Sabre Holdings Sam Gilliland Chairman and CEO - PowerPoint PPT Presentation

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Sabre Holdings Sam Gilliland Chairman and CEO

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Title: strong LEADERSHIP PARTNERSHIP OPPORTUNITY Author: Mark G. Murray, CTC Last modified by: Thomas Ward Created Date: 9/28/2004 5:47:01 PM Document presentation format – PowerPoint PPT presentation

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Title: Sabre Holdings Sam Gilliland Chairman and CEO


1
Sabre HoldingsSam GillilandChairman and CEO
  • Merrill Lynch Conference
  • February 9, 2005

2
Agenda
  • Overview
  • 2004 Performance by Business
  • Key Trends and Current Industry Assessment
  • Company Strategy and Opportunity
  • 2005 Strategic Priorities
  • Financials

3
Sabre Holdings
A world leader in travel commerce, retailing
travel products and providing distribution and
technology solutions for the travel industry
4
Sabre at a Glance
  • SP 500 Company
  • 6,800 employees in 45 countries
  • Revenues of 2.13 billion in 2004
  • 2004 earnings per share growth gt 75
  • Three distinct businesses serving travelers,
    corporations, travel agents and travel suppliers

5
2004 Performanceall about execution
  • Maximize Business Unit Performance
  • Travelocity profitability
  • Cross-portfolio technology investments
  • Accelerate Travel Retailing and Portfolio
    Initiatives
  • Travelocity content and capabilities expanded
  • GDS merchandising programs launched
  • Reduce Costs for Competitive Advantage
  • Reduced company-wide costs by over 80 million
  • Lowered the rate of incentive growth
  • Return of Capital
  • Returned 270 million to shareholders
  • Dividends of 41 millionrepurchased 228 million
    in stock

6
Travelocity 2004 Accomplishments
  • Profitable for the full year on an adjusted basis
  • gt65 million turnaround in YOY operating income
  • Revenue growth of 30 (adjusted) 27 (GAAP)
  • Differentiated and enhanced consumer brand
  • Major redesign of web site and new logo
  • New advertising campaign launched the Roaming
    Gnome
  • International expansion
  • Buy-in of European joint venture
  • Entered French online marketplace
  • Acquired travelchannel.de in Germany
  • Delivered best-in-class capabilities
  • Merchant hotel program gt17,000 properties
  • Flight Navigator industry leading air shopping
    path
  • Travelocity Partner Network Southwest Airlines
    Cruises,
  • AARP, American Express
  • Travelocity Business
  • Revamped user interface
  • Signed large customer accounts Aetna, General
    Dynamics, AMA

7
Sabre Travel Network 2004 Accomplishments
  • Met revenue and well exceeded earnings growth
    targets
  • Revenue growth 2 percent (adjusted) and flat
    (GAAP)
  • Operating margin of 19 (adjusted) and 17 (GAAP)
  • Expanded Distribution and Marketing Services for
    Hoteliers
  • Launched Hotel Spotlight
  • Acquired SynXis Corporation
  • Rolled out numerous merchandising programs
  • Impressive gains for specific hotel properties
  • Last minute packaging through the GDS
  • Cost Reductions across the business
  • Consolidated customer call centers in Latin
    America
  • Assured Vantage Program launched to help slow
    growth of incentive costs
  • Channel shift slowed
  • Averaged under two points for the year
  • GetThere transactions increased gt30
  • Rolled out industrys first fully-automated
    online ticket exchange

8
Airline Solutions 2004 Accomplishments
  • Revenue and earnings growth dampened by tough
    year in software sales
  • Revenue growth of 5operating margin 6
  • Fourth quarter revenue rebounded
  • Further developed and integrated products and
    services
  • Launched SabreSonic, a new generation of airline
    passenger solutions suite
  • Expanded presence in high-growth markets
  • Signed a multi-year, multi product agreement with
    low-cost carrier Frontier Airlines
  • Moved into Canadas low-fare carrier market by
    signing a five-year agreement to support WestJet
  • Continued international diversification
  • Signed Aeroflot and Air One for our SabreSonic
    suite of products

9
Key Trendsand Current Industry Assessment
  • Channel Shift
  • Supplier-direct movement slowing
  • Deregulation
  • CRS deregulation in US
  • Now under review in Europe
  • Emerging Trends
  • Travel Search Engines

10
Industry Growthglobal opportunity
2007 Global Gross Travel Spend
870 B
1,000
900
Rail
80
800
Cruise
11
APAC
257
Corporate
700
349
19.1
Indirect
492
600
LA
51
Hotel
419
Billion
Offline
695
500
EMEA
280
400
Car
63.7
40
300
Leisure
520
200
Direct
378
US and Canada
Air
320
282
100
Online
175
3.9
0
REGION
SUPPLIER
CHANNEL
CHANNEL
SEGMENT
Data Source PhoCusWright, Jupiter, EuroMonitor,
Sabre Holdings Analysis
11
Channel Trendsindirect and direct
Global Air Spend Mix Leisure Corporate
400
300
OFFLINE
57
Billion
200
Indirect
ONLINE
100
OFFLINE
43
Direct
ONLINE
0
2003
2004
2005
2006
2007
Data Source PhoCusWright, Jupiter, EuroMonitor,
Sabre Holdings Analysis
12
Extending From Reseller to Retailerleveraging
scale and growth
  • Core Global Distribution System (GDS)
  • Comprehensive content, pricing aggregation, and
    global reach
  • High availability and real-time information
  • Accurate pricing and inventory
  • Leading technology and scalable platforms
  • Process automation and data integration
  • Retailer
  • DIRECT INDIRECT
  • Brand building and management
  • Customer Insight
  • Customer loyalty
  • Wholesale product creation and distribution
    across channels
  • Comprehensive product availability
  • Partner point of sale technology

POWERFUL GLOBAL NETWORK
SCALE and EFFICIENCY
AREAS of GROWTH
13
Optimize the Core GDS Business
  • Global Scale
  • Cost advantage through leading transaction scale
  • Content advantage through leading demand
    aggregation
  • Technology Investment
  • World-class shopping and pricing
  • Improved transaction efficiency
  • Leverage TSG portfolio investment ? packaging
  • Business Model Evolution
  • Agents ? choice, efficiency, high margin
    content,and Marketing Services ? Jurni Network /
    Nexion
  • Suppliers ? flexibility, value-based options,
    merchandising

14
Growth through Retailing
Travel Retailing
Direct / Indirect
Global Expansion
Hotel
Packaging
Data and Customer Insight
Differentiated, High-Margin Content
Capabilities
Marketing Services
Leading Technology
15
Travel Retailingacross the network
Supplier
Traveler
DIRECT
PRIVATE LABEL
INDIRECT
PASSIVE
16
Economic Opportunityincreasing revenue per trip
Degree of influence over travel product sold
RevenuePer Trip
7X 4X 2X X
Retailing HEAVY Retailing LITE Booking Fee
HIGH
TODAY
LOW
Data Source Internal
17
2005 Strategic Priorities
  • Grow Retail Revenue Across the Global Network
  • Direct and indirect
  • Hotel and packages
  • Expansion in Asia and Europe
  • Large and growing segments
  • Increase our presence
  • Leverage the Scale and Efficiency of the
    Distribution Business
  • Grow scale, reduce cost
  • Deliver Leading Scaled Technology
  • Innovate and differentiate
  • Shopping and pricing, corporate, leisure

18
2005 Financial EstimatesTotal Company
  • Total company revenue growth approaching 10
  • Total company earnings per share growth in the
    range of 2 to 9

Solid financial results while making well placed
investments for future growth
19
2005 Growth Projections
2004 Revenue (in millions)
2005 Growth Projections
Sabre Travel Network 1,553 Low Single Digits
Travelocity 503 25 - 30
Sabre Airline Solutions 243 10
Eliminations (168)
Total Revenue (net elims) 2,131 Approach 10
Earnings Per Share, Adjusted 1.47 1.50 - 1.60
Earnings Per Share, GAAP 1.38 1.41 - 1.51
20
Other Financial Projections and Capital Structure
  • Full year Adjusted EBITDA expected to be 400
    million
  • GAAP Net income of 190 million
  • Free cash flow expected to be 200 million
  • Cash flow from operations 300 million
  • Enhance shareholder return through dividends and
    share repurchases
  • Increased quarterly dividend 20 percent, to 0.09
    per share

21

In Summary
  • Superior Execution
  • Pursue Growth Opportunities
  • Manage Costs for the Long Term
  • Invest for the Future

22
Cautionary Statement
  • Statements in this presentation which are not
    purely historical facts or which necessarily
    depend upon future events, including statements
    about forecasted financial performance or other
    statements about anticipations, beliefs,
    expectations, hopes, intentions or strategies for
    the future, may be forward-looking statements
    within the meaning of Section 21E of the
    Securities Exchange Act of 1934, as amended.
    Readers are cautioned not to place undue reliance
    on forward-looking statements. All
    forward-looking statements are based upon
    information available to Sabre Holdings
    Corporation on the date of this presentation.
    Sabre Holdings Corporation undertakes no
    obligation to publicly update or revise any
    forward-looking statements, whether as a result
    of new information, future events or otherwise.
    Any forward-looking statements involve risks and
    uncertainties that could cause actual events or
    results to differ materially from the events or
    results described in the forward-looking
    statements, including risks or uncertainties
    related to the Company's revenues being highly
    dependent on the travel and transportation
    industries. Sabre Holdings Corporation may not
    succeed in addressing these and other risks.
    Further information regarding factors that could
    affect our financial and other results can be
    found in the risk factors section of Sabre
    Holdings Corporation's most recent filing on Form
    10-Q with the Securities and Exchange Commission.
  • References to non-GAAP financial statements and
    the reconciliation to GAAP can be found on the
    Sabre Holdings' website http//www.sabre-holdings.
    com/investor/highlights/index.html in the
    investor relations section.
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