Norwegian Cruise Line Holdings Ltd. · NYSE:NCLH
Norwegian Cruise Line — Q4 2022 Earnings Presentation
35 slides from Norwegian Cruise Line's earnings presentation, Feb 28, 2023
Slide 1: Fourth Quarter and Full Year 2022 Earnings Conference Call
FOURTH QUARTER AND FULL YEAR 2022 EARNINGS CONFERENCE CALL February 28, 2023
Slide 2: Forward Looking Statements
FORWARD LOOKING STATEMENTS Some of the statements, estimates or projections contained in this presentation 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 R
Slide 3: NCLH Overview
NCLH OVERVIEW 1966 29 60,000+ Year Founded Ships in Fleet Berths 8 20,000+ ~500 Ships on Berths on Global Order Order Destinations Visited ~39,000 ~2.7M 2 Team Expected Guests Luxurious Private Members Carried in 2023 Island Destinations 3
Slide 4: Key Events Since Q3 2022 Earnings Call
KEY EVENTS SINCE Q3 2022 EARNINGS CALL Norwegian Cruise Line announced November was a record-breaking month, achieving a record day, week and month of sales Dec 6 boosted by the Black Friday and Cyber Monday holiday push. Oceania Cruises announced that it would accelerate the debut of its new ship V
Slide 5: 2022 Highlights
2022 HIGHLIGHTS ✓ First major cruise operator to return ✓ Delivered exceptional vacation ✓ Reached several key financial its entire fleet back to service in May experiences to ~1.7 million guests milestones including generating 2022, capping the Great Cruise positive Operating Cash Flow, ✓ Ended the
Slide 6: What's on the Horizon
WHAT'S ON THE HORIZON Target upmarket consumer remains healthy and resilient CONTINUED STRENGTH with continued desire for travel and experiences and IN TARGET CONSUMER accumulated wealth during the pandemic Focused on strengthening the foundation for sustained, STRATEGIC ACTIONS TO profitable growth
Slide 7: Three New World-Class Vessels to Join Fleet in 2023
THREE NEW WORLD-CLASS VESSELS TO JOIN FLEET IN 2023 May 2023 August 2023 November 2023 7
Slide 8: Meaningful Growth Potential to Top and Bottom-Line Results
MEANINGFUL GROWTH POTENTIAL TO TOP AND BOTTOM-LINE RESULTS Capacity Days (M) Capacity Growth: ~50% 29.2 FY 2023 Growth: 19% 27.7 26.6 YE 2023 Annualized2: 24% 24.8 23.8 22.8 19.2 17.6 2019 2022 2023E 2024E 2025E 2026E 2027E 2028E # Ships 27 29 32 32 34 35 36 37 Next Generation Next Generation Organi
Slide 9: Phased & Disciplined Voyage Resumption
PHASED & DISCIPLINED VOYAGE RESUMPTION Sequential Increase in Occupancy Occupancy Gap Narrowing vs. 2019 Expect return Q1 2022 Q2 2022 Q3 2022 Q4 2022 Q1 2023E to historical occupancy ~100% ~(5)% ~87% ~81% ~(18)% ~65% ~(30)% ~48% ~(44)% ~(57)% Q1 2022 Q2 2022 Q3 2022 Q4 2022 Q1 2023E Q2 2023E Contin
Slide 10: Pricing & Pricing Growth Continues to Outperform
PRICING & PRICING GROWTH CONTINUES TO OUTPERFORM 4Q 2022 Pricing Growth vs 2019 FY 2022 Pricing Growth vs 2019 14% 13% +14% +13% (0)% (0)% NCLH Peers Publicly Traded NCLH Peers Publicly Traded Peers Peers Stellar pricing growth in both the fourth quarter and full year 2022 Note: Percentages presente
Slide 11: Booking Trends Update
BOOKING TRENDS UPDATE ◼ 2023 cumulative booked position is ahead of 2019 levels and at higher pricing.1 ◼ Booking volumes have accelerated in recent months buoyed by strong WAVE season demand and continue to be at the pace needed to return to historical Occupancy levels for second quarter of 2023 an
Slide 12: 4Q 2022 Results Overview
4Q 2022 RESULTS OVERVIEW 4Q 2022 Vs. Actuals Guidance Guidance Mid to high 80% Occupancy ~87% range Total Revenue $1.4-$1.5 billion $1.5 billion Total Revenue per ↑ 20% vs 2019 ↑ ~24% vs 20191 Passenger Cruise Day Adjusted Net Cruise Cost ex. ↓ ~10% in 2H22 ↓ ~10% in 2H22 Fuel per Capacity Day vs 1H
Slide 13: Key Financial Recovery Milestones
KEY FINANCIAL RECOVERY MILESTONES 2021 2022 Q1 Q2 Q3 Q4 1 3 6 Positive Positive ship Positive contribution 2 contribution 4 Adjusted Free from fleet in fleetwide and Cash Flow1 operation in Q3 Positive Operating Cash Positive Adjusted For quarter Operating Cash Flow for quarter EBITDA achieved Flow
Slide 14: 2023 Guidance Overview
2023 GUIDANCE OVERVIEW 1Q 2023 FY 2023 Guidance Guidance Occupancy Approx. 100% Approx. 103.5% Net Per Diem 6.25% to 7.25% as-reported 8.75% to 10.25% as-reported Growth vs. 2019 6.75% to 7.75% constant currency 9.0% to 10.5% constant currency Net Yield 0.75% to 1.75% as-reported 4.75% to 6.25% as-r
Slide 15: Manageable Debt Maturity Profile
MANAGEABLE DEBT MATURITY PROFILE As of 12/31/20221 ($ billions) Facilities typically would be refinanced prior to maturity $3.1 $2.4 $2.0 $1.9 $1.0 2023 2024 2025 2026 2027 ECA Loans, Capital Leases & Other Senior Unsecured Notes Senior Secured Notes Exchangeable Notes Term Loan A Revolving Credit F
Slide 16: Recent Transaction Overview
RECENT TRANSACTION OVERVIEW ▪ In December 2022, amended and extended ~$1.4 billion of the Operating Credit Facility by one year to January 2025.1 Addressed ▪ In February 2023, issued $600 million of 8.375% senior secured notes due 2028. Proceeds were used to refinance all of the non-extended term lo
Slide 17: Liquidity Position
LIQUIDITY POSITION ◼ Proforma for the February amendment, quarter-end liquidity position was approximately $1.8 billion, including an approximately $650 undrawn commitment. ◼ Does not include $300 million backstop facility which enhances future liquidity but is not currently available to draw.1 ◼ To
Slide 18: Medium and Long-Term Financial Strategy
MEDIUM AND LONG-TERM FINANCIAL STRATEGY 1 2 3 Rebuild and Improve Maximize Cash Flow Optimize Margins Generation Balance Sheet ▪ Gradual return to pre-COVID ▪ Introduce robust growth profile ▪ Maintain sufficient liquidity margin levels of ROIC and cash flow to weather extended accretive vessels in
Slide 19: 2022 ESG Highlights
2022 ESG HIGHLIGHTS Driving a positive impact on society and the environment Reducing Operating with Empowering Strengthening Environmental Sailing Safely Integrity & People Communities Impact Accountability Pursuing Net Zero Continued to evolve Employed ~39,000 $100K to Save the 50% of director sea
Slide 20: Key Takeaways
KEY TAKEAWAYS •Continue to see a healthy & resilient consumer in our target high-end demographic •Booking momentum is positive, buoyed by a strong WAVE season, which is reflected in our strong booked position and record pricing for 2023 •Taking strategic measures to strengthen the foundation for sus
Slide 21: Appendix
APPENDIX NORWEGIAN CRUISE LINE BES HoLpinGs LTD.
Slide 22: NCLH 2023 Deployment Mix
NCLH 2023 DEPLOYMENT MIX 2023 Variance vs 2019 Q1 Q2 Q3 Q4 FY Q1 Q2 Q3 Q4 FY Alaska 0% 17% 23% 5% 11% Alaska - 4% 2% 4% 3% Asia/Africa/Pacific 9% 2% 1% 11% 6% Asia/Africa/Pacific (1%) (1%) 1% 5% 1% Bermuda 2% 11% 7% 5% 6% Bermuda 2% (2%) (2%) 1% - Caribbean 54% 20% 6% 25% 26% Caribbean (6%) (6%) (12
Slide 23: Outlook
OUTLOOK $ Millions unless otherwise noted Q1 2023 FY 2023 Depreciation & Amortization $200M $830M Run-Rate Interest Expense, net1 $175M $730M Non-Newbuild Capital Expenditures $115M $450M Fuel Consumption (metric tons) 255,000 985,000 Fuel Price Per Metric Ton (net of hedges) $755 $690 $ Billions un
Slide 24: Fuel Hedge Program
FUEL HEDGE PROGRAM NCLH Fuel Hedge Program as of 12/31/22 2023 % of HFO Consumption Hedged1 29% Blended HFO Hedge Price / Metric Ton ~$572 % of MGO Consumption Hedged 70% Blended MGO Hedge Price / Metric Ton ~$692 Total % of Consumption Hedged 50% Hedge program in place to provide partial protection
Slide 25: Illustrative Share Count Scenario
ILLUSTRATIVE SHARE COUNT SCENARIO Illustrative Diluted Share Count Shares Outstanding (as of 12/31/22) 421,413,565 RSUs and Options Outstanding (as of 14,302,157 12/31/22) 6% Exchangeable Notes due 2024 10,661,894 Must be settled in shares 5.375% Exchangeable Notes due 2025 23,999,985 1.125% Exchang
Slide 26: Cash Generation Engine Fueled by Advance Ticket Sales
CASH GENERATION ENGINE FUELED BY ADVANCE TICKET SALES Total Advance Ticket Sales ($B) Quarterly Gross Advance Ticket Sales Build ($M) $3.0 $1,800 $1,600 $2.5 $1,400 $2.0 $1,200 $1,000 $1.5 $800 $1.0 $600 $400 $0.5 $200 $- $0.0 1Q20 2Q20 3Q20 4Q20 1Q21 2Q21 3Q21 4Q21 1Q22 2Q22 3Q22 4Q22 1Q18 2Q18 3Q1
Slide 27: Definitions and Non-GAAP Information and Reconciliations
DEFINITIONS AND NON-GAAP INFORMATION AND RECONCILIATIONS
Slide 28: Non-GAAP financial measures should not be used as a substitute for GAAP
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 29: Definitions
DEFINITIONS Adjusted EBITDA. EBITDA adjusted for other income (expense), net and other supplemental adjustments. Adjusted Free Cash Flow. Free Cash Flow adjusted for proceeds from ship construction financing facilities and other supplemental adjustments. Adjusted Gross Margin. Gross margin adjusted
Slide 30: Non-GAAP Reconciling Information
NON-GAAP RECONCILING INFORMATION (UNAUDITED) Adjusted EBITDA 1 is calculated as follows Six Months Ended (in thousands): Dec. 31, 2022 Net loss ($777,874) Interest expense, net 329,450 Income tax (benefit) expense (10,320) Depreciation and amortization expense 388,663 EBITDA (70,081) Other (income)
Slide 31: Non-GAAP Reconciling Information
NON-GAAP RECONCILING INFORMATION (UNAUDITED) Net Per Diem is calculated as follows Three Months Ended Three Months Ended (in thousands, except Passenger Cruise Days and Net Per Diem Data): Dec. 31, 2022 Dec. 31, 2019 Total revenue $1,519,129 $1,480,618 Less: Total cruise operating expense 1,219,459
Slide 32: Non-GAAP Reconciling Information
NON-GAAP RECONCILING INFORMATION (UNAUDITED) Net Per Diem is calculated as follows Year Ended Year Ended (in thousands, except Passenger Cruise Days and Net Per Diem Data): Dec. 31, 2022 Dec. 31, 2019 Total revenue $4,843,760 $6,462,376 Less: Total cruise operating expense 4,267,086 3,663,261 Less:
Slide 33: 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 Excluding Fuel were calculated as follows Dec. 31, 2022 Dec. 31, 2019 (in thousands, except Capacity Days and per Capacit
Slide 34: 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 Six Months Ended Excluding Fuel were calculated as follows Dec. 31, 2022 (in thousands, except Capacity Days and per Capacity Day data): Total cruise operating
Slide 35: Non-GAAP Reconciling Information
NON-GAAP RECONCILING INFORMATION (UNAUDITED) Free Cash Flow and Adjusted Free Cash Flow were calculated as follows Three Months Ended (in thousands): Dec. 31, 2022 Net cash used in investing activities ($164,418) Net cash provided by financing activities ($311,909) Net cash provided by operating act
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