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Sabre Reports Quarterly and Full Year Financial Results

February 15, 2017 Financial No Comments Email Email

Global travel technology leader Sabre Corporation (NASDAQ: SABR) recently reported its fourth quarter and full year 2016 financial results, which also gave new CEO Sean Menke an opportunity to share with investors his view on the company’s focus and opportunities.http://indusatryclub.com.au/

Sabre reports results in two business segments:

  • Travel Network, a global travel marketplace that connects more than 425,000 travel agents in more than 160 countries with airlines, hotels, car hire, cruise lines, tour operators and other travel suppliers across the world. Sabre Travel Network is the leading global distribution service provider in Asia-Pacific, Latin America and North America
  • Airline and Hospitality Solutions, which provide technology software solutions to the global airline and hospitality industries.

Menke assumed the role of Sabre president and CEO on December 31, 2016, and the quarterly earnings call was his first opportunity to engage with investors, telling them that 2016 was another year of growth for Sabre, albeit slightly below expectations. Highlights included:

  • Fourth quarter revenue and adjusted earnings before interest, tax, depreciation and amortization (EBITDA) increased 9 percent, driven in part by global bookings strength that began in October and continued throughout the quarter in Travel Network, along with continued strong growth in Airline and Hospitality Solutions
  • Full year revenue growth was 14 percent, and full year adjusted EBITDA increased 11 percent while eclipsing the US$1 billion mark
  • Airline and Hospitality Solutions revenue improved 15 percent in the fourth quarter and 16.9 percent for the full year. Contributing to the rise in revenue was a 34.9 percent increase in airline passengers boarded through the SabreSonic reservation solution in 2016. Sabre Hospitality Solutions also demonstrated strong growth in 2016 with a 41.1 percent increase in revenue, driven by continued successful implementations for Wyndham Hotel Group and bringing its Ramada brand onto Sabre’s SynXis Central Reservations system in the quarter
  • Travel Network revenue grew 7.1 percent in the fourth quarter and 12.9 percent for the full year. Continued growth in every region of the world contributed to 5.2 percent bookings growth in the fourth quarter. Global booking share was 37.1 percent in 2016.

Among the global highlights from the fourth quarter:

  • China’s Hainan Aviation Group contracted for Sabre planning and scheduling solutions, SilkAir implemented our new Crew Management solution, and Aeroflot became Airline Solutions’ latest Revenue Optimizer customer
  • Travel Network global bookings grew 6.8 percent in Asia-Pacific, 6.5 percent in EMEA and 3.9 percent in Latin America
  • Alitalia, Italy’s flagship carrier, completed a seamless cutover to the SabreSonic passenger reservation system in the quarter, providing the airline with new tools to serve its customers and grow revenue.

“In 2016, we delivered a year of strong growth across all of our businesses,” said Menke. “Travel Network delivered key agency conversions and increased global share. Airline and Hospitality Solutions executed key implementations, resulting in strong overall revenue, profit and cash flow growth.

“We expect 2017 to be a year of growth, but also a year of investment,” added Menke. “We expect strong growth in Travel Network underpinned by good demand across the globe and a positive environment for travel.  We are also very excited about the rollout of the new Sabre Red Workspace platform for travel agents, which will provide innovative analytics and tools to help our agency customers grow their business, and we believe it will lead to more agency conversions.”

Menke also noted that Sabre’s growing software solutions business broke the US$1 billion revenue mark for the first time.  Airline Solutions highlights in 2016 included more than 789 million passengers boarded on airlines using its SabreSonic reservations system, which was boosted in the fourth quarter by the addition of Alitalia and growth across existing customers.  Hospitality Solutions continues to make excellent progress with over 3,300 Wyndham Hotel Group properties now live on Sabre’s property management solution, and in early February, Sabre announced a new global digital platform agreement with enterprise hotelier Carlson Rezidor, which has more than 1,400 existing properties and strong growth ambitions.

“We expect continued strong growth in Hospitality Solutions, bolstered by the January 2016 acquisition of the Trust Group that our expanded international footprint. We expect more modest growth in Airline Solutions,” said Menke. “To further modernize and enhance the efficiency, stability and security of our technology platforms for the future, we will accelerate investment in our core technology infrastructure this year, which we expect will set the stage for more opportunity and growth in the years ahead,” said Menke.

U.S.-based Sabre is headquartered in the greater Dallas-Fort Worth region of Texas and processes more than US$120 billion of travel spend annually, serving customers in more than 160 countries around the world.  It has nearly 10,000 employees globally.

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