Norwegian Cruise Line Holdings Ltd. · NYSE:NCLH
Norwegian Cruise Line — Q1 2024 Earnings Presentation
31 slides from Norwegian Cruise Line's earnings presentation, May 1, 2024
Slide 1: First Quarter 2024 Earnings Conference Call
FIRST QUARTER 2024 EARNINGS CONFERENCE CALL May 1, 2024
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 32 ~66,500 Year Founded Ships in Fleet Berths 13 ~41,000 ~700 Ships on Berths on Global Order1 Order1 Destinations Visited ~41,000 ~2.9M 2 Team Expected Guests Luxurious Private Members Carried in 2024 Island Destinations (1) Norwegian Cruise Line Holdings Ltd. expects a four ship
Slide 4: Q1 2024 Highlights
Q1 2024 HIGHLIGHTS • Continued strong demand with record bookings in the quarter and 12-month forward booked position at all-time-highs • Adjusted EBITDA almost doubled and Last Twelve Month Adjusted Operational EBITDA Margin improved to 32.7% • Reduced Net Leverage by one full turn, ending quarter
Slide 5: Near Term Priorities
NEAR TERM PRIORITIES Capacity growth increased 8% in Q1 2024 compared to Q1 2023 while CAPITALIZE ON HEALTHY DEMAND achieving an all-time high booked position and increasing pricing. ENVIRONMENT Maximize onboard revenue generation by capturing more guest spend prior to sailing through selling more p
Slide 6: Meaningful Growth to Top and Bottom-Line Results Expected
MEANINGFUL GROWTH TO TOP AND BOTTOM-LINE RESULTS EXPECTED Gross Capacity Growth (M)1 1 4% 4 New Class CAGR ~20,000 berths 4 Prima Class 6% ~14,500 berths CAGR 29.7 28.0 26.2 24.5 22.7 23.5 2 New Class 1 ~2,900 berths 1 Allura Class ~1,200 berths 2023 2024E 2025E 2026E 2027E 2028E 2 2036E 2 New Class
Slide 7: Booking Trends Update
BOOKING TRENDS UPDATE The Company continues to experience strong consumer demand. Q1 2024 had record bookings in the quarter, driving a continued all- time-high 12-month-forward booked position. Q1 2024 experienced healthy Net Yield growth of 16.2% on a Constant Currency basis compared to 2023. Nort
Slide 8: Cash Generation Engine Fueled by Advance Ticket Sales
CASH GENERATION ENGINE FUELED BY ADVANCE TICKET SALES Total Advance Ticket Sales ($B) $4.0 ATS Growth Drivers + Robust pricing $3.5 + Dynamic deployment mix $3.0 + Enhanced pre-sold $2.5 onboard revenue $2.0 + Capacity growth $1.5 $1.0 $0.5 $0.0 Q1 18 Q1 19 Q1 20 Q1 21 Q1 22 Q1 23 Q1 24 Advanced tic
Slide 9: Sustainability Highlights – Q1 2024
SUSTAINABILITY HIGHLIGHTS – Q1 2024 • Applied to the EU Innovation Fund for support in accelerating the transition for a ship from “methanol-ready” to “methanol-capable” status1 • Achieved 2024 shore power target early with 50% of fleet now equipped with technology • Received a ‘B’ rating from CDP C
Slide 10: Q1 2024 Results Overview
Q1 2024 RESULTS OVERVIEW 1Q 2024 Actuals Vs Guidance Guidance Occupancy ~104.8% ~104.6% ✓ Net Yield2 ~15.5% ~16.2% Growth ~$276 ~$277 ✓ Adjusted Net Cruise Cost ~3.2% ~3.0% ex. Fuel per Capacity Day2 ~$165 ~$164 ✓ Adjusted EBITDA ~$450 million ~$464 million ✓ Adjusted Net Income ~$50 million ~$70 mi
Slide 11: Q2 & FY 2024 Guidance Overview
Q2 & FY 2024 GUIDANCE OVERVIEW Q2 2024 Full Year 2024 Guidance Previous Guidance New Guidance Occupancy ~105.7% ~105.1% ✓ ~105.1% Net Yield2 ~4.3% ~5.4% ~6.4% Growth Adjusted Net Cruise Cost ~5.8% ~3.4% ~3.4% ex. Fuel per Capacity Day2 ~$165 ~$159 ✓ ~$159 Adjusted EBITDA ~$555 million ~$2.20 billion
Slide 12: 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 opportunities and rightsizing cost base $249 Q1 2024 Adjusted NCCs ex-fuel per Capacity Day was $8 essentially flat compared to Q1 2023 whe
Slide 13: Adj. Operational EBITDA Margin Improvement
ADJ. OPERATIONAL EBITDA MARGIN IMPROVEMENT LTM Adj. Operational EBITDA Margin1 LTM Adjusted Operational EBITDA Margin 32.7% ~33.5% improvement to 32.7% 30.7% 25.6% Margin improvements driven by strong revenue cost savings initiatives: 14.6% Net Yield up 6.4% for full year Adjusted Net Cruise Costs e
Slide 14: Manageable Debt Maturity Profile
MANAGEABLE DEBT MATURITY PROFILE As of 3/31/20241 ($ billions) Expected to be refinanced prior Expected to be $3.3 refinanced prior to Expected to be to maturity 3 December maturity 3 settled in shares 3 $1.7 $0.9 $0.9 $0.8 2 2024 2025 2 2026 2027 2028 ECA Loans, Capital Leases & Other Senior Secure
Slide 15: Focused on De-Risking and Reducing Leverage
FOCUSED ON DE-RISKING AND REDUCING LEVERAGE Net Leverage Reduction1 7.3x 1 full turn Net Leverage reduction from year end to first quarter 2024 6.3x Expect significant organic reduction in Net Leverage from current levels driven by ongoing cash generation & scheduled amortization payments Q4 23 Q1 2
Slide 16: Key Takeaways
KEY TAKEAWAYS Capitalizing on demand RIGHTSIZE COST BASE BALANCE SHEET Began 2024 focusing on execution STRATEGIC Demonstrated progress on our ASSESSMENT Strong liquidity position, reduce of near-term priorities. Continue to ongoing margin enhancement leverage and restore balance Complete strategic
Slide 17: Appendix
NORWEGIAN CRUISE LINE pS) HOLDINGS LTD APPENDIX
Slide 18: Fleet Expansion Detail
FLEET EXPANSION DETAIL Year Brand Detail Gross Tons1 Berths1 2025 Norwegian Cruise Line Norwegian Aqua ~156,000 ~3,550 2025 Oceania Cruises Allura ~68,000 ~1,250 2026 Norwegian Cruise Line Next Generation Norwegian Prima Class ~156,000 ~3,550 2026 Regent Seven Seas New Class2 ~77,000 ~850 Next Gener
Slide 19: NCLH Deployment Mix
NCLH DEPLOYMENT MIX 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 3% (2%)
Slide 20: Outlook
OUTLOOK $ Millions unless otherwise noted Q2 2024 FY 2024 Depreciation & Amortization $225M $895M Run-Rate Interest Expense, net1 $185M $740M Non-Newbuild Capital Expenditures $140M $575M Fuel Consumption (metric tons) 245,000 995,000 Fuel Price Per Metric Ton (net of hedges) $675 $705 $ Billions un
Slide 21: Fuel Hedge Program
FUEL HEDGE PROGRAM NCLH Fuel Hedge Program as of 3/31/2024 2024 2025 % of HFO Consumption Hedged1 35% 22% Blended HFO Hedge Price / Metric Ton ~$395 ~$402 % of MGO Consumption Hedged 74% 23% Blended MGO Hedge Price / Metric Ton ~$746 ~$738 Total % of Consumption Hedged 55% 22% Hedge program in place
Slide 22: Illustrative Diluted Share Count Modeling
ILLUSTRATIVE DILUTED SHARE COUNT MODELING Q2 2024 Full Year 2024 Shares (m)1 Interest Shares (m)1 Interest Expense Expense GAAP Net Income (Loss) Reduction2 GAAP Net Income (Loss) Reduction2 Basic Diluted ($m) Basic Diluted ($m) ($m) ($m) Net Loss ~435 ~435 $0 Net Loss ~435 ~435 $0 Up to $58 ~435 ~4
Slide 23: Definitions and Non-GAAP Information and Reconciliation
DEFINITIONS AND NON-GAAP INFORMATION AND RECONCILIATION 23
Slide 24: 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 25: Definitions
DEFINITIONS Adjusted EBITDA. EBITDA adjusted for other income (expense), net and other supplemental adjustments. Adjusted EPS. Adjusted Net Income (Loss) divided by the number of diluted weighted-average shares outstanding. Adjusted Gross Margin. Gross margin adjusted for payroll and related, fuel,
Slide 26: Non-GAAP Reconciling Information
NON-GAAP RECONCILING INFORMATION (UNAUDITED) Adjusted EPS was calculated as follows Three Months Ended Three Months Ended (in thousands, except share and per share data): Mar. 31, 2024 Mar. 31, 2023 Net income (loss) $17,353 ($159,321) Non-cash deferred compensation 1,233 1,010 Non-cash share-based
Slide 27: Non-GAAP Reconciling Information
NON-GAAP RECONCILING INFORMATION (UNAUDITED) Adjusted Gross Margin, Net Per Diem, and Net Yield were calculated as follows Three Months Ended Constant Currency Three Months Ended (in thousands, except Passenger Cruise Days and Net Per Diem Data): Mar. 31, 2024 compared to 2023 Mar. 31, 2023 Total re
Slide 28: 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 Mar. 31, 2024 compared to 2023 Mar. 31, 2023 (in thousands, e
Slide 29: 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 Excluding Three Months Ended Three Months Ended Fuel were calculated as follows Mar. 31, 2022 Mar. 31, 2023 (in thousands, except Capacity Days and per Capacit
Slide 30: Non-GAAP Reconciling Information
NON-GAAP RECONCILING INFORMATION (UNAUDITED) Twelve Months Ended, Adjusted EBITDA is calculated as follows March 31, 2023 June 30, 2023 September 30, 2023 December 31, 2023 March 31, 2024 (in thousands): Net income (loss) ($1,446,516) ($851,079) ($209,817) $166,178 $342,852 Interest expense, net 645
Slide 31: Non-GAAP Reconciling Information
NON-GAAP RECONCILING INFORMATION (UNAUDITED) Twelve Months Ended, Net Debt and Net Leverage were calculated as follows December 31, 2023 March 31, 2024 (in thousands): Long-term debt $12,314,147 $12,005,296 Current portion of long-term debt 1,744,778 1,744,221 Total Debt $14,058,925 $13,749,517 Less
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