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American Express Global Business Travel Reports Q2 2022 Financial Results and Raises Full-Year Guidance

08/11/2022

Global Business Travel Group, Inc. (NYSE: GBTG) (“American Express Global Business Travel”, “Amex GBT” or the “Company”), the world’s leading B2B travel platform, today announced financial results for the quarter ended June 30, 2022.

Q2 2022 Highlights

Strong Revenue and Earnings Trends

  • Revenue increased 217% to $486 million and net loss totaled ($2) million.
  • Reported positive Adjusted EBITDA1 totaling $47 million.
  • Transaction recovery versus pro forma2 2019 was 69% and revenue recovery versus pro forma2 2019 was 64%.
  • Raised full-year 2022 revenue guidance to a range of $1.8 billion to $1.85 billion and full-year Adjusted EBITDA guidance to a range of $90 million to $100 million.

Travel Recovery Has Strong Momentum

  • Transaction recovery improved 22 percentage points quarter-over-quarter from Q1 2022 to Q2 2022.
  • Transaction recovery improved 14 percentage points from March 2022 to reach 76% of 2019 pro forma2 levels in June 2022.
  • Continued strong demand, despite supply constraints and macroeconomic conditions.

A Significant Runway for Growth

  • Customer recognition of the value Amex GBT delivers only increases in a period of greater travel complexity.
  • Pro forma New Wins Value over the last 12 months through the end of July 2022 increased to $4.2 billion, which represents 11% of 2019 pro forma2 TTV for the same period.
  • SME transaction recovery in the month of June 2022 reached 84% of 2019 pro forma2 levels, driven by stronger recovery and new wins momentum.
  • Major new wins include a top 5 Global Financial Services Company3.
  • Customer retention rate over the last 12 months through the end of July 2022 remained stable at 95%.

On Track to Deliver Egencia Synergies & Cost Savings

  • Two levers for significant margin expansion: $109 million in total Egencia synergies and $235 million of permanent cost savings.
  • Remain on track to exceed the $25 million of Egencia synergies expected in full year 2022.
  • Achieved 65% of run-rate Egencia synergies, based on 100% recovery levels.
  • 100% of $235 million cost savings have been actioned, over 80% realized with balance expected to be realized as volumes continue to recover.

Paul Abbott, Amex GBT Chief Executive Officer, stated: “Listing as a public company in the second quarter was a significant milestone and marked the beginning of the next phase of growth for Amex GBT. Business travel transactions continued to recover in the quarter, reaching 76% of 2019 pro forma levels in June, and we reported positive Adjusted EBITDA. Over the past twelve months, we’ve signed $4.2 billion of new wins value and maintained very high customer retention. Our strong first half of 2022 and continued share gains give us the confidence to raise our full-year 2022 guidance once again.”

Second Quarter 2022 Financial Summary

(in millions, except percentages; unaudited)

Three Months Ended 

%
B/(W) 

June 30,

2022

2021

Total Transaction Value (TTV)

$6,520

$1,212

438%

Transaction Growth

346%

274%

 

Revenue

$486

$153

217%

Travel Revenue

$388

$79

387%

Product & Professional Services Revenue

$98

$74

33%

Total operating expenses

$505

$267

(88%)

Net loss

($2)

($55)

97%

Net cash used in operating activities

($155)

($122)

(27%)

EBITDA4

$63

($79)

178%

Adjusted EBITDA1

$47

($74)

162%

Adjusted Operating Expenses5

$438

$226

(92%)

Free Cash Flow6

($176)

($131)

(35%)

NM = percentages are not meaningful

Second Quarter 2022 Financial Highlights

Results for the second quarter ended June 30, 2022 include Egencia, which was acquired on November 1, 2021.

Revenue increased $333 million, or 217%, versus the same period in 2021. Within this, Travel Revenue increased $309 million, or 387%, primarily due to incremental revenue of $104 million resulting from the Egencia consolidation, $211 million resulting from Transaction Growth driven by the recovery in travel from the COVID-19 pandemic and an adverse foreign currency translation impact of $6 million. Product and Professional Services Revenue increased $24 million, or 33%, primarily due to increased management fees and Meetings and Events revenue as relaxed COVID-19 restrictions drove increased demand for business meetings, as well as the consolidation of Egencia. Pro forma for the acquisition of Egencia, total second quarter 2022 revenue increased 159% from the second quarter of 2021.

Total operating expense increased $238 million, or 88%, primarily due to the inclusion of Egencia’s operating expenses in the second quarter of 2022, increased cost of revenue to support the rise in the volume of transactions, higher general and administrative costs, higher sales and marketing costs, increased technology and content expenses and higher depreciation and amortization.

Net loss improved $53 million, or 97%, primarily due to a decrease in operating loss and positive fair value movements in earnout and warrant liabilities, partially offset by a lower benefit from income taxes and higher interest expense. Pro forma for the acquisition of Egencia, second quarter 2022 net loss improved by $125 million compared to the second quarter of 2021.

Adjusted EBITDA1 improved by $121 million, or 162%, primarily due to revenue growth, partially offset by increased Adjusted Operating Expenses. Pro forma for the acquisition of Egencia, second quarter 2022 Adjusted EBITDA improved by $189 million compared to the second quarter of 2021.

Adjusted Operating Expenses5 increased $212 million, or 92%, primarily due to inclusion of Egencia’s adjusted operating expenses in the second quarter 2022, increased cost of revenue to support the rise in the volume of transactions, higher general and administrative costs, higher sales and marketing costs and increased technology and content expenses.

Net cash used in operating activities increased $33 million, or 27%, primarily due to cash utilized for working capital investments driven by the continued business travel recovery, partially offset by reduction in operating loss.

Free Cash Flow6 decreased $45 million, or 35%, primarily due to an increase in net cash used in operating activities and increased cash outflow for the purchase of property and equipment.

Net Debt7: As of June 30, 2022, total debt was $1,221 million as compared to $1,023 million as of December 31, 2021. Net Debt was $775 million as of June 30, 2022 compared to Net Debt of $507 million as of December 31, 2021. The increase in Net Debt was driven by a $198 million increase in total debt primarily due to borrowing under the delayed draw term loan commitments and a $70 million decrease in cash and cash equivalents.

Raised 2022 Guidance

 

Raised 2022 Guidance 

Revenue

$1.8B – $1.85B

% of Pro Forma 2019 Revenue

64% – 65%

Adjusted EBITDA1

$90M – $100M

Adjusted EBITDA Margin8

~ 5%

The increases in 2022 Guidance are driven primarily by an increase in expectations for revenue recovery due to improved transaction recovery, which reached 76% of 2019 pro forma2 levelsin June 2022.

Forward-looking guidance does not include impact of a potential recession. The Company’s 2022 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 industry 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.

The Company has not provided a quantitative reconciliation of Adjusted EBITDA guidance to forecasted GAAP net income (loss) within this earnings release because the Company cannot, without unreasonable effort, calculate certain reconciling items with confidence due to the variability and complexity of the adjusting items that would be excluded from Adjusted EBITDA guidance. Such adjustments are for items that are not indicative of its core operations and include restructuring and integration charges, mergers and acquisition costs, equity based compensation, certain fair value measurements, including those related to fair value of earnouts and warrants, foreign exchange gains (losses), impairments of long-lived assets and corresponding income taxes. Further, the Company continuously evaluates its capital and debt structure that could impact interest payments. Such adjustments may be affected by changes in ongoing assumptions, judgements, as well as nonrecurring, unusual or unanticipated charges, expenses or gains/losses or other items that may not directly correlate to the underlying performance of the Company’s business operations. The exact amount of these adjustments is not currently determinable but may be significant.

Business Combination Transaction with Apollo Strategic Growth Capital

Amex GBT became a publicly traded company following the completion of its previously announced Business Combination with Apollo Strategic Growth Capital (“APSG”), which closed on May 27, 2022. Concurrently with the closing of the Business Combination, the Company received $365 million in gross proceeds from cash in trust and PIPE investments, including sizable investments by strategic investors Zoom and Sabre, and new investors Apollo, Ares and HG Vora. These investors join American Express Company, Juweel and Expedia Group, which remain invested in the Company. The Class A common stock and warrants of the newly combined company, Global Business Travel Group, Inc., began trading on the NYSE under the new ticker symbols “GBTG” and “GBTG.WS”, respectively, on May 31, 2022.

The Company now has in place an effective registration statement covering the resale by holders of certain of its securities. This includes approximately 32 million shares of Class A common stock issued in connection with the PIPE that are currently eligible for sale on the registration statement as well as approximately 394 million shares of Class A common stock, issuable upon the exchange of Class B Shares held by legacy shareholders, that are eligible for sale in the fourth quarter of 2022 when the contractual lockup on these shares expires. To the extent these holders choose to resell their securities, the Company expects that this will improve public float and the efficiency of trading in its stock.

Additionally, the December 2021 new term loan facility provided an incremental $400 million of financing, including delayed draw term loan commitments of $200 million, which the Company borrowed in the second quarter 2022. The Company also redeemed $168 million of preferred equity in the second quarter 2022.

Webcast Information

American Express Global Business Travel will host its second quarter 2022 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 U.S. generally accepted accounting principles (“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.

GLOBAL BUSINESS TRAVEL GROUP, INC.

CONSOLIDATED STATEMENT OF OPERATIONS

(Unaudited)

 
 

Three months ended
June 30,

 

Six months ended
June 30,

(in $ millions, except share and per share data)

 

2022

 

2021

 

2022

 

2021

Revenue

 

$

486

 

$

153

 

$

836

 

$

279

Costs and expenses:

 

 

 

 

 

 

 

 

Cost of revenue (excluding depreciation and amortization shown separately below)

 

 

199

 

 

95

 

 

372

 

 

177

Sales and marketing

 

 

82

 

 

45

 

 

154

 

 

88

Technology and content

 

 

95

 

 

59

 

 

185

 

 

116

General and administrative

 

 

89

 

 

41

 

 

154

 

 

80

Restructuring charges

 

 

(5)

 

 

(9)

 

 

(3)

 

 

(9)

Depreciation and amortization

 

 

45

 

 

36

 

 

89

 

 

70

Total operating expenses

 

 

505

 

 

267

 

 

951

 

 

522

Operating loss

 

 

(19)

 

 

(114)

 

 

(115)

 

 

(243)

Interest expense

 

 

(24)

 

 

(13)

 

 

(43)

 

 

(24)

Fair value movement on earnouts and warrants derivative liabilities

 

 

36

 

 

 

 

36

 

 

Other income, net

 

 

2

 

 

 

 

2

 

 

5

Loss before income taxes and share of losses from equity method investments

 

 

(5)

 

 

(127)

 

 

(120)

 

 

(262)

Benefit from income taxes

 

 

4

 

 

73

 

 

29

 

 

95

Share of losses from equity method investments

 

 

(1)

 

 

(1)

 

 

(2)

 

 

(2)

Net loss

 

 

(2)

 

 

(55)

 

 

(93)

 

 

(169)

Less: Net loss attributable to non-controlling interests in subsidiaries

 

 

(23)

 

 

(55)

 

 

(114)

 

 

(169)

Net income attributable to the Company’s Class A common stockholders

 

$

21

 

$

 

$

21

 

$

 

 

 

 

 

 

 

 

 

Basic earnings per share attributable to the Company’s Class A common stockholders

 

$

0.44

   

$

0.44

 

Weighted average number of shares outstanding - Basic

 

 

48,867,969

   

 

48,867,969

 

 

 

 

 

 

 

 

 

 

 

Diluted loss per share attributable to the Company’s Class A common stockholders

 

$

   

$

(0.21)

 

 

Weighted average number of shares outstanding - Diluted

 

 

444,320,221

 

 

 

 

444,320,221

 

 

GLOBAL BUSINESS TRAVEL GROUP, INC.

CONSOLIDATED BALANCE SHEETS

 

(in $ millions except share and per share data)

 

June 30,
2022

 

December 31,
2021

 

 

(Unaudited)

 

 

Assets

 

 

 

 

Current assets:

 

 

 

 

Cash and cash equivalents

 

$

446

 

$

516

Accounts receivable (net of allowances for doubtful accounts of $7 and $4 as of June 30, 2022 and December 31, 2021, respectively)

 

 

688

 

 

381

Due from affiliates

 

 

33

 

 

18

Prepaid expenses and other current assets

 

 

117

 

 

137

Total current assets

 

 

1,284

 

 

1,052

Property and equipment, net

 

 

210

 

 

216

Equity method investments

 

 

14

 

 

17

Goodwill

 

 

1,312

 

 

1,358

Other intangible assets, net

 

 

682

 

 

746

Operating lease right-of-use assets

 

 

48

 

 

59

Deferred tax assets

 

 

267

 

 

282

Other non-current assets

 

 

34

 

 

41

Total assets

 

$

3,851

 

$

3,771

Liabilities, preferred shares, and stockholders’ equity

 

 

 

 

Current liabilities:

 

 

 

 

Accounts payable

 

$

274

 

$

137

Due to affiliates

 

 

40

 

 

41

Accrued expenses and other current liabilities

 

 

441

 

 

519

Current portion of operating lease liabilities

 

 

19

 

 

21

Current portion of long-term debt

 

 

3

 

 

3

Total current liabilities

 

 

777

 

 

721

Long-term debt, net of unamortized debt discount and debt issuance costs

 

 

1,218

 

 

1,020

Deferred tax liabilities

 

 

115

 

 

119

Pension liabilities

 

 

280

 

 

333

Long-term operating lease liabilities

 

 

49

 

 

61

Earnouts and warrants derivative liabilities

 

 

121

 

 

Other non-current liabilities

 

 

25

 

 

23

Total liabilities

 

 

2,585

 

 

2,277

Commitments and Contingencies

 

 

 

 

Preferred shares (par value €0.00001; 3,000,000 shares authorized; 1,500,000 shares issued and outstanding as of December 31, 2021)

 

 

 

 

160

Stockholders’ equity:

 

 

 

 

Voting ordinary shares (par value €0.00001; 40,000,000 shares authorized; 36,000,000 shares issued and outstanding as of December 31, 2021)

 

 

 

 

Non-Voting ordinary shares (par value €0.00001; 15,000,000 shares authorized; 8,413,972 shares issued and outstanding as of December 31, 2021)

 

 

 

 

Profit Shares (par value €0.00001; 800,000 shares authorized, issued and outstanding as of December 31, 2021)

 

 

 

 

Class A common stock (par value $0.0001; 3,000,000,000 shares authorized; 56,945,033 shares issued and outstanding as of June 30, 2022)

 

 

 

 

Class B common stock (par value $0.0001; 3,000,000,000 shares authorized; 394,448,481 shares issued and outstanding as of June 30, 2022)

 

 

 

 

Additional paid-in capital

 

 

244

 

 

2,560

Accumulated deficit

 

 

(128)

 

 

(1,065)

Accumulated other comprehensive loss

 

 

(30)

 

 

(162)

Total equity of the Company’s stockholders

 

 

86

 

 

1,333

Equity attributable to noncontrolling interest in subsidiaries

 

 

1,180

 

 

1

Total stockholders’ equity

 

 

1,266

 

 

1,334

Total liabilities, preferred shares, and stockholders’ equity

 

$

3,851

 

$

3,771

GLOBAL BUSINESS TRAVEL GROUP, INC.

CONSOLIDATED STATEMENTS OF CASH FLOWS

(Unaudited)

 
 

Six months ended
June 30,

(in $ millions)

 

2022

 

2021

Operating activities:

 

 

 

 

Net loss

 

$

(93)

 

$

(169)

Adjustments to reconcile net loss to net cash used in operating activities:

 

 

 

 

Depreciation and amortization

 

 

89

 

 

70

Deferred tax benefit

 

 

(31)

 

 

(97)

Equity-based compensation

 

 

8

 

 

1

Provision for (release of) allowance for doubtful accounts

 

 

1

 

 

(4)

Share of losses from equity-method investments

 

 

2

 

 

2

Amortization of debt discount and debt issuance costs

 

 

2

 

 

2

Fair value movements on earnouts and warrants derivative liabilities

 

 

(36)

 

 

Other non-cash

 

 

 

 

(3)

Pension contributions

 

 

(19)

 

 

(12)

Proceeds from termination of interest rate swap derivative contract

 

 

23

 

 

Changes in working capital, net of effects from acquisition

 

 

 

 

Accounts receivables

 

 

(346)

 

 

(28)

Prepaid expenses and other current assets

 

 

(8)

 

 

44

Due from affiliates

 

 

(15)

 

 

7

Due to affiliates

 

 

 

 

4

Accounts payable, accrued expenses and other current liabilities

 

 

114

 

 

(53)

Net cash used in operating activities

 

 

(309)

 

 

(236)

Investing activities:

 

 

 

 

Purchase of property and equipment

 

 

(42)

 

 

(18)

Business acquisition, net of cash acquired

 

 

 

 

(53)

Net cash used in investing activities

 

 

(42)

 

 

(71)

Financing activities:

 

 

 

 

Proceeds from reverse recapitalization, net

 

 

269

 

 

Redemption of preference shares

 

 

(168)

 

 

Proceeds from issuance of preferred shares

 

 

 

 

100

Proceeds from senior secured term loans

 

 

200

 

 

100

Repayment of senior secured term loans

 

 

(1)

 

 

(4)

Repayment of finance lease obligations

 

 

(2)

 

 

(2)

Payment of lender fees and issuance costs for senior secured term loans facilities

 

 

 

 

(6)

Capital distributions to stockholders

 

 

 

 

(1)

Net cash from financing activities

 

 

298

 

 

187

Effect of exchange rate changes on cash, cash equivalents and restricted cash

 

 

(16)

 

 

(1)

Net decrease in cash, cash equivalents and restricted cash

 

 

(69)

 

 

(121)

Cash, cash equivalents and restricted cash, beginning of period

 

 

525

 

 

593

Cash, cash equivalents and restricted cash, end of period

 

$

456

 

$

472

Supplemental cash flow information:

 

 

 

 

Cash (received) paid for income taxes (net of refunds)

 

$

(1)

 

$

1

Cash paid for interest (net of interest received)

 

$

38

 

$

20

Dividend accrued on preferred shares

 

$

8

 

$

2

Non-cash additions for operating lease right-of-use assets

 

$

 

$

11

Glossary of Terms

“B2B” refers tobusiness-to-business.

Business Combination refers to the business combination between Apollo Strategic Growth Capital and Amex GBT that closed on May 27, 2022.

Customer retention rate is calculated based on Total Transaction Value (TTV) and includes Egencia.

“PIPE” refers to Private Investment in Public Equity.

Pro Forma New Wins Value refers to expected annual average value over the contract term from new client wins based on 2019 spend and includes Egencia.

Registration Statement refers to the Registration Statement (File No. 333-265748) filed by Amex GBT which was declared effective by the SEC on August 5, 2022.

SME refers to clients Amex GBT considers small-to-medium-sized enterprises, 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.

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.

Transaction Growth (Decline) represents year-over-year growth or decline as a percentage of the total number of transactions, including air, hotel, car rental, rail or other travel-related transactions, recorded at the time of booking and is calculated on a gross basis to include cancellations, refunds and exchanges. To calculate year-over-year growth or decline, Amex GBT compares the total number of transactions in the comparative previous period/year to the total number of transactions in the current period/year in percentage terms.

Transaction recovery represents the total number of transactions, including air, hotel, car rental, rail or other travel-related transactions, recorded at the time of booking and calculated on a gross basis to include cancellations, refunds and exchanges, in the current period as a percentage of the comparative period in 2019.

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 measure 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 other 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. In addition, we use certain of these non-GAAP financial 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 locations. We also use certain of our non-GAAP financial measures 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 (loss) income before interest income, interest expense, benefit from (provision for) income taxes and depreciation and amortization.

We define Adjusted EBITDA as net income (loss) before interest income, interest expense, 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, integration costs, costs related to mergers and acquisitions, separation costs, non-cash equity-based compensation, long-term incentive plan costs, certain corporate costs, fair value movements on earnout and warrant 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, integration costs, costs related to mergers and acquisitions, separation costs, 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 (loss) income 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 substitutes 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 we consider not to be indicative of our future operations.

EBITDA, Adjusted EBITDA, Adjusted EBITDA Margin and Adjusted Operating Expenses should not be considered as measures of liquidity or 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 the underlying business of the Company.

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 alternative to net (loss) income 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 (defined as debt (excluding lease liabilities) with original contractual maturity dates of one year or greater), 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 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.

Pro Forma Financial Information

This press release includes certain pro forma financial information. The pro forma adjustments assume that the Company acquired Egencia, Ovation and DER as of January 1, 2019 and include a constant currency adjustment. The pro forma financial information is unaudited and is presented for illustrative purposes only (and not for purposes of Article 11 of Regulation S-X) and is not necessarily indicative of the operating results or financial position that would have occurred if the relevant transactions had been consummated on the date indicated, nor is it indicative of future operating results. The pro forma financial information is based on certain assumptions which may or may not be realized, including as a result of risks and other factors discussed in the section entitled “Forward-Looking Statements” below and the risk factors in the Company’s SEC filings.

Tabular Reconciliations for Non-GAAP Measures

Reconciliation of net loss to EBITDA and Adjusted EBITDA:

 

Three Months Ended June 30,

($ in millions)

 

2022

 

2021

 

 

 

 

Net loss

 

$

(2)

 

$

(55)

Interest expense

 

 

24

 

 

13

Benefit from income taxes

 

 

(4)

 

 

(73)

Depreciation and amortization

 

 

45

 

 

36

EBITDA

 

 

63

 

 

(79)

Restructuring charges(a)

 

 

(5)

 

 

(9)

Integration costs(b)

 

 

8

 

 

4

Mergers and acquisitions(c)

 

 

1

 

 

8

Equity-based compensation(d)

 

 

5

 

 

1

Fair value movements on earnout and warrant liabilities(e)

 

 

(36)

 

 

Other adjustments, net(f)

 

 

11

 

 

1

Adjusted EBITDA

 

$

47

 

$

(74)

Reconciliation of total operating expenses to Adjusted Operating Expenses:

 

Three Months Ended June 30,

($ in millions)

 

2022

 

2021

 

 

 

 

Total operating expenses

 

$

505

 

$

267

Adjustments:

 

 

 

 

Depreciation and amortization

 

 

(45)

 

 

(36)

Restructuring charges(a)

 

 

5

 

 

9

Integration costs(b)

 

 

(8)

 

 

(4)

Mergers and acquisitions(c)

 

 

(1)

 

 

(8)

Equity-based compensation(d)

 

 

(5)

 

 

(1)

Other adjustments, net(f)

 

 

(13)

 

 

(1)

Adjusted Operating Expenses

 

$

438

 

$

226

a)

Represents severance and related expenses due to restructuring activities.

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.

d)

Represents non-cash equity-based compensation expense related to the GBTG/GBT JerseyCo MIP Options.

e)

Represents fair value movements on earnout and warrant liabilities during the periods.

f)

Adjusted Operating Expenses excludes (i) long-term incentive plan expense of $11 million and $1 million for the three months ended June 30, 2022 and 2021, respectively, and $20 million and $2 million for the six months ended June 30, 2022 and 2021, respectively (ii) litigation and professional services costs of $2 million and $0 for the three months ended June 30, 2022 and 2021, respectively, and $3 million and $1 million for the six months ended June 30, 2022 and 2021, respectively. Adjusted EBITDA additionally excludes (i) unrealized foreign exchange losses (gains) of $0 and $2 million for the three months ended June 30, 2022 and 2021, respectively, and $2 million and $(1) million for the six months ended June 30, 2022 and 2021, respectively (ii) non-service component of our net periodic pension benefit related to our defined benefit pension plans of $2 million for each of the three months ended June 30, 2022 and 2021 and $4 million for each of the six months ended June 30, 2022 and 2021, respectively.

Reconciliation of net cash used in operating activities to Free Cash Flow:

 

Three Months Ended June 30,

($ in millions)

 

2022

 

2021

 

 

 

 

Net cash used in operating activities

 

$

(155)

 

$

(122)

Less: Purchase of property and equipment

 

 

(21)

 

 

(9)

Free Cash Flow

 

$

(176)

 

$

(131)

Reconciliation of Net Debt:

 

As of

($ in millions)

 

June 30, 2022

 

December 31, 2021

Senior Secured Credit Agreement

 

 

 

 

Principal amount of senior secured initial term loans (Maturity – August 2025)(1)

 

$

241

 

$

242

Principal amount of senior secured tranche B-3 term loans (Maturity – December 2026)(2)

 

 

1,000

 

 

800

 

 

1,241

 

 

1,042

Less: Unamortized debt discount and debt issuance costs

 

 

(20)

 

 

(19)

Total debt, net of unamortized debt discount and debt issuance costs

 

 

1,221

 

 

1,023

Less: Cash and cash equivalents

 

 

(446)

 

 

(516)

Net Debt

 

$

775

 

$

507

1)

Stated interest rate of LIBOR + 2.50% as of June 30, 2022 and December 31, 2021.

2)

Stated interest rate of LIBOR + 6.50% (with a LIBOR floor of 1.00%) as of June 30, 2022 and December 31, 2021.

Reconciliation of Revenue Recovery vs. Pro Forma 2019:

($ in millions)

 

Three Months Ended
June 30, 2022

 

Three Months Ended
June 30, 2019

 

 

 

 

Revenue

 

$

486

 

$

557

Egencia, Ovation & DER revenue

 

 

 

 

182

Foreign exchange at constant currency

 

 

 

 

7

Pro Forma Revenue

 

$

486

 

$

746

 

 

 

 

Revenue Recovery vs. Pro Forma 2019

 

 

65%

 

 

Forward-Looking Statements

This communication contains certain “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995, Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. All statements (other than statements of historical fact) contained in this communication, including statements with respect to market size and growth opportunities, expectations regarding cost savings and synergies, and statements regarding future financial performance, liquidity, leverage and guidance, are forward-looking statements. Some of these forward-looking statements can be identified by the use of forward-looking words, including “anticipate,” “expect,” “suggests,” “plan,” “believe,” “intend,” “estimates,” “targets,” “predicts,” “projects,” “should,” “could,” “would,” “may,” “will,” “continue,” “forecast” or other similar expressions. All forward-looking statements are based upon estimates and forecasts and reflect the views, assumptions, expectations, and opinions of Amex GBT as of the date of this communication, and may include, without limitation, changes in general economic conditions as a result of the COVID-19 pandemic, all of which are accordingly subject to change. Any such estimates, assumptions, expectations, forecasts, views or opinions set forth in this communication should be regarded as preliminary and for illustrative purposes only and should not be relied upon as being necessarily indicative of future results.

The forward-looking statements contained in this communication are subject to a number of factors, risks and uncertainties, some of which are not currently known to Amex GBT. You should carefully consider the risks and uncertainties in the Company’s filings with the SEC, including as described in the “Risk Factors” section of the Registration Statement and similar sections in the Company’s other SEC filings. The Company’s SEC filings, including the Registration Statement, identify and address other important risks and uncertainties that could cause actual events and results to differ materially from expected results contained in the forward-looking statements. These forward-looking statements are not guarantees of future performance, conditions or results, and involve a number of known and unknown risks, uncertainties, assumptions and other important factors, many of which are outside the control of the parties, that could cause actual results or outcomes to differ materially from those discussed in the forward-looking statements. Important factors, among others, that may affect actual results or outcomes include: (1) changes to projected financial information or our ability to achieve our anticipated growth rate and execute on market opportunities; (2) our ability to maintain our existing relationships with customers and suppliers and to compete with existing and new competitors in existing and new markets and offerings; (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) intense competition and competitive pressures from other companies in the industry in which we operate; (6) factors relating to our business, operations and financial performance, including market conditions and global and economic factors beyond our control; (7) the impact of the COVID-19 pandemic, Russia’s invasion of Ukraine and related changes in base interest rates, inflation and significant market volatility on our business, the travel industry, travel trends and the global economy generally; (8) the sufficiency of our cash, cash equivalents and investments to meet our liquidity needs; (9) the effect of a prolonged or substantial decrease in global travel on the global travel industry; (10) political, social and macroeconomic conditions (including the widespread adoption of teleconference and virtual meeting technologies which could reduce the number of in person business meetings and demand for travel and our services); (11) the effect of legal, tax and regulatory changes; and (12) other risks and uncertainties described in the Company’s SEC filings, including the Registration Statement. Amex GBT cautions that the foregoing list of factors is not exclusive and not to place undue reliance upon any forward-looking statements, which speak only as of the date made. Amex GBT undertakes no obligation to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise, except as may be required under applicable securities laws.

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.

_________________________ 

1Adjusted EBITDA is a non-GAAP financial measure. Please refer to the section below titled “Non-GAAP Financial Measures” for more information.

2Pro forma assumes Egencia, Ovation and DER acquisitions completed on January 1, 2019, presented with a constant currency adjustment.

3Based on total assets across the largest banks in the world.

4EBITDA is a non-GAAP financial measure. Please refer to the section below titled “Non-GAAP Financial Measures” for more information.

5Adjusted Operating Expenses is a non-GAAP financial measure. Please refer to the section below titled “Non-GAAP Financial Measures” for more information.

6Free Cash Flow is a non-GAAP financial measure. Please refer to the section below titled “Non-GAAP Financial Measures” for more information.

7Net Debt is a non-GAAP financial measure. Please refer to the section below titled “Non-GAAP Financial Measures” for more information.

8Adjusted EBITDA Margin is a non-GAAP financial measure. Please refer to the section below titled “Non-GAAP Financial Measures” for more information.

 

Media:
Martin Ferguson
Vice President Global Communications and Public Affairs, American Express Global Business Travel
martin.ferguson@amexgbt.com

Investors:
Barry Sievert
Vice President Investor Relations, American Express Global Business Travel
investor@amexgbt.com

Source: Global Business Travel Group, Inc.

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