SABR Q4 2021 Earnings

Call Details

• Call Title: Sabre Corporation Q4 2021 Earnings Call
• Date: February 15, 2022 at 2:00 PM UTC
• Management Team:
  • Kevin Crissey (Vice President of Investor Relations)
  • Sean Menke (Chief Executive Officer)
  • Kurt Ekert (President)
  • Doug Barnett (Chief Financial Officer)
  • Scott Wilson (President of Hospitality Solutions)

Call Summary

Financial Performance

• Total revenue in Q4 2021 was $501M versus $314M in Q4 2020, reflecting a material year-over-year improvement in travel volumes.
• Distribution revenue was $286M in Q4 2021 versus $131M in Q4 2020, and distribution bookings totaled $58M in the quarter.
• IT Solutions revenue was $165M in Q4 2021 versus $145M in Q4 2020, while passengers boarded totaled 129M, which the company reported as a 69% recovery versus Q4 2019.
• Hospitality solutions revenue was $54M in Q4 2021 versus $41M in Q4 2020, and central reservation system transactions were at 90% of 2019 levels totaling $23M in the quarter.
• EBITDA remained slightly negative in Q4 2021 despite meaningful year-over-year improvement, and free cash flow was negative $30M in the quarter driven by working capital seasonality.
• Cash balance at quarter end was $1.0B, and the sale of Air Center is expected to provide $393M of cash proceeds upon closing.

Guidance

• The 2022 outlook is scenario-based and not a point forecast, with examples keyed to Sabre Net Air Bookings recovery percentages versus 2019.
• The company expects free cash flow to turn positive in the second half of 2022 under a scenario of roughly 50% Sabre bookings recovery for the full year.
• By 2025, the company targets an EBITDA margin greater than 26% if Sabre GDS bookings return to 2019 levels and greater than 28% if bookings reach 120% of 2019.
• Targets and 2025 illustrations exclude Air Center, which the company expects to sell in Q1 2022, noting Air Center generated about $150M of revenue and $55M of EBITDA in 2019.
• The technology transformation incremental spend in 2022 is expected to be $45M versus 2021, or about $100M in total for the year, with tech spend declining thereafter.
• The company maintains a medium- to long-term leverage target of 2.5x to 3.5x net debt-to-LTM-adjusted EBITDA.