Corporate Travel Management Announces 2023 Financial Results

Corporate Travel Management (CTM) has reported financial year 2023 results, with revenue increasing by 70% to ASD$660.1 million, exceeding previous earnings guidance of ASD$648 million and strong momentum in the final quarter of the financial year 2022-23 with  revenue >90% of pro-forma FY19. CTM’s underlying EBITDA for FY23 of ASD$167.1 million, was up 179% from ASD$59.8million in FY22. On 30 June 2023, the Group had no debt and $151.0 million cash. 

The second half demonstrated strong earnings momentum, with over ASD$115 million of EBITDA. The business won ASD$2.95billion of annualised new client wins in FY23, the majority of which are not yet transacting.

Managing Director, Jamie Pherous, said: "Our performance in FY23 validates our successful strategy during the pandemic which has given us a larger global platform. We are taking strong momentum into FY24 with EBITDA averaging $20 million per month and PBTa averaging ASD$16.5 million per month since February 2023. Pleasingly we are successfully converting the revenue recovery into net profit.”

Revenue from the North America business rose 40% to ASD$303.7 million. Despite the ongoing recovery, travel activity in the region has been slower than expected, with our client base having recovered to approximately 65% of Pro-forma FY19 Revenue. 

The focus of operations in North America has shifted to driving market share growth, technology, and automation gains after the integration of the Travel and Transport acquisition was completed in the reporting period. The 2H23 EBITDA/Revenue margin grew to 24.5% as a result of this work. 

The corporate travel market continues to recover from the challenges in the first half of FY23 and is expected to grow significantly in FY24.

Revenue in the firm’s European business rose 70% to ASD$143.0 million compared to the previous year.

Europe region's performance benefited from major new client and contract wins, with high CTM technology uptake over a significantly larger scale. Travel activity by our corporate and Government client bases grew rapidly throughout the year, alongside the Group’s work relating to the UK Government's ongoing humanitarian work. The increase in the UK Government activity in FY23 had a material impact on Operating Cashflow as a result of invoice terms. 3 

Major new contracts and client wins, with high adoption of automation by all clients have contributed to the region’s high margins. The level of margins in the second half of FY23 are unlikely to be sustained into the future. 

In April 2023, CTM was awarded its largest customer contract, to manage the accommodation needs of asylum seekers in the United Kingdom. The TTV associated with this contract is estimated to be in the vicinity of GBP1.6 billion over 2 years. As this contract only became operational in June 2023, it had little impact on the FY23 results, but it is expected to contribute significantly to the Europe region's results in future years. 

The Europe business is expected to have strong growth in FY24.

Revenue from Australia and New Zealand rose 134% to $160.1 million, and underlying EBITDA increased by 265% to ASD$42.4 million. 

During the year, the integration of the Helloworld corporate and entertainment businesses (Australia and New Zealand) was completed. This expansion has been instrumental in strengthening CTM’s niche in the Government sector and securing arguably the largest corporate account in Australia, the Whole of Australian Government travel management services contract. This program commenced on 1 July 2023 and has a four-year term with three one-year extension options.

Managing Director, Jamie Pherous, said: "We have been investing in AI and automation for the last two years and we are encouraged by the results in the last quarter. It is early days in the life cycle and we are already saving 1,000 work hours per month. A key goal for FY24 is to expand this globally to free up our consultants to manage high value, urgent transactions typical of our client base and to ultimately provide superior self-service capability at any time of the day for our customers.”

Revenue from Asia rose 198% to ASD$51.6 million, reflecting an impressive turnaround since the China market re-opened early in the second half of the financial year. 

CTM’s Asia market share has doubled compared to FY19 levels, and the business has delivered record profits since March 2023 on a 70% recovery in revenue. As a result, we expect the region to surpass its FY19 EBITDA record of ASD$25m in FY24 through a combination of market recovery and continued client wins. 

CTM entered FY24 with strong revenue and earnings growth momentum and continues to see encouraging signs for FY24. 

Whilst July and August is seasonally a quiet period for corporate travel, activity is tracking significantly above July 2022 with transactions +42% and revenue +34%. This is a result of strong client wins (ASD$2.95bn) in FY23 starting to transact. The group has secured 15% of its FY24 global sales target in July. 

Further, the Group’s annual Global Customer Survey, conducted in May 2023, indicates a growing appetite for corporate travel in the year ahead. The findings show that survey respondents expect to travel the same or more in the year ahead for client meetings (94%), internal meetings (91%), international travel (85%) and same day business trips (84%) in the year ahead. This points to continued expected recovery in client travel.