American Express Global Business Travel reported strong growth in transactions for its global multinational customers but more muted growth for its SME clients.
Releasing its third quarter results yesterday, it said spending by its multinational customers rose 8% but for SMEs, where it is targeting its growth, it grew by only 2%.
It said SME customers are more sensitive to economic pressures, such as high prices, interest rates and inflation.
CEO Paul Abbot told investors the TMC giant was expecting confidence among its SME clients to improve going into 2025 as interest rates gradually come down in Europe, the UK and the US.
Amex GBT said it has won $3 billion worth of new business in the 12 months to September 30, with around two thirds coming from the SME sector.
During the third quarter, total transaction value TTV grew 9% year over year to $7.8 billion, revenue grew 5% year over year to $597 million and adjusted EBITDA grew 23% to $118 million.
Amex GBT said its continued cost-cutting programme was expected to generate $100 million in savings this year.
Abbott stated: “We continue to execute on our strategy and deliver strong results with a focus on share gains, margin expansion and investing for growth. Our recent share buyback and larger scale authorisation demonstrate our confidence in our long term strategy.”
Karen Williams, Amex GBT’s Chief Financial Officer, added: “Our focus on productivity and margin expansion has enabled us to invest significantly in our people, products and services. This has resulted in accelerating Free Cash Flow generation and continued deleverage. We are now in the strong position of being able to fund the anticipated closing and integration of the CWT acquisition, executed our first share buyback and have a new, larger authorisation in place to return cash to shareholders.”
Abbott said Amex GBT still expected the CWT deal to close in the first quarter of 2025 and was continuing to work through the relevant regulatory approval processes.
UK competition authorities are currently reviewing the proposed deal and an update is expected in a few weeks.
