Global Business Travel Group, Inc.

Good morning and welcome to the American Express Global Business Travel Fourth Quarter and Full Year 2022 Earnings Conference Call. As a reminder, please note today's call is being recorded. I will now turn the call over to the Vice President of Investor Relations, Barry Seaver. So, please go ahead, sir.

Hello and good morning, everyone. Thank you for joining us for our Fourth Quarter Earnings Conference Call. This morning, we issued an earnings press release, which is available on the SEC and on our website at investors.nxglobalbusinesstravel.com. The slide presentation that accompanies today's prepared remarks is also available on the NXGVT investor relations webpage. We would like to advise you that our comments contain forward-looking statements that represent our beliefs or expectations about future events, including the duration and effects of COVID-19, industry events, cost savings, and acquisition synergies, among others. All forward-looking statements involve risks and uncertainties that may cause actual results to differ materially from the statements made on today's conference call. More information on these and other risks and uncertainties is contained in our earnings release issued this morning and our other SEC filings. Throughout today's call, we will also be presenting certain non-GAAP financial measures such as EBITDA, adjusted EBITDA, adjusted EBITDA margin, adjusted operating expenses, pre-cash flow, and net debt. All references during today's call to such non-GAAP financial measures have been adjusted to exclude certain items. Definitions of these terms and the most directly comparable GAAP measures and the reconciliations for non-GAAP measures are available in the supplemental materials of this presentation and in the earnings release. Participating with me on the call today are Paul Abbott, our chief executive officer, and Martin Giroux, our chief financial officer. Also joining for the Q&A session is Eric Lopp, our chief legal officer and head of global M&A. With that, I'll now turn the call over to Paul. Paul?

Well, thank you, Barry, and welcome to everyone. Thank you very much for joining our fourth quarter earnings call. I'd like to kick off by reviewing the fourth quarter highlights before turning it over to Martine, who will take us through the financials in more detail. And then we're going to go through our outlook and our guidance for 2023. So before I get into Q4 earnings, I'd just like to make a couple of comments to address the 8K that we filed on Tuesday. Martine Gervaud, who is our Chief Financial Officer, stepped down from her role to take a new position outside of the company. And Karen Williams, who joined Amex GBT as Deputy CFO in May of last year as part of our succession planning process for the CFO role, will take over effective July the 1st. Karen joined us from IHG, as well as prior to that working at Avios, which is part of IAG and also American Express, where Karen has held a series of senior financial leadership roles. Martine is going to be with us until the end of June, so we have plenty of time for a very thoughtful and orderly transition. I do want to extend my sincere thank you to Martine for her leadership, and her significant contribution to our business in her five and a half years as CFO. Martine helped navigate the organization through the financial impact of a global pandemic and of course was also instrumental in leading the successful listing of the company. So welcome and congratulations to Karen and of course Martine. So turning back to the fourth quarter, we reported a strong finish to 2022 driven by continued recovery, record new wins and margin expansion. Our full year revenue and adjusted EBITDA were both ahead of guidance at 1.85 billion and 103 million respectively. Revenue recovery for the fourth quarter reached 75% of pro forma 2019 levels and that was up from 72% in the third quarter. Our fourth quarter adjusted EBITDA was 43 million with an 8% adjusted EBITDA margin. Pleased to say we're also on the path toward positive free cash flow with significantly reduced cash usage in the fourth quarter. Precast flow usage in the quarter declined significantly to 25 million. We also continue to accelerate our momentum in SME. The SME space, we benefit from offering a choice of market-leading solutions, Amex GBT, and Agencia, and Ovation, in what is a very large and unconsolidated segment, a segment that has the fastest growth rates and the highest margins in the industry. Our SME transaction recovery reached 82% in Q4, and that was up from 80% in Q3. Our SME new wins value totaled $2.1 billion in the full year 2022, and that is at the current recovery levels. Now that we have reached what is a meaningful point in the travel recovery, please note that we are reporting our new wins for FME and overall using the current recovery levels instead of the previous 2019 pre-COVID levels. And that's to make it easier for analysts and investors to model the impact of those new wins on our current volumes. So in addition to the strong SME momentum, I am pleased to report that new wins value and customer satisfaction levels are also both at all time highs, which I think really demonstrates the value of our industry leading service and technology and software and savings. Our strong momentum positions us well for continued strong growth ahead. Transaction recovery reached 72% of pro forma 2019 in the fourth quarter. That was up from 71% in Q3, and importantly, up 26 points year over year. Our new wins momentum, I think it shows that we continue to deliver on the significant organic growth opportunity that we have. Total new wins value for the full year 2022 was 3.5 billion. Again, that's at current recovery levels. And finally, and obviously equally importantly, our customer retention rate for the full year remains stable at 95%. So overall, we exceeded our 2022 guidance for both revenue and adjusted EBITDA. We delivered on the share gains on SME acceleration and exceeded the 25 million synergy target that we had previously. from the Agencia acquisition. And so as we look ahead to 2023, feel that we are well positioned for continued strong growth. So on slide six, let's just take a closer look at the continuum recovery, where our performance continued to improve throughout the quarter. Transaction recovery was at 72% of 2019, that was up one point sequentially, and 25 points versus Q1. And we're clearly outpacing the broader market. 72% transaction recovery compares to the GBTA January survey that found the recovery of domestic business travel at 67% and international at 54%. So that compares to our 72% transaction recovery and 75% revenue recovery in the fourth quarter, clearly outpacing the broader market. Looking at Q4, December was softer than expected across the industry, but we have seen a significant rebound of transaction volumes in January and February. And as I'm going to discuss in more detail, the outlook for business travel demand in 2023 remains strong. TTV recovery reached 70% in the fourth quarter. That was consistent with Q3, and it was up 31 points versus Q1. And finally, revenue recovery was at 75% in Q4, up three points from Q3, and up 25 points from the first quarter. So here we just take a look at the recovery trends in more detail. First of all, you'll see by customer segment, global multinational customer recovery remained pretty steady in the fourth quarter versus the third quarter, while SME customers continued to lead the recovery. Q4 SME transactions were 21 percentage points above global multinational and reached 82% of 2019, driven by obviously a faster recovery in that segment, but also by our significant share gains in the SME segment. Air recovery was stable in the fourth quarter at 66% and hotel recovery up two points versus Q3. Hotel transaction recovery was 14 percentage points above air in the fourth quarter. And this is an important strategic priority for us. We're making good progress, increasing that ratio of hotel to air bookings. And we're doing that through improved hotel content and hotel displays in both our Agencia and Neo software platforms. And finally, here on a regional basis, both the Americas and EMEA continue to improve in Q4. Within the Americas, if you unpack that, US recovery actually reached 71% in the fourth quarter. Canada was a little slower to recover. EMEA recovered by two percentage points versus Q3 and reached 74% of 2019 levels. And now that the travel restrictions have been certainly either relaxed or removed in China and Hong Kong and Singapore, it provides additional opportunity for growth and recovery in Asia in 2023. So let's turn to our commercial highlights for the fourth quarter. We delivered record new wins. We received further recognition of our ESG technology and people leadership. We are the clear leader in a $1.2 trillion industry with a significant runway for growth. And we continue to gain share with $3.5 billion of total new wins value in 2022. Again, based on the current recovery levels. And of course, supported by strong customer retention of 95%. Of course, as I mentioned, our biggest growth opportunity is with SME customers. It represents a total opportunity of $950 billion of travel spend. We are already the number one player in managed travel for SME customers, but only 30% of that $950 billion is actually managed, providing us with a significant future growth opportunity. And you can see here that we're making good progress. We signed $2.1 billion of SME New Wins value in 2022. Approximately 25% of that value, 55% of the number of customers is actually from companies whose travel programs were previously unmanaged. So I think it demonstrates we are gaining more and more traction converting this unmanaged customer travel spend into managed spending. We're also recognized as an industry leader in ESG. In the quarter, we were awarded Platinum EcoVardis status This actually places us in the top 1% of independently assessed companies across the world. And I think it demonstrates how we are helping our customers and our partners achieve their sustainability goals. Another sustainability example we've integrated with Choose, Choose Climate Tech. This allows us to actually integrate carbon emissions data at the point of sale across all of our channels, whether it's voice, whether it's Agencia, NEO. We present our carbon emissions data consistently and accurately across all channels so that both travelers and travel managers can track and be more aware of their carbon emissions data. So supporting our technology leadership, Agencia was ranked number one in two categories of the G2 Winter 23 report, most implementable solution and best results. G2 is the largest and most trusted peer-to-peer review site. It has more than 60 million people viewing. It has many Fortune 500 companies using it to inform their software decisions. In addition, Agencia also ranked as a leader in 15 categories in the G2 study. So I think it's just validation that we're providing excellent software solutions and an excellent experience to our customers. Additionally, in the quarter, Agencia was named a leader in corporate travel applications by IDC Marketscape. IDC is an independent voice that evaluates travel tech solutions. And again, it's an important influence over the B2B buying process. IDC specifically recognized, and I quote here, our data-led intuitive product experience and our ability to embed machine learning and AI into the user experience. And finally here we were voted the number one business services company in the Forbes America's Best Large Employers report in February of this year. And I would like to extend a sincere thank you to all of my colleagues around the world for their commitment and their leadership that makes this valuable recognition possible. So moving on to our strategic priorities. When we became a public company, we shared these strategic priorities, and I'm pleased to say we are clearly delivering on these priorities, and it's creating strong momentum for 2023. First of all, business travel recovery continues. Q4 revenue recovery reached 75%, up three points from Q3, and a dramatic improvement from the start of 22. Second, our recovery is significantly ahead of the industry due to continued share gains. New wins value 3.5 billion at current recovery levels. Third, we said our focus on winning in the SME segment would accelerate growth, and our results show exactly that. Q4 SME transaction recovery reached 82%. We reported SME new wins value of 2.1 billion for the full year, with approximately 25% of those wins coming from unmanaged customers. Fourth here, we're clearly delivering on the Agencia synergies. We continue to expect total opportunity of 109 million synergies. In full year 2022, we achieved approximately 45 million of synergies from the agency acquisition, which exceeded our target of 25 million. Fifth, our business model is clearly delivering significant operating leverage. In the fourth quarter, we delivered 71% revenue growth with only 16% growth in adjusted operating expenses. And finally, all these results combine to deliver significant margin expansion. In the fourth quarter, we reported 66% adjusted EBITDA fall through and an adjusted EBITDA margin of 8% and delivering financial results ahead of guidance. So to sum it up, I think our fourth quarter performance provides yet another proof point of our continued strategic and commercial and financial progress. So that completes my review of the Q4 highlights. I'd like to hand it to Martine to discuss the financial results in more detail before we move on to our 2023 outlook.

Thank you, Paul, and good morning, good afternoon, everyone. As you heard from Paul, And on page 10, we continue to deliver on our strategic and financial priorities. And you did finish 2022 on a strong note. Our revenue recovery was 75% of 2019 pro forma, which is three points above where the third quarter was. And it is three points above the transaction recovery in the fourth quarter, which was 72%. Our yield, which is measured as revenue over TTV, which is total transaction value, was 8.9% in the fourth quarter. We benefited from improved yields across both air and hotel. In fourth quarter, products and professional services revenue were actually up 14% sequentially, meaning versus the third quarter, driven by solid growth in management fees and particularly routine events. Our TTV recovery reached 70% in the fourth quarter. Transaction recovery was 72%. That's an improvement of one percentage point versus the third quarter. On a constant currency basis, TTV recovery was actually in line with transaction recovery. And while we did notice softening of the trends going into the holiday period, we are pleased to report that we're seeing a very strong rebound in January and February volumes, which is in line with our expectation for the first quarter of this year. Now, looking at year-over-year results on a pro forma basis, fourth quarter TTV was up 93% to reach $5.9 billion. Our average transaction value was up 19%. Now, that's largely driven by the strong recovery in international bookings versus prior years. Our fourth quarter total revenue increased 71% to $527 million. Now, within this, travel revenue was up 101% in Q4. Again, revenue yield outperformed other quarters due to very strong end-of-year air and hotel performance. And traditionally, Q4 is our strongest yield quarter as certain incentives are on an annual performance measurement. Product and professional services increased 12% year over year. And as we shared in previous goals, the growth in this line is more limited when you compare it to 2021 because this revenue component was relatively protected from the reduction in demand in 2021. Our adjusted operating expenses increased only 16% in the quarter, which compares favorably to a 71% increase in revenue in the quarter. And as a result, we delivered 43 million of positive adjusted EBITDA in the fourth quarter, which is an improvement of 145 million year-over-year. Our adjusted EBITDA margin was 8%, which is 41% improved year-over-year. On page 11, turning to the full year, as Paul mentioned, our 2022 results came ahead of guidance. Our full-year revenue came at the top of our revenue guidance range, which was $1.8 to $1.85 billion, and our adjusted EBITDA was above our guidance range, which was $90 to $100 million. Now, versus 2021 pro forma, our TTV was up 187% to approximately $23 billion. Our revenue increased 108% to $1.85 billion, and within that, travel revenue was up 159%, product and professional services revenue increased 23 percent again um more limited growth in this line because this revenue component was again relatively more protected from changes in demand in 21. our adjusted operating expenses were up 23 percent for the full year compared to revenue growth of 108 percent and as a result Our adjusted EBITDA reached a reflection point and turned and stayed positive beginning in the second quarter of 2022. For the full year, adjusted EBITDA again was 103 million. That is a very significant year-over-year improvement of 623 million. And our adjusted EBITDA margin of 6% increased 64 percentage points as compared to 2021. We maintain a very high level of fall-through. We're going to adjust the fall-through of 65% for the full year, which demonstrates our very strong operating leverage as well as the execution of our cost savings program in delivering on the Gentile Synergy. Now turning to cash flow, on page 12, as you just heard from Paul, and as we had shared with you on previous call and as we expected, our cash consumption significantly eased in the fourth quarter. Our free cash flow usage was $25 million in the quarter. That is an $87 million improvement from the third quarter, and it is driven by a lower bill to working capital. As we shared on previous calls, we do expect to reach positive free cash flow during 2023 as EBITDA will continue to recover meaningfully and as a working capital bill continues to normalize. As of December 31st, 2022, we had an unrestricted cash balance of $303 million, and our net debt was $919 million. Finally, we have a very strong liquidity position. Our total available liquidity is approximately $500 million. That is pro forma the additional term loan and revolver extension, which we completed in January this year. And the procedure via additional financing rates will be used for general corporate purposes, which include completing the agency integration, accelerating growth in SME and driving further efficiencies. And I will now turn it back to Paul to share how you're thinking about 2023. Okay, thank you, Martine.

Let's talk about 2023. As we said last quarter, there are several tailwinds that set us up for growth in 2023. First of all, the business travel recovery continues and the outlook remains positive with our customers. Industry experts predict business travel spend will continue to grow and capacity will continue to increase, all supporting continued growth in 2023. Secondly, as we predicted, distributed teams and hybrid work are clearly creating new business travel meetings and event demand and we see this particularly in our meetings and events results third airline capacity is expected to improve throughout 2023 and this incremental supply will of course support increased demand and fourth Our sales pipeline leads us to be confident in continued share gains in the year ahead, with specifically continued momentum in the SME segment. So all in all, I think this results in expectations for strong revenue and earnings growth in 2023. Now, I think importantly, these tailwinds and our expectations for the year ahead are supported by data from customers, and data from suppliers and data from across the industry. According to GBTA's Q1 2023 Business Travel Outlook poll, this was published at the end of January, domestic and international bookings are currently at 67% and 54% of 2019 levels. And this is up from 63 and 50 in October. So industry momentum continues. And you can see that we are clearly outpacing the industry with Q4 revenue recovery at 75%. Turning to customers, 78% of travel managers expect more or a lot more trips in 23 versus 22. 86% of travel suppliers are expecting higher spending from corporate customers in 23. And that's an improvement versus 80% in the survey in October. Finance, insurance, professional services, consulting, other sectors where we're seeing the strongest growth trends for the year ahead. So GBTA expects total business travel spending to grow by 24% in 2023 to reach over a trillion dollars. This expected increase in demand will be met by increased supply. IATA expects capacity growth of 18% globally. This looks a little different by region. You've got 5.5% increase in North America, 6.1% in Europe, and then 48% growth in capacity in Asia Pacific, largely driven by the opening of China. So you can see here that there is strong evidence from customers, from suppliers, from industry experts supporting our confidence in solid industry growth for the year ahead. And of course, and very importantly, we expect to augment these tailwinds with further share gains driven by our industry-leading software and services. So let's just go through our strategic priorities again and really highlight how they are positioning us to deliver strong growth in 2023. So, as I just said, business travel recovery continues. GBTA survey found 78% of travel managers expect more business trips in 2023, and IATA expects more capacity across all regions. Share gains. We reported 3.5 billion of total new wins in 2022, and we expect to continue this strong growth in 2023, and we have a pipeline to support that strong growth. SME acceleration. We have moved to a new global segment driven operating model and structure for the company. And that is going to intensify our focus on scaling the SME business around the world. A segment with the fastest growth and the highest margins represents by far the largest addressable opportunity for us. And we are now taking a much more consistent and even greater focused approach to capturing this opportunity around the world. On agency of synergies, in 23, we plan to deliver additional synergies through exiting additional TSAs, realizing additional technology and real estate savings. And on operating leverage, we are going to continue to operate our business with really strong focus on operating leverage. We expect single-digit operating expense growth in 2023. And that is going to drive strong margin expansion with 17 to 20% revenue growth. And finally, these efficiencies, of course, lead to continued strong margin expansion in the year ahead. So this all results in full year 23 expectations, as you can see here, 17 to 20% revenue growth, 220 to 259% adjusted EBITDA growth with approximately 10 percentage points of adjusted EBITDA margin expansion. Importantly, as growth continues beyond 2023, when we look at the financial and commercial drivers of the business, we remain on track to deliver pre-COVID adjusted EBITDA of approximately $500 million at the 86% revenue recovery level. or achievement of $2.4 billion in revenue. So I'm now going to turn it over to Martine to go over our 2023 guidance in more detail. Martine, over to you.

Thank you, Paul. So on page 17, in 2023, we expect to deliver double-digit revenue growth and margin expansion. And we project to turn pre-casual positives during the year and actually come within our target net leverage of two to three times. Now let me review with you what are the key drivers for our 2023 guidance in which we assumed a measured view of the microenvironment this year. We're starting with the components of our expected 17 to 20% revenue growth. Twelve points of that growth really results from carrying forward the fourth quarter runways, and another five to eight points of additional growth is expected to come from a combination of share gains and organic growth. We project an overall revenue recovery of 77 to 79 percent in 2023. That's about two points above where we project transaction recovery. On the cost side, as you heard from Paul, we expect single-digit growth in operating expenses as we improve operational efficiencies, fully realize our cost synergies, and achieve benefits from the reorganization we announced in January. Now in 2022, particularly in the second half, and that impacted the fourth quarter as well, Our operational productivity was negatively impacted, really a consequence of having to recruit and train a significant number of new agents, travel agents, and a consequence of the travel disruptions as the industry was facing very similar challenges. Now, in 2023, we expect to achieve significant productivity gains as we improve our operating metrics from where they were in the fourth quarter. And as a result, we expect to continue to deliver high operating leverage with an adjusted EBITDA fall through about 70% in 2023 and a margin expansion of 9 to 11 points. As previously mentioned, we anticipate reaching positive pre-cash flow during the year. We expect this to take place in the second half of the year, given the seasonality of our working capitals. And finally, we expect to exit 2023 with a leverage ratio that will be at the high end of our two to three times long-term leverage target. The assumption I just shared with you results in the following full year 2023 guidance. So revenue comprised between 2.17 and 2.22 billion. That equates to revenue growth of 17 to 20% year over year. An adjusted EBITDA, between $330 million to $370 million. That equates to an adjusted EBITDA margin of 15% to 16% and a margin expansion of 9% to 11% as compared to 2022. Now let's turn to the first quarter guidance and the key drivers that are underlying this first quarter guidance. As you would expect, we anticipate a much higher rate of growth in the first quarter as we overlap the first quarter of 2021, which had a lower recovery because of Omicron. Before the first quarter, we expect a transaction recovery in the mid-70s and TTV recovery to be a couple of points below transaction recovery, very consistent with what we have seen in the previous quarters. In our quarter to date, transaction recovery through January and February is trending in line with our expectation for the quarter. We expect our revenue recovery to be six months ahead of volume recovery in the first quarter, which is above what we project on a four-year basis. And this is really driven by a quarterly phasing of revenue in the 2019 baseline, which is different from what we expect it to be in 2023. Because if you think about our revenue yield, our revenue yield, sorry, in the first quarter is actually largely in line with our full year expectations. So much more a function of the 2019 baseline than, you know, our trend. Moving to expenses, we anticipate operating expenses to be flat to the fourth quarter of 2022. as the cost to support the first quarter volume really ramped up in the fourth quarter of last year, and as we achieved higher productivity in our operation, as I mentioned. Finally, we expect operating leverage to result in a very significant improvement in adjusted EBITDA and margin with about 23 to 24 points year over year. So our first quarter 2023 guidance, has a revenue that is comprised between $550 and $570 million. That's a revenue growth of 57% to 63% year-over-year. We expect adjusted EBITDA to be between $75 to $90 million. That's a margin of 15% to 16%. And growth in adjusted EBITDA margin of 23% to 24% . And so in summary, we are delivering on a strategy, we're delivering on our commitment to customers and shareholders, and we are positioned for strong growth in 2023 and beyond. We exceeded our 2022 revenue and adjustability guidance. The business travel recovery has strong momentum. We are delivering on our share gains and SME acceleration. We are executing on the Agencia synergies and delivering high operating leverage. We are positioned for strong revenue and adjusted EBITDA growth in 2023. And we remain on track to deliver an adjusted EBITDA of approximately $500 million with a revenue recovery of 86%, which equates to approximately $2.4 billion in revenue. we are delivering on what we committed to and we are confident in our position for continued momentum ahead. So thank you very much for your interest and we will now open for questions. Operator.

Thank you. If you would like to ask a question, please press star then 1 on your telephone keypads now.

If you change your mind, please press star 2. We have our first question from Dwayne Peniflas of Evercore ISI.

You may proceed.

Hey, thank you. Just with respect to your outlook for transaction volume recovery, can you talk about maybe the regions or the geographies where you're seeing the biggest sequential improvement and understand maybe January wasn't the hottest month, but maybe mark a you know, kind of where we are in the month of March versus the levels that you saw in the fourth quarter.

Do you want me to take that, Paul?

Sure.

I'll take that. Sure, I'll take that. So in terms of the, you know, in terms of the geographies, We expect somewhat higher recovery in the countries that were, I'd say, the slowest to open, so that would be more some of the Southeast Asia. Canada is another market. Outside of those, in China, China has a relatively small impact because we don't consolidate China. Outside of those particular geographies, we expect a fairly you know, fairly steady recovery in both Europe and the U.S. And in terms of trends, as I was indicating, actually, you know, based on everything in January and February, we saw an improvement in the recovery, which is consistent with what we expect for the first quarter. So very strong rebound after the holiday season.

It may be more of a U.S. phenomenon, but I would guess that March is the strongest month of the quarter in terms of corporate travel recovery. Any thoughts on kind of where March stands relative to fourth quarter? And, you know, no problem if that's not a level of detail that you want to get into.

You know, I'll come in on January 3rd because March is just starting. And, again, we're very encouraged with what we saw in January and February. which is an improvement over what we saw in the fourth quarter, particularly, you know, the exit into the fourth quarter where, you know, we were impacted as the industry was at the end of the holiday. So very good.

Thanks.

Thank you. Thank you.

Just for my follow-up on the seasonality of working capital, you know, nice improvements. in that line over the balance of 2022. But can you help us think about kind of the seasonality of that working capital build around the bookings build here into 2023? And thanks for taking the questions.

Sure. So in terms of working capital, we tend to have the working capital build going into the first quarter and the second quarter because that's where most of the let's say volume seasonality is, we tend to then get back down in the third quarter. And the fourth quarter is usually favorable as well from the working capsule. That's usually very low working capsule quarter. So expected to come up in the first half and then reduce going into the fourth quarter.

Okay. Thank you very much.

Thank you. As a reminder, Insta wants to ask any questions. And we now have Hilary Lee and Morgan Stanley.

Hi. Thanks for taking the question. I just wanted to kind of come back to, you know, the remaining 20% of the permanent cost savings you guys are waiting on. I know you said in the past you expect it to come back once volumes return to around 100% and, you know, recovery nearing, you know, high 70s in 2023. Just wondering if you could kind of give or, you know, what you expect for cadence in realizing those savings, and could you kind of give an approximation of how much you would expect to realize at, say, 86% of pro forma versus 95%?

Sure.

So, you know, we would expect that remaining 20%, which is about 40 million, We would expect to start realizing some of that obviously this year as we're in the high 70s from a recovery standpoint, and then the remaining of that going into 2024 and 2025 as we near the higher recovery levels. It should be pretty linear to what the volume recovery is.

Okay, great. Thanks. Just one more question for me. And you guys talk about the $3.1 billion in new wins. I guess, could you just kind of give an idea of how much it takes for those wins to ramp and turn that into revenue on your guys' income statement?

Sure. So the way to think about it is it takes two to three years, depending on the customer. You don't have necessarily a hundred percent of conversion for two reasons. One is some of that is the legal partner volume, so not up to the market, but a partner market. And some of that is a leakage. So you typically have around 70% conversion. And that conversion broadly takes place with a majority over a two-year period. And, you know, by the third year, we have all of that 70% volume converted.

All right, great. Thank you.

Thank you. Is there one to ask a question? And we now have Lee Horowitz of Deutsche Bank. You may proceed.

Great. Two, if I may. I'd like to dig into the full year 22 guide. You guys highlight the GBTA spend expectation growth of 24%. Your guidance suggests 20% revenue growth at the high end and 5 to 8 points of share gains or slash organic growth for the year. This seems to sort of stand in contrast to what is a high degree of confidence in driving incremental share this year. Can you tell us better understand the disconnect between those two?

Yeah, Martin, maybe I'll start on that one. I think the GBTA prediction is a prediction at this point, but it's actually also travel spend. And if you look at our plan, that's sort of the equivalent of our TTV. And our TTV plan for 2023 is somewhere in that low to mid-20s as well. So our kind of TTD plan is pretty consistent with that GBTA outlook.

Helpful. Thank you. And then maybe take a step back. You know, a question we often get from investors is around the outlook you're seeing from distributed teams. Can you help us, you know, maybe better quantify what you saw in 2022 regarding distributed teams driving incremental events volume and maybe what you're thinking about in terms of expectation in regards to 23 and 24?

Yeah, I'm sorry. I didn't quite catch the question. You just cut out. I don't know. I apologize if it was my end or yours. Do you mind just repeating that?

No worries. It's in regards to the uplift you're seeing from distributed teams. We get this question from investors a lot, how much incremental meeting demand from distributed teams is offsetting some degree of compression across the industry due to proliferation of zero and those sorts of things. So if you could have us better understand maybe what you saw in 2022 in regards to incremental volume coming from distributed workforces and or what your expectations are for that to sustain as we look out to 23 and 24. That'd be super helpful.

Yeah, sure. No, thank you. So as we exited 2022, so you look at the fourth quarter, the number of meetings and events that we were managing was actually you know, above 2019 levels. So it gives you a sense of the level of demand, but it does have a slightly different mix. We have a division that deals with meetings for under 50 people, so smaller meetings, and that is the fastest growing part of the business. The number of meetings is at 2019 levels as we exited, but the mix has moved more towards a larger number of smaller to midsize meetings. As we look out to 2023, our adjusted EBITDA from our meetings and events division You know, we will see that at or above 2019. That's how we kind of see the year ahead. And it's one of the businesses where we have, frankly, a better view of the future because the booking windows are so much further in advance for meetings and events. So, you know, we're pretty confident in the outlook for 23 for meetings and events.

Thank you.

Thank you. To ask a question, it's Star 1. And we now have Steven Du of Credit Suisse. Your line is open.

Okay. Thank you. So just switching focus a little bit to the SME segment, you know, given what looks like a very high level of fragmentation there, There is still a wide open field for not only yourself, but for others to look to consolidate share as well. So I'm wondering if there is any step up in competitive intensity you may be seeing in the industry as the sector continues to recover. And second, in terms of the booking type that you guys have disclosed, and I think this is on slide seven, just wondering about the behavior among the clients, like why? the hotel dollar recovery level seems to be charging ahead of air at this point. Thank you.

Yes, I think in terms of the SME competitive landscape, I think you hit on both points there, Stephen. I mean, yes, there are some new entrants and there's increased competitive activity, But very few have gained any significant share or scale. And when you look at that, you know, alongside the sort of size of the opportunity, we don't see any change. In fact, if you look at 2022, we had a record win-loss rate in the SME segment. And looking at our pipeline for the year ahead, confident we'll set a new record. So yes, there's activity, but it's certainly not impacting our ability to aggressively grow in that segment. And I think one of the major advantages that we have is the range of solutions that we offer. It's not one single segment with one homogenous set of needs. If a customer is looking for like a high touch white glove service that includes both business travel and access to premium leisure, we have a fantastic solution for them, innovation. If they're looking for a turnkey SaaS solution with an intuitive customer experience, with access to fantastic content, we have Agencia. And if they're looking for that more sophisticated outsourcing of travel end-to-end, perhaps on a regional, global basis, then that really tends to fit Amex GBT more. One of the major advantages that we have is going out into this very large segment is being able to offer that choice to customers because there are different needs in different sub-segments of the SME space. And I think we're uniquely positioned with the solutions that we have there. I mean, I would say hotel... One of the key elements that's driving the increased recovery is that it has been a strategic priority for us to increase content and what we call attachment rates. So to increase the number of hotel bookings in relation to air bookings. Bringing in all of the content from Expedia, for example, which we do through APIs, we bring it into our supply management platform, and we are able to present that content through our Agencia platform, through our Neo platform. So improving the content and improving the displays is definitely increasing conversion and increasing that attachment rate. But it is a broader trend as well across the industry where we have seen hotel recovery above air. And I think one of the trends supporting that is what we talked about before in terms of meetings and events. There's a lot more demand for small meetings and events, which often are more localized and more hotel-driven than air-driven. So I'd say those are the two key trends. Thank you. One other trend that perhaps is more specific to Europe is we are seeing growth in rail. And I think there's obviously certain dynamic in Europe where there's on certain routes significant increased efficiency and frequency of rail. And so that is a factor when you look at Europe specifically.

Thank you. If you'd like to ask a question, please press star then 1 on your telephone keypad. We have no questions at this time, so I'd like to hand it back to the management team.

Great. Well, look, thank you very much for your questions.

In closing, I just want to thank our team across Amex GBT for their dedication to our customers and the strong results they've delivered. We are excited about the year ahead and very confident in our position and our outlook for growth in 2023. So thanks for joining us and your continued interest in the company. Thank you very much.