exit and related charges(a) |
|
|
— |
|
|
|
2 |
|
|
|
49 |
|
|
|
(3 |
) |
Integration costs(b) |
|
|
7 |
|
|
|
9 |
|
|
|
35 |
|
|
|
34 |
|
Mergers and acquisitions(c) |
|
|
1 |
|
|
|
(3 |
) |
|
|
2 |
|
|
|
18 |
|
Equity-based compensation(d) |
|
|
15 |
|
|
|
16 |
|
|
|
75 |
|
|
|
39 |
|
Fair value movements on earnout and warrant derivative liabilities(e) |
|
|
10 |
|
|
|
22 |
|
|
|
(13 |
) |
|
|
(8 |
) |
Other adjustments, net(f) |
|
|
6 |
|
|
|
5 |
|
|
|
43 |
|
|
|
33 |
|
Adjusted EBITDA |
|
$ |
80 |
|
|
$ |
43 |
|
|
$ |
380 |
|
|
$ |
103 |
|
Net loss Margin |
|
|
(8 |
|
|
|
(12 |
) % |
|
|
(6 |
|
|
|
(12 |
) % |
Adjusted EBITDA Margin |
|
|
15 |
% |
|
|
8 |
% |
|
|
17 |
% |
|
|
6 |
% |
Reconciliation of total operating expenses to Adjusted Operating Expenses:
|
|
Three Months Ended December 31, |
|
Year Ended December 31, |
||||||||||||
(in $ millions) |
|
|
2023 |
|
|
|
2022 |
|
|
|
2023 |
|
|
|
2022 |
|
Total operating expenses |
|
$ |
546 |
|
|
$ |
565 |
|
|
$ |
2,298 |
|
|
$ |
2,049 |
|
Adjustments: |
|
|
|
|
|
|
|
|
||||||||
Depreciation and amortization |
|
|
(49 |
) |
|
|
(48 |
) |
|
|
(194 |
) |
|
|
(182 |
) |
Restructuring, exit and related charges(a) |
|
|
— |
|
|
|
(2 |
) |
|
|
(49 |
) |
|
|
3 |
|
Integration costs(b) |
|
|
(7 |
) |
|
|
(9 |
) |
|
|
(35 |
) |
|
|
(34 |
) |
Mergers and acquisition(c) |
|
|
(1 |
) |
|
|
3 |
|
|
|
(2 |
) |
|
|
(18 |
) |
Equity-based compensation(d) |
|
|
(15 |
) |
|
|
(16 |
) |
|
|
(75 |
) |
|
|
(39 |
) |
Other adjustments, net(f) |
|
|
(5 |
) |
|
|
(9 |
) |
|
|
(33 |
) |
|
|
(34 |
) |
Adjusted Operating Expenses |
|
$ |
469 |
|
|
$ |
484 |
|
|
$ |
1,910 |
|
|
$ |
1,745 |
|
a) |
Includes (i) employee severance costs/(reversals) of |
b) |
Represents expenses related to the integration of businesses acquired. |
c) |
Represents expenses related to business acquisitions, including potential business acquisitions, and includes pre-acquisition due diligence and related activities costs. The full year 2022 includes a charge of |
d) |
Represents non-cash equity-based compensation expense related to equity incentive awards to certain employees. |
e) |
Represents fair value movements on earnout and warrant derivative liabilities during the periods. |
f) |
Adjusted Operating Expenses excludes (i) long-term incentive plan expense of |
Reconciliation of net cash from (used in) operating activities to Free Cash Flow:
|
|
Three Months Ended December 31, |
|
Year Ended December 31, |
||||||||||||
(in $ millions) |
|
2023 |
|
2022 |
|
2023 |
|
2022 |
||||||||
|
|
|
|
|
|
|
|
|
||||||||
Net cash from (used in) operating activities |
|
$ |
58 |
|
|
$ |
(4 |
) |
|
$ |
162 |
|
|
$ |
(394 |
) |
Less: Purchase of property and equipment |
|
|
(26 |
) |
|
|
(21 |
) |
|
|
(113 |
) |
|
|
(94 |
) |
Free Cash Flow |
|
$ |
32 |
|
|
$ |
(25 |
) |
|
$ |
49 |
|
|
$ |
(488 |
) |
Reconciliation of Net Debt:
|
|
As of December 31, |
||||||
(in $ millions) |
|
2023 |
|
2022 |
||||
Current portion of long-term debt |
|
$ |
7 |
|
|
$ |
3 |
|
Long-term debt, net of unamortized debt discount and debt issuance costs |
|
|
1,355 |
|
|
|
1,219 |
|
Total debt, net of unamortized debt discount and debt issuance costs |
|
|
1,362 |
|
|
|
1,222 |
|
Less: Cash and cash equivalents |
|
|
(476 |
) |
|
|
(303 |
) |
Net Debt |
|
$ |
886 |
|
|
$ |
919 |
|
|
|
|
|
|
||||
LTM Adjusted EBITDA |
|
$ |
380 |
|
|
$ |
103 |
|
Net Debt / LTM Adjusted EBITDA |
|
2.3x |
|
8.9x |
||||
Reconciliation of Full-Year 2024 Adjusted EBITDA and Free Cash Flow Guidance
The Company’s full-year 2024 guidance considers various material assumptions. Because the guidance is forward-looking and reflects numerous estimates and assumptions with respect to future industry performance under various scenarios as well as assumptions for competition, general business, economic, market and financial conditions and matters specific to the business of Amex GBT, all of which are difficult to predict and many of which are beyond the control of Amex GBT, actual results may differ materially from the guidance due to a number of factors, including the ultimate inaccuracy of any of the assumptions described above and the risks and other factors discussed in the section entitled “Forward-Looking Statements” below and the risk factors in the Company’s SEC filings.
Adjusted EBITDA guidance for the year ending December 31, 2024 consists of expected net income (loss) for the year ending December 31, 2024, adjusted for: (i) interest expense of approximately
Free Cash Flow guidance for the year ending December 31, 2024 consists of expected net cash from operating activities of greater than
Forward-Looking Statements
This communication contains statements that are forward-looking and as such are not historical facts. This includes, without limitation, statements regarding our financial position, business strategy, and the plans and objectives of management for future operations and full-year guidance. These statements constitute projections, forecasts and forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. The words “anticipate,” “believe,” “continue,” “could,” “estimate,” “expect,” “intend,” “may,” “might,” “plan,” “possible,” “potential,” “predict,” “project,” “should,” “will,” “would” and similar expressions may identify forward-looking statements, but the absence of these words does not mean that a statement is not forward-looking.
The forward-looking statements contained in this communication are based on our current expectations and beliefs concerning future developments and their potential effects on us. There can be no assurance that future developments affecting us will be those that we have anticipated. These forward-looking statements involve a number of risks, uncertainties (some of which are beyond our control) or other assumptions that may cause actual results or performance to be materially different from those expressed or implied by these forward-looking statements. These risks and uncertainties include, but are not limited to, the following risks, uncertainties and other factors: (1) changes to projected financial information or our ability to achieve our anticipated growth rate and execute on industry opportunities; (2) our ability to maintain our existing relationships with customers and suppliers and to compete with existing and new competitors; (3) various conflicts of interest that could arise among us, affiliates and investors; (4) our success in retaining or recruiting, or changes required in, our officers, key employees or directors; (5) factors relating to our business, operations and financial performance, including market conditions and global and economic factors beyond our control; (6) the impact of geopolitical conflicts, including the war in
Disclaimer
An investment in Global Business Travel Group, Inc. is not an investment in American Express. American Express shall not be responsible in any manner whatsoever for, and in respect of, the statements herein, all of which are made solely by Global Business Travel Group, Inc.
*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.
View source version on businesswire.com: https://www.businesswire.com/news/home/20240305543510/en/
Media:
Martin Ferguson
Vice President Global Communications and Public Affairs
martin.ferguson@amexgbt.com
Investors:
Jennifer Thorington
Director Investor Relations
investor@amexgbt.com
Source: Global Business Travel Group, Inc.
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