American Express Global Business Travel Reports Strong Q3 2023 Revenue Growth and Positive Year-to-Date Cash Generation

NEW YORK–(BUSINESS WIRE)–American Express Global Business Travel, which is operated by Global Business Travel Group, Inc. (NYSE: GBTG) (“Amex GBT” or the “Company”), the world’s leading B2B travel platform, today announced financial results for the third quarter ended September 30, 2023.

Third Quarter 2023 Highlights

Delivered Outstanding Q3 Results

• Strong revenue and Adjusted EBITDA¹ growth of 17% and 135%, respectively, versus Q3 2022.
• Cash provided by operating activities totaled $135 million and Free Cash Flow² totaled $107 million in the quarter. Free Cash Flow² positive on a year-to-date basis, ahead of expectations.
• Lowered leverage ratio to 2.7x, resulting in reduced interest rates beginning in Q4 2023.³
• Reiterating full-year 2023 revenue and Adjusted EBITDA guidance ranges.
• Now expect positive Free Cash Flow² for full-year 2023, ahead of previous expectations.

Continued Share Gains

• LTM Total New Wins Value⁴ totaled $3.3 billion per annum.
• 95% LTM customer retention rate.
• Total transactions grew 9% versus Q3 2022⁵.
• 77% of transactions through digital channels, contributing to cost savings.

Winning in SME

• LTM SME New Wins Value⁴ totaled $2.2 billion per annum.
• Approximately 30% of LTM SME New Wins Value⁴ from the unmanaged category.
• SME transactions grew 10% versus Q3 2022⁵.

Significant Margin Expansion

• Total operating expenses and Adjusted Operating Expenses⁶ increased 8% and 7%, respectively, versus Q3 2022, compared to 17% revenue growth.
• Adjusted EBITDA margin⁷ up 9ppt and net loss margin improvement of 14ppt versus Q3 2022.

Paul Abbott, Amex GBT’s Chief Executive Officer, stated: “In the third quarter, we again delivered outstanding financial results with revenue growth of 17%, significant margin expansion and positive year-to-date Free Cash Flow. We remain highly focused on continuing to drive further margin expansion through our ongoing cost savings initiatives and Egencia synergies. This, combined with continued share gains and record SME new wins, gives us the confidence to reiterate our full-year 2023 revenue and Adjusted EBITDA guidance and increase our expectation for full-year 2023 Free Cash Flow.”

Third Quarter 2023 Financial Summary

Third Quarter 2023 Financial Highlights

Revenue of $571 million increased $83 million, or 17%, versus the same period in 2022. Within this, Travel Revenue increased $68 million, or 17%, primarily due to growth in Total Transaction Value driven by continued growth in business travel and an improvement in yield driven by stronger international mix as recovery momentum has continued and the Company’s focus on revenue optimization. Product and Professional Services Revenue increased $15 million, or 16%, primarily due to increased management fees and meetings and events revenue driven by strengthened demand.

Total operating expenses of $575 million increased $42 million, or 8%, versus the same period in 2022, primarily due to Transaction Growth, increased investments in sales and marketing and higher restructuring costs. This was partially offset by cost savings driven by operational efficiencies and the Company’s recent internal reorganization.

Net loss of $8 million improved $65 million versus the same period in 2022, primarily due to the increase in operating income and positive fair value movements on earnout and warrant derivative liabilities, partially offset by increased interest expense.

Adjusted EBITDA¹ of $95 million increased $54 million, or 135%, versus the same period in 2022. Strong revenue growth and focus on cost savings resulted in Adjusted EBITDA margin of 17%, up 9ppt versus the same period in 2022.

Adjusted Operating Expenses⁶ of $476 million increased $30 million, or 7%, versus the same period in 2022, primarily due to Transaction Growth and increased investments in sales and marketing. This was partially offset by cost savings driven by operational efficiencies and the Company’s recent internal reorganization.

Net cash provided by (used in) operating activities totaled $135 million, an improvement of $216 million versus 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 Egencia integration, and (ii) reduced net losses before considering non-cash charges, partially offset by (iii) higher cash interest.

Free Cash Flow² totaled $107 million, an improvement of $219 million versus 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.

Net Debt⁹: As of September 30, 2023, total debt, net of unamortized debt discount and debt issuance cost was $1,359 million, compared to $1,222 million as of December 31, 2022. Net Debt was $927 million as of September 30, 2023, compared to Net Debt of $919 million as of December 31, 2022. Leverage ratio was 2.7x as of September 30, 2023³. As of September 30, 2023, ending cash balance was $432 million, compared to $303 million as of December 31, 2022.

Full-Year 2023 Guidance

Karen Williams, Amex GBT’s Chief Financial Officer, stated: “In the third quarter, we delivered strong revenue and margin performance. Our Adjusted EBITDA growth and the solid execution of our Egencia working capital optimization program resulted in significant quarterly Free Cash Flow generation, driving positive Free Cash Flow on a year-to-date basis. For the full year, we now expect to be at the higher end of our revenue guidance range and closer to the midpoint of our Adjusted EBITDA guidance range given investments we are making in the business. Importantly, we now expect to deliver positive Free Cash Flow for full-year 2023, ahead of previous expectations.”

Please refer to the section below titled “Reconciliation of Q4 2023 & Full-Year 2023 Adjusted EBITDA Guidance” for a description of certain assumptions and risks associated with this guidance and reconciliation to GAAP.

Webcast Information

Amex GBT will host its third quarter 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 Twitter, LinkedIn and Instagram.

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 $20 million. This criterion can vary by country and client needs.

SME New Wins Value is calculated using expected annual average Total Transaction Value (TTV) over the contract term from new SME client wins over the last twelve months.

Total New Wins Value is calculated using expected annual average Total Transaction Value (TTV) over the contract term 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 Total Transaction Value (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 costs (including charges resulting from facilities consolidation), integration costs, costs related to mergers and acquisitions, non-cash equity-based compensation, long-term incentive plan costs, certain corporate costs, fair value movements on earnout derivative liabilities, 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 costs (including charges resulting from facilities consolidation), 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.

Contacts

Media:

Martin Ferguson

Vice President Global Communications and Public Affairs

[email protected]

Investors:

Barry Sievert

Vice President Investor Relations

[email protected]

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