Norwegian Cruise Line Holdings Ltd. · NYSE:NCLH
Norwegian Cruise Line — Q3 2023 Earnings Presentation
34 slides from Norwegian Cruise Line's earnings presentation, Nov 1, 2023
Slide 1: Q3 2023 Earnings Conference Call
Q3 2023 Earnings Conference Call November 1, 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 31 65,000+ Year Founded Ships in Fleet Berths 6 16,500+ ~700 Ships on Berths on Global Order Order Destinations Visited 40,000+ ~2.7M 2 Team Expected Guests Luxurious Private Members Carried in 2023 Island Destinations 3
Slide 4: Key Events Since Q2 2023 Earnings Call
KEY EVENTS SINCE Q2 2023 EARNINGS CALL Aug 3 Norwegian Cruise Line took delivery of Norwegian Viva, the highly anticipated second ship of the Prima Class. NCL resumes its weekly overnight calls to Kahului, Maui following the tragic wildfires in the region, with the guidance and encouragement of the
Slide 5: Near Term Priorities
NEAR TERM PRIORITIES Successfully absorb 18% capacity growth while remaining within optimal CAPITALIZE ON HEALTHY DEMAND 12-month forward booked position and while increasing pricing.1 Maximize ENVIRONMENT onboard revenue generation through bundling and capturing more of a guests’ wallet prior to sa
Slide 6: Seven Seas Grandeur to Join World Class Fleet in Q4
SEVEN SEAS GRANDEUR TO JOIN WORLD CLASS FLEET IN Q4 Highlights Sarah Fabergé, founding member of The Fabergé Heritage Council and great-granddaughter of Peter Carl Fabergé, will serve as Godmother 746 548 55,000 Awe-inspiring multi-million-dollar art collection with a one-of-a- Guests Crew Members T
Slide 7: Meaningful Growth to Top and Bottom-Line Results Expected
MEANINGFUL GROWTH TO TOP AND BOTTOM-LINE RESULTS EXPECTED Capacity Growth (M) Capacity CAGR ~5% Growth: ~50% 28.9 FY 2023 Growth: 18% 27.5 YE 2023 Annualized2: 24% 26.3 24.5 23.6 22.7 19.2 17.6 2019 2022 2023E 2024E 2025E 2026E 2027E 2028E # Ships 27 29 32 32 34 35 36 37 Next Generation Next Generat
Slide 8: Focused on De-Risking and Reducing Leverage
FOCUSED ON DE-RISKING AND REDUCING LEVERAGE Historical Net Leverage Reduction1,2 6.8x Expect significant organic reduction in Net Leverage from 5.1x 4.3x current levels driven by ongoing 3.7x 3.3x 3.4x cash generation & normal course amortization payments 3.0x 2014 2015 2016 2017 2018 2019 Refining
Slide 9: What's on the Horizon
WHAT’S ON THE HORIZON 1 Successfully close out 2023 while navigating temporary external headwinds 2 Execute on our near-term priorities including ongoing margin enhancement initiative 3 Complete comprehensive long-term strategic review of all aspects of business, with goal to share plan and multi-ye
Slide 10: Booking Trends Update
BOOKING TRENDS UPDATE The Company continues to experience strong and resilient consumer demand and remains within its optimal booked position on a 12- month forward basis and at higher pricing1. Targeting healthy FY 2023 Net Per Diem and Net Yield growth of 9.25%-9.75% and 4.25%-4.75%, respectively,
Slide 11: Cash Generation Engine Fueled by Advance Ticket Sales
CASH GENERATION ENGINE FUELED BY ADVANCE TICKET SALES Total Advance Ticket Sales ($B) $3.5 ATS Growth Drivers $3.0 + Capacity growth $2.5 + Robust pricing $2.0 + Differentiated deployment mix resulting in longer booking windows $1.5 + Enhanced bundling and increase in $1.0 pre-sold onboard revenue $
Slide 12: Recent Sustainability Highlights
RECENT SUSTAINABILITY HIGHLIGHTS Joined the Global Maritime Forum and strengthened commitment to decarbonization efforts by joining its flagship initiative, the Getting to Zero Coalition Oceania Cruises’ newest ship Vista secured a perfect score of 100 during its recent United States Public Health i
Slide 13: 3Q 2023 Results Overview
3Q 2023 RESULTS OVERVIEW 3Q 2023 Actuals Guidance Occupancy Approx. 106% 106.1% ✓ Net Per Diem Growth vs. 2019 7.00% to 8.00% 7.8% ✓ Net Yield Growth vs. 2019 2.25% to 3.25% 3.1% ✓ Adjusted Net Cruise Cost ex. Fuel per Capacity Day ~$152 ~$152 ✓ Adjusted EBITDA ~$730 million ~$752 million ✓ Adjusted
Slide 14: 2023 Guidance Overview
2023 GUIDANCE OVERVIEW 4Q 2023 FY 2023 Guidance Guidance Occupancy Approx. 98% Approx. 102.6% Net Per Diem 15.00% to 16.00% 9.25% to 9.75% Growth vs. 2019 Net Yield 7.75% to 8.75% 4.25% to 4.75% Growth vs. 2019 Adjusted Net Cruise Cost ~$151 ~$155 ($154 as-reported) ex. Fuel per Capacity Day Adjuste
Slide 15: Ongoing Margin Enhancement Initiative
ONGOING MARGIN ENHANCEMENT INITIATIVE Targeted Cost Savings1 Ongoing margin enhancement initiative remains a top priority. Focus is on both maximizing revenue opportunities and rightsizing cost base $187 Demonstrated continued progress in Q3 with the $154 third consecutive quarter of improvement in
Slide 16: Cost-Savings Initiatives Are Broad-Based
COST-SAVINGS INITIATIVES ARE BROAD-BASED CREW PAYROLL • Example: Optimization of crew movements and ship transfers (multi- million-dollar savings) FOOD & CONSUMABLES • Example: Reduced food costs per passenger cruise day by ~30% in Q3 2023 vs. Q4 2022 FUEL • Example: Annual efficiency gains from dec
Slide 17: Manageable Debt Maturity Profile
MANAGEABLE DEBT MATURITY PROFILE As of 9/30/20231 ($ billions) Expected to be $3.2 refinanced prior to December maturity3 Expected to be settled in shares3 $2.2 $0.3 $1.0 $0.8 2 2 2023 2024 2025 2026 2027 ECA Loans, Capital Leases & Other Senior Secured Notes Exchangeable Notes Senior Unsecured Note
Slide 18: Liquidity Position
LIQUIDITY POSITION Adjusting for the Operating Credit Facility refinancing transaction in As of 9/30/20231 ($ millions) October, the quarter end liquidity position would have been ~$2.5 billion1. $650 Issued $790 million of 8.125% senior secured notes due October 2029, using the proceeds to pay off
Slide 19: Key Takeaways
KEY TAKEAWAYS • Focused on execution of near-term priorities today, including successfully closing out 2023 strong. • Currently undergoing a comprehensive strategic review of all aspects of the business to define NCLH’s vision for the future. • Continue to experience strong and resilient demand from
Slide 20: Appendix
NORWEGIAN CRUISE LINE pS) HOLDINGS LTD APPENDIX 20
Slide 21: Strategic Deployment Shift
STRATEGIC DEPLOYMENT SHIFT Longer, More Immersive Itineraries at NCL1 Shift to Premium Destinations2 NCL Voyage 2019 2023 chg 2019 2023 Length (days) -9% 1-5 25% 9% (17%) +6% 6-8 51% 46% (5%) 9-12 14% 37% +23% 13+ 10% 8% (1%) +3% Differentiated deployment mix versus peers which results in longer boo
Slide 22: Diluted Share Count Calculation
DILUTED SHARE COUNT CALCULATION Fully Dilutive 3Q23A 4Q23E FY23E Share Count Basic Shares Outstanding 425,398,4151 ~425 million ~425 million Most Dilutive Effect of RSUs and Options Varies 3,676,5622 Anti-Dilutive Dilutive Dilutive 1.125% Exchangeable Notes due 2027 34,137,750 34,137,750 Anti-Diluti
Slide 23: 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% 24% 5% 11% Alaska 0% 4% 3% 4% 3% Asia/Africa/Pacific 8% 2% 1% 11% 6% Asia/Africa/Pacific (1%) (1%) 1% 5% 1% Bermuda 2% 11% 7% 4% 6% Bermuda 2% (2%) (2%) (0%) (1%) Caribbean 54% 20% 6% 27% 26% Caribbean (6%) (6
Slide 24: Outlook
OUTLOOK $ Millions unless otherwise noted Q4 2023 FY 2023 Depreciation & Amortization $215M $810M Run-Rate Interest Expense, net1 $200M $730M Non-Newbuild Capital Expenditures $135M $400M Fuel Consumption (metric tons) 260,000 975,000 Fuel Price Per Metric Ton (net of hedges) $718 $735 $ Billions un
Slide 25: Fuel Hedge Program
FUEL HEDGE PROGRAM NCLH Fuel Hedge Program as of 10/31/2023 2023 2024 2025 % of HFO Consumption Hedged1 25% 20% 6% Blended HFO Hedge Price / Metric ~$571 ~$392 ~$403 Ton % of MGO Consumption Hedged 66% 50% 10% Blended MGO Hedge Price / Metric ~$685 ~$741 ~$755 Ton Total % of Consumption Hedged 45% 3
Slide 26: Definitions and Non-GAAP Information and Reconciliation
DEFINITIONS AND NON-GAAP INFORMATION AND RECONCILIATION 26
Slide 27: 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 28: 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 29: Non-GAAP Reconciling Information
NON-GAAP RECONCILING INFORMATION (UNAUDITED) Adjusted EPS was calculated as follows Three Months Ended (in thousands, except share and per share data): Sept. 30, 2023 Net income $345,868 Effect of dilutiv e securities - exchangeable notes 17,510 Non-cash deferred compensation 1,009 Non-cash share-ba
Slide 30: 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): Sept. 30, 2023 compared to 2019 Sept. 30, 2019 Total
Slide 31: 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 Sept. 30, 2023 compared to 2019 Sept. 30, 2019 (in thousands,
Slide 32: 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 Fuel Three Months Ended Three Months Ended were calculated as follows Mar. 31, 2023 Jun. 30, 2023 (in thousands, except Capacity Days and per Capacit
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 Excluding Six Months Ended Fuel were calculated as follows Dec. 31, 2022 (in thousands, except Capacity Days and per Capacity Day data): Total cruise operating
Slide 34: Non-GAAP Reconciling Information
NON-GAAP RECONCILING INFORMATION (UNAUDITED) Year Ended December 31 Net Debt and Net Leverage were calculated as 1 2019 2018 2017 2016 2015 2014 follows Long-term debt $6,055,335 $5,810,873 $5,688,392 $5,838,494 $5,767,697 $5,503,076 Current portion of long-term debt 746,358 681,218 619,373 560,193
Norwegian Cruise Line Holdings — Q3 2023 Earnings Presentation on 6ix