Note, we have seasonal movements in working capital in Q1, free cash flows that were different than last year. These timing factors will reverse and smooth out over the rest of the year, with the offset largely in Q3. As a reminder, our guidance does not include the impact of cash that will be used to fund the CWT acquisition and integration. I want to end with a reminder of our capital allocation policy, which is focused on growth, cash generation and reinvestment to drive shareholder returns. In addition to the CWT integration, our priorities are accelerating cash generation with a longer term free cash flow target of 45% to 50% of adjusted EBITDA, continuing to deleverage targeting a range of 1.5 times to 2.5 times net debt-to-adjusted EBITDA.
And as we continue to see cash flow acceleration and naturally deleverage, it gives us optionality to invest growth both organic and inorganic, and return cash to shareholders. So to wrap things up, our strong first quarter performance was in line with our expectations. With our continued focus on share gains, productivity, margin expansion, investing for long-term growth and cash flow acceleration, we remain confident in our full year 2024 guidance. So we can now move into Q&A. Paul and I are joined by Eric Bock, who is our Chief Legal Officer and Global Head of M&A. Operator, please go ahead and open the line.
Operator: Hello everyone, this is your operator session. Thank you, Jennifer. [Operator Instructions] We now have Peter Christiansen from Citi. Peter, your line is open now. Please go ahead.
Peter Christiansen: Thank you. Thank you. Good morning. Thanks for the question. Good job on some of the EBITDA margin efficiency showing through there. It’s good to see. I’m curious. I want to dig a little bit back into travel yield a little bit, and Karen that was helpful, your explanation there. I’m just curious if there was any incremental impact from GMN [ph] being a bit more higher share relatively versus SME. I’m wondering if there was any impact on travel yield with that. And then I have a follow-up.
Karen Williams:
,:
Peter Christiansen: That’s helpful. And then, Paul, I guess new wins still $3.3 billion, still very robust kind of number there. I guess, as we think about anticipation for the CWT acquisition to close, do you foresee new wins being a little bit under pressure temporarily ahead of that deal closing and subsequent integration, and just curious if you’ve also had any early feedback from potential clients on the acquisition? Thank you.
Paul Abbott: Yes. No, I think the pipeline for new wins is still really strong. If you look at the overall market we talked about scale of the opportunity, we’re in a $1.4 trillion industry and even after the CWT acquisition we’ll have $45 billion of that $1.4 trillion. And of course, SME is the biggest opportunity within that its $900 billion of TTV of which $300 billion sits with, if you like, professionally managed travel programs and $600 billion is in unmanaged. So we certainly see significant runway for growth and we expect to continue to gain share. If you look at the new wins for the last 12 months ending the first quarter, our win loss ratio is at $2.4. So for every dollar of business we lose, we win $2.4 of new business. So we’re consistently gaining share and we expect that to continue.
Peter Christiansen: Thank you. I appreciate that perspective. Thank you.
Operator: Thank you, Peter. Our next question is from Lee Horowitz from Deutsche Bank. Lee, your lines open now. You may continue.
Lee Horowitz: Great. Thanks for the question. Can you talk a bit more about the strength you’re seeing in Global Multinational now outpacing SME for the first time since the recovery? Maybe just a bit more on the sort of the underlying drivers of this evolving shape of your volume growth, and how you think about the sustainability of these factors moving forward? And then from regional perspective, obviously, APAC remains a big source of strength. Can you maybe just give us an update on how you’re thinking about the overall recovery in that region? How much more do you think is left to go relative to, say, other regions, and how you think about APAC sort of carrying sort of the overall volume growth moving forward? Thanks so much.
Paul Abbott: Yes, sure. So we’re really pleased to see the strength in Global Multinational. I think one of the advantages of our business is we have this diversified revenue model and diversified growth profile. We have just over 50% of revenues from SME, but just under from Global Multinational. Also, there’s a really good balance between customer and supplier revenues. And so I think that balance really, really helps. If you dig a little deeper into Global Multinational, I think what’s encouraging there is that we’re seeing strong growth across multiple sectors. Technology was certainly the standout in the quarter, and you’ve heard that, I think from some of the airlines that reported in the U.S. that was up 30% in the quarter, but we saw double-digit growth in professional services, pharma, also energy and utilities.
So pretty broad-based growth in terms of how that’s trending. The survey that I shared in the call just now, we go out every quarter to our Top 100 customers. So I think it’s a really good data point for Global Multinational outlook. And that most recent survey showed a strengthening of the overall spend projections for this year, up to 8%. And also the number of customers expecting an increase in travel volume in the balance of the year also was up another 3 points. So that would certainly indicate that I think that we’ll see pretty strong growth from that segment for the full year. If you’d asked me back in Q4, I would have actually thought our growth rates for Global Multinational and SME would have been closer together. And so Global Multinational is a little higher than I expected.
