Norwegian Cruise Line Holdings Ltd. · NYSE:NCLH
Norwegian Cruise Line — Q1 2022 Earnings Presentation
33 slides from Norwegian Cruise Line's earnings presentation, May 10, 2022
Slide 1: First Quarter 2022 Earnings Conference Call
FIRST QUARTER 2022 EARNINGS CONFERENCE CALL May 10, 2022
Slide 2: Forward Looking Statement
FORWARD LOOKING STATEMENT 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 Re
Slide 3: Key Events Since Q4 2021 Earnings Call
KEY EVENTS SINCE Q4 2021 EARNINGS CALL Feb 28 Oceania Cruises celebrates float out of its new 1,200 guest Vista at the Fincantieri shipyard in Sestri Ponente, Italy. Oceania Cruises sets new single-day booking record, surpassing the previous record set in September 2021 by almost 12%. Mar 7 This was
Slide 4: Return to Service Plan
RETURN TO SERVICE PLAN Developed Multi-Layered Announced Phased Returning to Health and Initial Voyage Ramp-Up Normal Safety Resumption Complete Strategy Significant Milestone Reached as First Major Cruise Operator1 to Return Full Fleet to Service 1 Compared to CCL and RCL 4
Slide 5: Robust Q1 Pricing Growth
ROBUST Q1 PRICING GROWTH Pricing growth compared to 2019 +25% +28% +3% Publicly Traded Peers Our go-to-market strategy continues to deliver strong pricing Note: Percentages presented above are based on growth in Net Per Diems, a non-GAAP financial measure, for Q1 2019 vs. Q1 2022. Please refer to th
Slide 6: Industry Leader in Yield and EBITDA Per Capacity Day
INDUSTRY LEADER IN YIELD AND EBITDA PER CAPACITY DAY 1 2019 Net Yield 2 2019 EBITDA Per Capacity Day 2 $257 +23% +44% $95 +12% +53% $209 $85 $179 $62 PEER 1 PEER 2 PEER 1 PEER 2 Source: Company and peer company SEC filings. Peer filings may not be calculated on the same basis. 1 Compared to major pu
Slide 7: Russia-Ukraine Impact
RUSSIA-UKRAINE IMPACT ▪ Cancelled or modified ~60 sailings in 2022, which included all voyages with calls to ports in Russia. Operations ▪ Redeployed three ships including Norwegian Getaway (Port Canaveral), Oceania Cruises’ Marina (British Isles) and Regent’s Seven Seas Splendor (Northern Europe).
Slide 8: Booking Trends Update
BOOKING TRENDS UPDATE ◼ Net bookings began to improve in mid-January after an Omicron-related dip. This momentum was temporarily disrupted in the immediate weeks following the start of the Russia-Ukraine conflict. The impact was short-lived and net bookings have rebounded, and more recently surpasse
Slide 9: Next Class of Cutting-Edge Norwegian Ships
NEXT CLASS OF CUTTING-EDGE NORWEGIAN SHIPS ◼ Norwegian Prima is the first of six newbuilds on order for Norwegian Cruise Line. Norwegian Prima and sister ship Norwegian Viva will accommodate ~3,215 guests at double occupancy. Prima Plus Class vessels (#3-#6) will be larger and accommodate ~3,550 gue
Slide 10: Key Financial Recovery Milestones
KEY FINANCIAL RECOVERY MILESTONES 2021 2022 2023 Q1 Q2 Q3 Q4 1 3 5 6 Positive Expect positive Expect positive contribution 2 ship contribution Adjusted Free Expect return to historical from fleet in fleetwide and Cash Flow1 load factors and Adjusted operation in Q3 Positive Operating Cash for quarte
Slide 11: First Quarter Sources and Uses of Cash
FIRST QUARTER SOURCES AND USES OF CASH (in $ Millions) Cash balance increased in Q1 driven by February balance sheet optimization transactions *Cash burn includes operating expenses, SG&A, interest expense and capital expenditures. Cash includes cash and cash equivalents and short-term investments 1
Slide 12: Liquidity & Cash Burn
LIQUIDITY & CASH BURN ◼ Liquidity of ~$3.1B1 as of March 31, 2022. ◼ The fleet in service in Q1 2022 generated positive contribution, despite the impact of Omicron, driven by strong ticket pricing and onboard revenue spend. ◼ In Q1 2022, the monthly average cash burn rate2 was ~$375M/month, below pr
Slide 13: Cash Generation Engine Fueled by Advance Ticket Sales
CASH GENERATION ENGINE FUELED BY ADVANCE TICKET SALES Total Advance Ticket Sales ($B) Quarterly Gross Advance Ticket Sales Build ($M) 2.5 $1,400 $1,200 2.0 $1,000 ~60% 1.5 $800 1.0 $600 $400 0.5 $200 - $- 1Q18 2Q18 3Q18 4Q18 1Q19 2Q19 3Q19 4Q19 1Q20 2Q20 3Q20 4Q20 1Q21 2Q21 3Q21 4Q21 1Q22 1Q20 2Q20
Slide 14: Medium and Long-Term Financial Recovery Plan
MEDIUM AND LONG-TERM FINANCIAL RECOVERY PLAN 1 2 3 Rebuild and Improve Maximize Cash Flow Optimize Balance Margins Generation Sheet ▪ Gradual return to pre-COVID ▪ Introduce robust growth profile ▪ Maintain sufficient liquidity to margin levels of ROIC and cash flow weather extended post-crisis accr
Slide 15: Balance Sheet Optimization Transactions
BALANCE SHEET OPTIMIZATION TRANSACTIONS ▪ Issued $1.15B of 1.125% exchangeable senior notes due 2027 ▪ Repurchased $715.9M of 6.00% exchangeable senior notes due 2024 November 2021 ▪ Issued common equity of ~$1.1B, with net proceeds used to redeem a portion of 12.25% and 10.25% senior secured notes
Slide 16: 2019-2027E Disciplined Growth
2019-2027E DISCIPLINED GROWTH (M) Capacity Growth: ~50% 29.0 27.5 25.8 Capacity 23.9 Growth: ~20% 23.0 19.2 18.6 2019 2022E 2023E 2024E 2025E 2026E 2027E # Ships 27 29 32 33 35 36 37 Norwegian Norwegian Norwegian Norwegian Norwegian Norwegian Norwegian Encore (Nov ’19) Prima Viva Prima Plus Class Pr
Slide 17: Sail & Sustain Global Sustainability Program
▪ Global sustainability program, Sail & Sustain, is a core focus in everyday operations, centered around 5 key pillars ▪ Strategy led by ESG1 department with oversight by executive team and TESS2 Board Committee ▪ Released inaugural 2020 ESG report in June 2021 including first SASB Index and new sus
Slide 18: Key Takeaways
KEY TAKEAWAYS ▪ Significant milestone in Great Cruise Comeback reached with all ships across all three brands resuming sailing. Full Fleet Back in ▪ Focused on ramping up occupancy in a disciplined manner with the goal of exceeding Service historical Net Yield levels for full year 2023 while maintai
Slide 19: Appendix
APPENDIX NORWEGIAN CRUISE LINE 19 BES HoLpinGs LTD.
Slide 20: Disciplined and Attractive Newbuild Program
DISCIPLINED AND ATTRACTIVE NEWBUILD PROGRAM NORWEGIAN CRUISE LINE OCEANIA CRUISES REGENT SEVEN SEAS CRUISES Ships / Berths 17 ships / 50,520 berths 6 ships / 5,240 berths 5 ships / 3,390 berths Ships Ordered 6 2 1 2022 1) Norwegian Prima: ~3,215 Berths (3rd quarter) 2023 2) Norwegian Viva: ~3,215 Be
Slide 21: Meaningful Growth Potential for Top and Bottom-Line Results
MEANINGFUL GROWTH POTENTIAL FOR TOP AND BOTTOM-LINE RESULTS Number of Ships Capacity Days (M)1 Premium Cabin Mix2 37 ~65% 29.0 6 ~60% 28 8 5 19.2 6 23 17 Current 2027E 2019 2027E Current 2027E NCL OCI RSSC Growth pipeline presents additional opportunities for diversification into unserved and unders
Slide 22: Historic Financial Outperformance
HISTORIC FINANCIAL OUTPERFORMANCE Capacity Days (M) Gross Revenue ($B) CAGR: 7% CAGR: 10.7% $6.1 $6.5 18.8 19.2 $4.9 $5.4 14.7 16.4 17.4 $4.3 2015 2016 2017 2018 2019 2015 2016 2017 2018 2019 Adjusted EBITDA ($B) Net Cash Provided by Operating Activities ($B) CAGR: 12.7% CAGR: 15% $1.9 $1.9 $2.1 $1.
Slide 23: 2022 Deployment by Market
2022 DEPLOYMENT BY MARKET 2022 NCLH Q1 Q2 Q3 Q4 FY Alaska 0% 17% 26% 5% 13% Asia/Africa/Pacific 1% 0% 0% 8% 2% Bermuda 0% 10% 9% 5% 7% Caribbean 80% 17% 11% 29% 29% Europe 0% 37% 42% 21% 28% Baltic 0% 10% 15% 1% 7% Mediterranean 0% 27% 27% 20% 20% Hawaii 0% 5% 4% 5% 4% Other 19% 14% 8% 27% 17% Total
Slide 24: Fuel Hedge Program
FUEL HEDGE PROGRAM NCLH Fuel Hedge Program as of 3/31/22 2022 2023 2024 % of HFO Consumption 30% 15% - Hedged1 Average USGC Price / Barrel $48.36 N/A - Average Brent Price / Barrel $66.50 $64.72 - % of MGO Consumption 51% 32% - Hedged Average Gasoil Price / Barrel $70.00 $69.91 - Total % of Consumpt
Slide 25: 2022-2024 Outlook
2022-2024 OUTLOOK $ Millions 2022 Depreciation & Amortization $750M Run-Rate Interest Expense, net1 $605M Non-Newbuild Capital Expenditures $500M Fuel Consumption (metric tons) 895,000 Fuel Price Per Metric Ton (net of hedges) $780 Remainder $ Billions of 2022 2023 2024 Newbuild-Related Capital Expe
Slide 26: Current Debt Maturity Profile
CURRENT DEBT MATURITY PROFILE As of March 31, 2022 ($ billions) Facilities typically would be refinanced $3.7 prior to maturity $3.7 $3.0 $3.0 $2.2 $2.0 $2.0 $0.9 $0.9 $1.1 $0.9 2022 2023 2024 2025 2026 2027 Thereafter ECA Loans, Capital Leases & Other 3.625% Senior Unsecured Notes 5.875% Senior Sec
Slide 27: Definitions and Non-GAAP Information and Reconciliations
DEFINITIONS AND NON-GAAP INFORMATION AND RECONCILIATIONS 27
Slide 28: 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 estimated future results on a GAAP basis because the Company is u
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) Year Ended December 31 Adjusted EBITDA1 is Calculated as Follows (in thousands): 2015 2016 2017 2018 2019 Net income attributable to Norwegian Cruise Line Holdings Ltd. $427,137 $633,085 $759,872 $954,843 $930,228 Interest expense, net 221,909 276,859 267
Slide 31: Non-GAAP Reconciling Information
NON-GAAP RECONCILING INFORMATION (UNAUDITED) Net Yield is Calculated as Follows (in thousands, except Capacity Days and Yield Data): Year Ended Dec. 31, 2019 Total revenue $6,462,376 Less: Total cruise operating expense 3,663,261 Less: Ship depreciation 587,677 Gross Margin $2,211,438 Payroll and re
Slide 32: Non-GAAP Reconciling Information
NON-GAAP RECONCILING INFORMATION (UNAUDITED) EBITDA per Capacity Day was Calculated as Follows (in thousands, except Capacity Days and EBITDA per Capacity Day Data): Year Ended December 31, 2019 Net Income Attributable to Norwegian Cruise Line Holdings Ltd. $930,228 Interest Expense, Net 272,867 Inc
Slide 33: Non-GAAP Reconciling Information
NON-GAAP RECONCILING INFORMATION (UNAUDITED) Net Per Diem is Calculated as Follows (in thousands, except Passenger Quarter Ended Quarter Ended Cruise Days and Net Per Diem Data): Mar. 31, 2022 Mar. 31, 2019 Total revenue $521,940 $1,403,630 Less: Total cruise operating expense 735,413 826,651 Less:
Norwegian Cruise Line Holdings — Q1 2022 Earnings Presentation on 6ix