Presentation Slides - Sabre
Presentation Slides - Sabre
Presentation Slides - Sabre
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Goldman SachsInternet ConferenceMichelle PelusoLas VegasMay 25, 2006C O N F I D E N T I A L
Travelocity 2005 Accomplishments• Acquired lastminute.com, significantly increasing scale and onlinepresence in Europe• Launched Travelocity’s Service Guarantee Program• Strong North America growth rates, significantly better than theindustry average• Achieved substantial share gains versus online agency competitors• Gross travel booked for the year of $7.4 billion – 51% growth• Full year global revenue of $830 million, growth of 65%• More than doubled full year operating income…..with more work to doC O N F I D E N T I A L3
Travelocity Growth UpdateGross Sales Growth(including International)80%70%60%76%67%59%50%40%30%20%19%27%35%30%31%24%10%0%Q4 04 Q1 05 Q2 05 Q3 05 Q4 05 Q1 06Expedia Inc. Cendant + Orbitz Travelocity excl. lastminute.com lastminute.com• In North America, Travelocity grew at 1.7 times the rate of competitors in 2005C O N F I D E N T I A L4
Travelocity Growth UpdateRevenue Growth(including International)110%100%90%80%70%60%50%40%30%20%10%0%-10%98%86%59%37%33% 30% 32%17% 28% 18%Q3 04 Q4 04 Q1 05 Q2 05 Q3 05 Q4 05 Q1 06Expedia Inc. Cendant + Orbitz Travelocity excl. lastminute.com lastminute.comC O N F I D E N T I A L5
We’ve Registered, and Continue to Drive, SizeableImprovements in Operating IncomeTravelocity Adjusted Operating Income*(in millions)Projection$130$95N. America$59MEurope($32M)~$110 - $120$60$25$(10)$13$27$(45)$(80)($55)2003A 2004A 2005A 2006FGAAP Operating Income 2003 ($100) 2004 ($21) 2005 ($3) 2006 ~$43 - $53*GAAP reconciliation in Appendix AC O N F I D E N T I A L6
1Q06 Results• Strong growth in global revenue and gross travel booked of 59%– North America revenue of $167 million, growth of 18% with transactionrevenue growth of 21%– Revenue from Europe of $67 million• Exceeded operating income targets for the North American business;below expectations in the European business• Continued to see benefit from effective marketing– Strong revenue growth in North America while keeping marketing spend flat• 3.2 million hotel room nights sold across the Travelocity network,growth of 54% y/y• Strong performance in Travelocity Business with bookings up 87% y/yC O N F I D E N T I A L7
lastminute.comC O N F I D E N T I A L8
Who is lastminute.com?Holidays• Over 250 tour operator relationshipsAirlines• Over 100 partnershipsHotels• Over 15,000 contracted relationshipsCar HireLifestyleSource: Broker’s Research• Over 150 worldwide relationships withmajors and national independents• More West-End theatre partners thanTicketmaster• Over 1,000 restaurant partnersC O N F I D E N T I A L9
A Strong Strategic Fit for TravelocityGeographic diversificationStrategic benefit5%BeforeInternationalRevenue Mixlastminute.com41%After• Creates the leadingposition in Europe• Global supplier valueproposition• Complementary supplierrelationships65%BeforeProduct diversificationNon-AirRevenue Mixlastminute.com77%After• Significant combinedbrand power• Strong managementteam• Excellent cultural fit andentrepreneurial spiritC O N F I D E N T I A L10
Status of lastminute.com IntegrationOpportunityStatusRevenueOpportunitiesLeverage best productsRefer customers between sites<strong>Sabre</strong> GDS conversionLaunch lastminute.com in U.S.Holiday Autos and Med Hotelsavailable through <strong>Sabre</strong> GDSTravelocity merchant hotels in Europe - 4Q05lastminute.com hotels on Travelocity.com by2Q06Currently in progressPartial conversion to be completed by 2Q06Began in 1Q06Expect to begin in 3Q06CostReductionOpportunitieslastminute.com cost reductionsRationalize marketing spendConsolidate technology platformsCall center consolidationSignificant cost reductions in G&ACurrently in progressCompleteFront-end integration in every countrycompleteU.K. complete and work underway acrossEuropeCurrently in progressC O N F I D E N T I A L11
Customer ChampionshipC O N F I D E N T I A L12
Becoming a ChampionBecoming aCustomer ChampionProactiveCustomer CareRight Content toRight Customer atRight TimeProvide a ComprehensiveTravel ExperienceQuality in Everything We DoDeliver Competitive PricingC O N F I D E N T I A L13
Guarantee and Bill of Rights are PostedProminently on Our Site …C O N F I D E N T I A L14
Results Are Encouraging225% increase280% increase1.61.61.21.20.80.80.40.40Customer Satisfaction0Brand PerceptionCustomers unaware of the GuaranteeCustomers aware of the GuaranteeC O N F I D E N T I A L15
Our Marketing Effectiveness Has ImprovedSignificantly%60Total unaided advertising awarenessMonthly RollingAvg. Base (600)Travelocity Expedia Hotels.comOrbitz Priceline Hotwire404239December: TVL 32%, EXP 30%, and ORB 22%34342021240DecJan/FebFeb/MarMar/AprApr/MayMay/JunJun/JulyJuly/AugAug/SepSep/OctOct/NovNov/DecDec/JanJan/FebFeb/MarMar/AprApr/MayMay/JunQ3 Which online travel sites have you seen or heard advertising for recently thinking both of more traditional places such as magazines, newspapers, ontelevision, radio, or billboards, as well as less traditional places like stickers, postcards, events, the Internet, etc..?= significant difference at 90% confidence level vs. previous monthC O N F I D E N T I A L16
2006 Priorities/Financial ProjectionsC O N F I D E N T I A L17
Travelocity 2006 Priorities• Grow profitability and cash flow– Top-line expansion– Ongoing cost reduction• Differentiate in North America by being the customers’champion every step of the way• Complete lastminute.com integration and drive operationalexcellence and profitability• Continue to lead on supplier relationships and marketingeffectiveness• Ensure each employee is passionate about Travelocity’ssuccessC O N F I D E N T I A L18
2006 Financial Projections*• Global revenue approaching $1.2 billion, ~ 40% growth• North America growth approaching 20%• Europe revenue of $410 - $420 million, >100% growth• Operating margin approaching 10%, adjusted• Operating margin mid-single digits, GAAP• Adjusted EBITDA and operating income more than tripling Y/Y• GAAP operating income of ~$50 million*Projections as of May 4th, 2006. We are not reiterating or updating our guidance.C O N F I D E N T I A L19
The EndC O N F I D E N T I A L20
Appendix A – Travelocity ReconciliationsTravelocity Operating Earnings Reconciliation2003 20042005 2006N.A. Europe Total Low HighGAAP Operating Income (loss) ($100) ($21) $52 ($55) ($3) $43 $53Add: Amortization of intangibles 42 28 6 22 28 54 54Add: stock compensation 8 5 1 - 1 13 13Add: facilities charge related to BU integration 4Less: recognition of deferred revenue on warrants (8)Adjusted Operating Income (Loss) ($55) $13 $59 ($32) $27 $110 $120Travelocity Adjusted EBITDA Reconciliation2006GAAP Operating Income 47Add: Amortization of intangibles 95Add: stock compensation 13Adjusted EBITDA >155*Beginning in 2006, definitions of certain non-GAAP financial measures including Adjusted Operating Income, Adjusted Net Earnings and Adjusted EBITDA have been revised toadjust for all stock compensation expenses recognized in accordance with FAS 123R. As a result, 2006 non-GAAP financial measures may not be directly comparable to similarlytitled financial measures for prior years. Definitions of 2006 and 2005 non-GAAP financial measures are available at http://www.sabreholdings.com/investor/index.html.C O N F I D E N T I A L21
Cautionary StatementStatements in this presentation which are not purely historical facts or which necessarilydepend upon future events, including statements about forecasted financial performance orother statements about anticipations, beliefs, expectations, hopes, intentions or strategies forthe future, may be forward-looking statements within the meaning of Section 21E of theSecurities Exchange Act of 1934, as amended. Readers are cautioned not to place unduereliance on forward-looking statements. All forward-looking statements are based uponinformation available to <strong>Sabre</strong> Holdings Corporation on the date of this presentation. <strong>Sabre</strong>Holdings Corporation undertakes no obligation to publicly update or revise any forward-lookingstatements, whether as a result of new information, future events or otherwise. Any forwardlookingstatements involve risks and uncertainties that could cause actual events or results todiffer 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 onthe travel and transportation industries. <strong>Sabre</strong> Holdings Corporation may not succeed inaddressing these and other risks. Further information regarding factors that could affect ourfinancial and other results can be found in the risk factors section of <strong>Sabre</strong> HoldingsCorporation's most recent filing on Form 10-K with the Securities and Exchange Commission.References to non-GAAP financial statements and the reconciliation to GAAP can be found onthe <strong>Sabre</strong> Holdings' website http://www.sabre-holdings.com/investor.C O N F I D E N T I A L22