Norwegian Cruise Line Holdings Ltd. · NYSE:NCLH
Norwegian Cruise Line — Q3 2024 Earnings Presentation
38 slides from Norwegian Cruise Line's earnings presentation, Oct 31, 2024
Slide 1: Q3 2024 Earnings Conference Call
Q3 2024 Earnings Conference Call - October 31, 2024
Slide 2: Forward Looking Statements
FORWARD LOOKING STATEMENTS Some of the statements, estimates or projections contained in this release are “forward-looking statements” within the meaning of the U.S. federal securities laws intended to qualify for the safe harbor from liability established by the Private Securities Litigation Reform
Slide 3: NCLH at a Glance
NCLH AT A GLANCE 19 Ships | ~56,000 Berths 7 Ships | ~6,300 Berths 6 Ships | ~4,100 Berths ~85% of annual bed days ~10% of annual bed days ~5% of annual bed days $9B+ ~$2.425B ~$1.65 2.9M 32 13 2024 Expected 2024 Expected 2024 Expected 2024 Expected Current Ships Current Ships Revenue Adj. EBITDA Ad
Slide 4: Q3 2024 Highlights
Q3 2 0 2 4 H i g h l i g h t s NET YIELD1 9.0% COMPARED TO 2023 ADJUSTED EBITDA MARGIN ADJUSTED NCC EX FUEL PER CAPACITY DAY 1 24% 34.5% vs 2023 to $931M LTM Adjusted Operational above guidance of ~$870M EBITDA Margin, up from 25.6% in Q3 2023 $155 Reduced Net $1 below guidance of ~$156 Leverage by
Slide 5: FY 2024 Guidance
FY 2024 G u i d a n c e Raised full-year guidance for fourth time on Net Yield, Adjusted EBITDA, & Adjusted EPS ~9.4% compared NET Record Net Yield ADJUSTED NCC EX FUEL YIELD 1 to 2023 Growth2 PER CAPACITY DAY 1 ADJUSTED EBITDA MARGIN ~$159 ~$2.425B ~35.3% excluding ~$5 Dry-dock impact would be Net
Slide 6: Meaningful Growth to Top & Bottom-Line Results Expected
MEANINGFUL GROWTH TO TOP & BOTTOM-LINE RESULTS EXPECTED Gross Capacity Growth (M)1 8 New Ships1 ~35,200 Berths 4% CAGR 6% CAGR 29.7 27.9 26.2 3 New Ships1 24.6 ~4,100 Berths 23.5 22.7 2 New Ships ~1,700 Berths 2 2023 2024E 2025E 2026E 2027E 2028E 2036E 1. An additional, effective, two ship order for
Slide 7: Newbuild & Fleet Update
NEWBUILD & FLEET UPDATE • Officially unveiled NCL’s next cutting- • Allura set to debut in July 2025. • Seven Seas Prestige celebrated edge vessel, the all-new Norwegian steel cutting at the Fincantieri- Luna. The sister ship to the Aqua will • Allura is the brand’s 8th vessel Marghera Shipyard in V
Slide 8: Enhancing Offerings and Partnerships
ENHANCING OFFERINGS AND PARTNERSHIPS NCL ‘Experience More at Sea’ NCL + NHL Partnership Oceania ‘Your World Included’ • NCL’s brand promise is centered around • Announced a multi-year U.S. • Oceania’s new brand value promise empowering guests to have More of what partnership with the National Hockey
Slide 9: Booking & Yield Update
BOOKING & YIELD UPDATE Booking Trends Net Yield Growth1 • Company at upper range of optimal booked position 16.2% • Bookings in the quarter predominantly for 2025 sailings Net Yield Update1 • Beat Q3 2024 Net Yield guidance by 260 bps, 9.4% 9.0% growing 9.0%, driven by strong performance in Alaska a
Slide 10: Cash Generation Engine Fueled by Record Advance Ticket Sales
CASH GENERATION ENGINE FUELED BY RECORD ADVANCE TICKET SALES Total Advance Ticket Sales ($B) $4.0 ATS Growth Drivers $3.5 + Robust pricing $3.0 + Dynamic $2.5 deployment mix $2.0 + Enhanced pre-sold onboard revenue $1.5 + Capacity growth $1.0 $0.5 $0.0 Q3 18 Q3 19 Q3 20 Q3 21 Q3 22 Q3 23 Q3 24 Advan
Slide 11: Recognition of ESG Efforts
RECOGNITION OF ESG EFFORTS RELAY FOR LIFE AT SEA NCLH received ESG Leader – Relay For Life at Sea was successfully Gold Award from ESG Shipping launched on Oceania’s Insignia and Vista. Awards International 2024, honoring outstanding This initiative focuses on guest and crew achievements and innovat
Slide 12: Q3 2024 Results Overview
Q3 2024 RESULTS OVERVIEW 3Q 2024 ACTUALS VS GUIDANCE GUIDANCE Occupancy ~108.2% 108.1% ✓ Net Yield1 ~6.4% 9.0% Growth ~$329 $337 ✓ ~3.4% 2.6% Adjusted Net Cruise Cost ex. Fuel per Capacity Day1 3.6% excluding Dry-dock ~$156 2.9% excluding Dry-dock $155 ✓ Including minimal Dry-dock Including minimal
Slide 13: Q4 & FY 2024 Guidance Overview
Q4 & FY 2024 GUIDANCE OVERVIEW Q4 2024 FULL YEAR 2024 GUIDANCE GUIDANCE Occupancy ~101.0% ~105.0% Net Yield1 Growth ~6.9% ~9.4% ~2.7% ~3.4% Adjusted Net Cruise Cost ~(1.1%) excluding Dry-dock ~0.5% excluding Dry-dock ex. Fuel per Capacity Day1 ~$155 ~$159 Including ~$6 Dry-dock Including ~$5 Dry-doc
Slide 14: Raising Full Year 2024 Guidance for a Fourth Time
RAISING FULL YEAR 2024 GUIDANCE FOR A FOURTH TIME INITIAL FEBRUARY GUIDANCE NEW GUIDANCE CHANGE Net Yield 1 Growth ~5.4% ~9.4% +~400bps Adjusted Net Cruise Cost ex. Fuel per Capacity Day 1 ~$159 ✓ ~$159 - Adjusted EBITDA ~$2.200B ~$2.425B +~$225M Adjusted EPS 2 ~$1.23 ~$1.65 +~$0.42 34.1% In
Slide 15: Ongoing Margin Enhancement Initiative
ONGOING MARGIN ENHANCEMENT INITIATIVE Targeted Cost Savings1,2 • Ongoing margin enhancement initiative remains a top priority. Focus is on both maximizing revenue ~$155 opportunities and rightsizing cost base • 2024 Adjusted NCC ex. Fuel per Capacity Day expected to be essentially flat versus 2023 w
Slide 16: Adj. Operational EBITDA Margin Improvement
ADJ. OPERATIONAL EBITDA MARGIN IMPROVEMENT Adj. Operational EBITDA Margin1 • Q3 LTM Adj. Operational EBITDA Margin improvement to 34.5% • Full year Adj. Operational EBITDA ~35.3% Margin expected to improve ~460bps +~460 +~900 bps 34.5% bps to 35.3% versus prior year • Margin improvements driven by s
Slide 17: Executing Strategic Liability Management Plan
EXECUTING STRATEGIC LIABILITY MANAGEMENT PLAN DEBT COMPOSITION Highlights • Refinanced $315 million of Notes due December 2024 with 6.250% unsecured Notes due 2030. Remaining balance of ~$13.7B TOTAL DEBT 1 $250 million to be paid at maturity. • Expect continued shift towards favorable Export Credit
Slide 18: Manageable Debt Maturity Profile
MANAGEABLE DEBT MATURITY PROFILE As of 9/30/20241 ($ billions) Expected to be refinanced prior to maturity 3 $3.3 Expected to be settled in shares 3 Expected to be paid at maturity 3 $1.7 $0.9 $0.8 $0.3 2024 2 2025 2 2026 2 2027 2028 ECA Loans, Capital Leases & Other Senior Secured Notes Exchangeabl
Slide 19: Focused on De-Risking and Reducing Leverage
FOCUSED ON DE-RISKING AND REDUCING LEVERAGE Net Leverage Reduction1 Continuing down our path of de-risking balance sheet - reduced Net Leverage by ~1.75x 9.0x from year end Expect to end 2024 at 7.3x ~5.4x Net Leverage 6.3x 5.9x Expect significant organic 5.6x reduction in Net Leverage ~5.4x from cu
Slide 20: Executing on Our Strategy
EXECUTING ON OUR STRATEGY PEOPLE GUEST-CENTRIC LONG-TERM EXCEPTIONAL EXCELLENCE PRODUCT OFFERING GROWTH PLATFORM PERFORMANCE STRONG 2026 FINANCIAL TARGETS Adj. Operational Adj. EPS Net Leverage Adj. ROIC EBITDA Margin ~39% ~$2.45 Mid 4x 12% Approaching >30% CAGR Strengthening the Record levels histo
Slide 21: Appendix
APPENDIX 21
Slide 22: Fleet Expansion Details
FLEET EXPANSION DETAILS YEAR BRAND DETAIL GROSS TONS 1 BERTHS 1 2025 Norwegian Cruise Line Norwegian Aqua ~156,000 ~3,550 2025 Oceania Cruises Allura ~68,000 ~1,250 2026 Norwegian Cruise Line Norwegian Luna ~156,000 ~3,550 2026 Regent Seven Seas Seven Seas Prestige2 ~77,000 ~850 2027 Norwegian Cruis
Slide 23: NCLH Deployment Mix - 2024
NCLH DEPLOYMENT MIX - 2024 2024 Variance vs 2023 Q1 Q2 Q3 Q4 FY Q1 Q2 Q3 Q4 FY Alaska 0% 17% 20% 4% 10% Alaska 0% 0% (3%) (0%) (1%) Asia/Africa/Pacific 16% 5% 3% 12% 9% Asia/Africa/Pacific 8% 3% 2% 1% 3% Bermuda 2% 10% 6% 3% 5% Bermuda (1%) (1%) (1%) (1%) (1%) Caribbean 58% 18% 8% 30% 28% Caribbean
Slide 24: NCLH Deployment Mix - 2025
NCLH DEPLOYMENT MIX - 2025 2025 Variance vs 2024 Q1 Q2 Q3 Q4 FY Q1 Q2 Q3 Q4 FY Alaska 0% 18% 22% 3% 11% Alaska 0% 1% 2% (1%) 1% Asia/Africa/Pacific 18% 11% 6% 11% 12% Asia/Africa/Pacific 2% 6% 3% (0%) 3% Bermuda 0% 8% 8% 0% 4% Bermuda (1%) (1%) 2% (3%) (1%) Caribbean1 53% 18% 9% 37% 29% Caribbean (5
Slide 25: Outlook
OUTLOOK $ Millions unless otherwise noted Q4 2024 FY 2024 Depreciation & Amortization ~$230M ~$895M Interest Expense, net1 ~$175M ~$720M Non-Newbuild Capital Expenditures ~$142M ~$575M Fuel Consumption (metric tons) ~246,000 ~995,000 Fuel Price Per Metric Ton (net of hedges) ~$700 ~$714 $ Billions u
Slide 26: Fuel Hedge Program
FUEL HEDGE PROGRAM NCLH FUEL HEDGE PROGRAM AS OF 10/29/2024 2024 2025 2026 % of HFO Consumption Hedged1 40% 46% 20% Blended HFO Hedge Price / Metric Ton ~$397 ~$410 ~$373 Hedge program in place to provide partial protection % of MGO Consumption Hedged 62% 54% 22% from fuel price volatility Blended M
Slide 27: Illustrative Diluted Share Count Modeling
ILLUSTRATIVE DILUTED SHARE COUNT MODELING Q4 2024 FULL YEAR 2024 FULL YEAR 2025 Interest Interest Shares (m)1 Interest GAAP Net Shares (m)1 GAAP Net Shares (m)1 GAAP Net Expense Expense Expense Income (Loss) Income (Loss) Income (Loss) Reduction2 Reduction2 Reduction2 ($m) Basic Diluted ($m) Basic D
Slide 28: Definitions and Non-GAAP Information and Reconciliation
DEFINITIONS AND NON-GAAP INFORMATION AND RECONCILIATION 28
Slide 29: Non-GAAP Financial Measures Notice
Non-GAAP financial measures should not be used as a substitute for GAAP financial measures, or considered in isolation, for the purpose of analyzing operating performance, financial position or cash flows. The Company does not provide certain estimated future results on a GAAP basis because the Comp
Slide 30: Definitions
DEFINITIONS Adjusted EBITDA. EBITDA adjusted for other income (expense), net and other Constant Currency. A calculation whereby foreign currency-denominated supplemental adjustments. revenues and expenses in a period are converted at the U.S. dollar exchange rate of a comparable period in order to e
Slide 31: Non-GAAP Reconciling Information
NON-GAAP RECONCILING INFORMATION Adjusted EPS was calculated as follows Three Months Ended Three Months Ended (UNAUDITED) (in thousands, except share and per share data): September 30, 2024 September 30, 2023 Net income $474,932 $345,868 Effect of dilutive securities - exchangeable notes $14,965 $17
Slide 32: Non-GAAP Reconciling Information
NON-GAAP RECONCILING INFORMATION (UNAUDITED) Adjusted Gross Margin, Net Per Diem, and Net Yield were calculated as Three Months Ended Constant Currency Three Months Ended follows September 30, 2024 compared to 2023 September 30, 2023 (in thousands, except Passenger Cruise Days and Net Per Diem Data)
Slide 33: Non-GAAP Reconciling Information
NON-GAAP RECONCILING INFORMATION (UNAUDITED) Adjusted Gross Margin, Net Per Diem, and Net Yield were calculated as Three Months Ended Constant Currency Three Months Ended follows June 30, 2024 compared to 2023 June 30, 2023 (in thousands, except Passenger Cruise Days and Net Per Diem Data): Total re
Slide 34: Non-GAAP Reconciling Information
NON-GAAP RECONCILING INFORMATION (UNAUDITED) Adjusted Gross Margin, Net Per Diem, and Net Yield were calculated as Three Months Ended Constant Currency Three Months Ended follows Mar. 31, 2024 compared to 2023 Mar. 31, 2023 (in thousands, except Passenger Cruise Days and Net Per Diem Data): Total re
Slide 35: Non-GAAP Reconciling Information
NON-GAAP RECONCILING INFORMATION (UNAUDITED) Gross Cruise Cost, Net Cruise Cost, Net Cruise Cost Excluding Fuel and Adjusted Net Three Months Ended Constant Currency Three Months Ended Cruise Cost Excluding Fuel were calculated as follows September 30, 2024 compared to 2023 September 30, 2023 (in th
Slide 36: Non-GAAP Reconciling Information
NON-GAAP RECONCILING INFORMATION (UNAUDITED) Gross Cruise Cost, Net Cruise Cost, Net Cruise Cost Excluding Fuel and Adjusted Net Cruise Cost Three Months Ended Three Months Ended Twelve Months Ended Excluding Fuel were calculated as follows September 30, 2022 September 30, 2023 December 31, 2023 (in
Slide 37: Non-GAAP Reconciling Information
NON-GAAP RECONCILING INFORMATION (UNAUDITED) Twelve Months Ended, Adjusted EBITDA is calculated as follows September 30, 2023 December 31, 2023 March 31, 2024 June 30, 2024 September 30, 2024 (in thousands): Net income (loss) ($209,817) $166,178 $342,852 $420,172 $549,236 Interest expense, net 707,2
Slide 38: Non-GAAP Reconciling Information
NON-GAAP RECONCILING INFORMATION (UNAUDITED) Twelve Months Ended, Net Debt and Net Leverage were calculated as September 30, 2023 December 31, 2023 March 31, 2024 June 30, 2024 September 30, 2024 follows Long-term debt $12,634,609 $12,314,147 $12,005,296 $11,913,073 $11,751,743 Current portion of lo
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