Carnival Corporation Ltd. · NYSE:CCL
Carnival — Carnival Corporation & — Investor Day (June 2023)
62 slides from Carnival's investor day presentation, Jun 27, 2023
Slide 1: Owning Our Space in the Vacation Market and Driving Shareholder Value
Josh Weinstein, CEO: Owning Our Space in the Vacation Market and Driving Shareholder Value
Slide 2: Disclaimers, Forward Looking Statements and Responsibility
Disclaimers, Forward Looking Statements and Responsibility This presentation includes certain financial measures not presented in accordance with generally accepted accounting principles (“GAAP”) including, but not limited to, Adjusted EBITDA, Adjusted Net Income (loss), and certain ratios and metri
Slide 3: Our Company Framework
Our Company Framework Long-Term Goals Purpose & Mission Ensure each of our world-class brands owns its space in ✓ the vacation market Deliver shareholder value and rebuild our financial ✓ fortress To deliver unforgettable happiness to our guests Set the pace with the industry’s smartest solutions th
Slide 4: "SEA Change" – High Visibility Into Our Three-Year Targets
“SEA Change” – High Visibility Into Our Three-Year Targets Introducing “SEA Change” Sustainability >20% Carbon Intensity Reduction vs. 2019 Increase in Adjusted EBITDA EBITDA 50% per ALBD vs. 2023, Highest in Nearly Two Decades Adjusted ROIC,(a) Highest Adjusted ROIC 12% in Nearly Two Decades Approa
Slide 5: Pillars to Achieve Our Targets and Create Shareholder Value
Pillars to Achieve Our Targets and Create Shareholder Value Strong Industry Fundamentals New Leadership World-Class Portfolio Actively-Managed Returning to Strong Shareholder Value Profitability & Rebuilding Creation Optimizing Revenue and Our Financial Fortress Demand Generation Industry-Leading Co
Slide 6: Strong Industry Fundamentals
Strong Industry Fundamentals
Slide 7: Strong Cruise Industry Fundamentals
Strong Cruise Industry Fundamentals Our Industry Travel & Tourism Revenue(a) ✓ Huge value gap to land-based alternatives ✓ Underpenetrated $38B ✓ High barriers to entry Significant Other Cruise Opportunity to ✓ Superior guest satisfaction scores Grow Share $5.4T ✓ Recurring revenue streams from loya
Slide 8: Too Good of a Value Proposition for Our Guests!
Too Good of a Value Proposition for Our Guests! Unpack once to… Visit Multiple Destinations And Enjoy Dozens of Included Onboard Amenities Art Exhibitions ✓ Bars and Restaurants ✓ Broadway-Style Production Shows ✓ Comedy Club ✓ Cooking Demonstrations Fitness Center ✓ ✓ 25% - 50% Game Shows Kids Camp
Slide 9: New Leadership
New Leadership
Slide 10: New Leadership Structure De-Layers to Enable Greater Brand Effectiveness
New Leadership Structure De-Layers to Enable Greater Brand Effectiveness Josh Weinstein CEO has direct reporting CEO CEO has direct reporting Aug. 1, 2022 relationship to 32% of total Jun. 1, 2023 relationship to 93% of total brand capacity brand capacity Christine Duffy Michael Thamm Sture Myrmell
Slide 11: World-Class Portfolio Actively-Managed
World-Class Portfolio Actively-Managed
Slide 12: Portfolio of Unique Brands Targets Diverse Customer Segments
Portfolio of Unique Brands Targets Diverse Customer Segments… Single Market Mainstream Regional Market Mainstream Premium Luxury Ultra Luxury Midsize Ships Large Ships 12
Slide 13: Delivering Deeper Penetration in Established Markets
…Delivering Deeper Penetration in Established Markets North America(a) Germany(a) UK(b) #1 #1 #1 Carnival Corp 45% Market Share 60% 57% Position in Region Italy(a) France(a) Spain(a) Australia / New Zealand(b) #2 #2 #2 #1 33% 32% 43% 80% Our lead brands are #1 or #2 in every established cruise marke
Slide 14: Actively Managing the Portfolio
Actively Managing the Portfolio Capacity Evolution By Brand as a % of Our Total Fleet 2026 (Pre-COVID Expectations) – 293k Total Lower Berths 2026 (Current) – 275k Total Lower Berths Other(a) Other(a) 6% 7% 9% 25% 8% 33% 9% 9% 14% 12% 17% 11% 20% 20% Carnival Cruise Line total berths up 22% vs. pre-
Slide 15: Fleet Management Actions Improve Competitive Profile
Fleet Management Actions Improve Competitive Profile Increasing Average Berths per Ship Decreasing Average Fleet Age 2,800 13 13 12 12 12 2,600 2,400 9 2,300 2,200 2,100 2019 2023 2019 2023 2019 2023 2019 2023 2019 2023 2019 2023 CARNIVAL CARNIVAL PEER 1 PEER 2 PEER 1 PEER 2 CORPORATION CORPORATION
Slide 16: Purposefully Reducing Capacity Growth
Purposefully Reducing Capacity Growth • Combined with our strong and accelerating demand outlook, lower capacity growth supports further yield improvements • We do not expect any new ships in 2026 and anticipate just one or two ships upon resumption of newbuild deliveries • Significantly reduced new
Slide 17: Leaning Into Our Unrivaled Destination Footprint
Leaning Into Our Unrivaled Destination Footprint Grand Bahama (To come) Gulf of RCI NCL Mexico Puerta Maya Mahogany Bay RCI Princess Cays MSC 1.7M Guests 0.5M Guests Half Moon Cay (expansion) Grand Turk Amber Cove Princess Cays Grand Turk Puerta Maya RCI 0.6M Guests 0.9M Guests Caribbean Sea NCL Mah
Slide 18: We Own Cruising in Alaska with Unrivaled Land and Sea Experiences
We Own Cruising in Alaska with Unrivaled Land and Sea Experiences 330+ Motorcoaches & 9 Hotels & Lodges Revenue Vehicles 20 Glass Dome Rail Cars White Pass & Yukon Route Rail Whittier Most Glacier Bay Permits Unmatched strategic position across hotels, rail, and motor coaches to deliver unique land-
Slide 19: Optimizing Revenue and Demand Generation
Optimizing Revenue and Demand Generation
Slide 20: Our Revenue Base is Recurring, Visible, and Predictable
Our Revenue Base is Recurring, Visible, and Predictable… Recurring Visible Predictable ~55% ~50% >33% Of next-twelve-months Of onboard revenues Of our guests are demand booked at any are pulled forward by repeat cruisers given time pre-cruise sales …with significant room for improvement 20
Slide 21: Optimizing Revenue and Demand Generation
Optimizing Revenue and Demand Generation Status of Optimization and Effectiveness Lifecycle Overall Range of Brand Progress Areas Progress (Min – Max) Brand Positioning - Creative Marketing - Digital Performance Marketing - Trade Relationships Strength - Internal Sales Support - Deployment and Itine
Slide 22: Differentiated Target Segments with Significant Market Potential
Brand Positioning Differentiated Target Segments with Significant Market Potential Mainstream & Premium North America Cruise Vacation Market (375M Population) Germany (84M) Southern Europe (173M) “Sociable Travelers” 25M “Families Experiencing “Relaxed Extroverts” “Exploring Couples” Together ” 100M
Slide 23: Creative Marketing That Speaks to the Target Market
Creative Marketing Creative Marketing That Speaks to the Target Market… 23
Slide 24: Also Upping Our Creative Marketing on Destinations
Creative Marketing …Also Upping Our Creative Marketing on Destinations Half Moon Cay Amber Cove Grand Turk Mahogany Bay 22 Puerta Maya Princess Cays 24
Slide 25: Driving Demand Through Digital Performance Marketing
Digital Performance Marketing Driving Demand Through Digital Performance Marketing Percentage Growth in Percentage Growth in Key Digital Initiatives Natural Search Visits vs. Paid Search Clicks vs. Same Period 2019 Same Period 2019 • Effectiveness: Launching more effective digital +87% performance m
Slide 26: Driving All Sales Channels to Success
Trade Relationships Strength / Internal Sales Support Driving All Sales Channels to Success Building Our Capabilities to Serve All Committing to Our Travel Agent Investing in Sales and Support Channels Partners Travel Agent Booking Volume Sales and Support Staff FTEs Travel Agent Partners +56% +45%
Slide 27: Strategically Managing Deployments and Itineraries to Maximize Demand
Deployment and Itinerary Planning Strategically Managing Deployments and Itineraries to Maximize Demand Illustrative Updated Deployments: Holland America Line Expected Fly Dropping Adding Yield ~25% 7-DAY Alaska/Seattle: 4x 28-DAY Alaska Homeport 7-DAY Canada/NE: 3x 24-DAY Iceland/Greenland ~75% 7-D
Slide 28: Improving Revenue Management Execution
Revenue Management Execution Improving Revenue Management Execution Optimizing the Booking Curve and Pricing “Low-to-High” • Opening inventory further in advance, improving price • Building targeted partnerships to aid in base loading management • Continually testing and learning with price elastici
Slide 29: Driving Onboard Revenue Growth Through Multiple Wallets
Onboard Revenue Maximization Driving Onboard Revenue Growth Through Multiple Wallets Up to 24 Months Prior Until 3 Days Prior During Phase: Purchase Cruise Package ($) Pre-Cruise ($$) Onboard ($$$) Revenue Introducing More Targeted Special Offers Additional Amenities and Experiences Opportunity Bund
Slide 30: Fleet Additions Provide Differentiated Experiences for Guests
Onboard Guest Experience Fleet Additions Provide Differentiated Experiences for Guests And More Onboard Revenue Opportunities… Our updated, diverse fleet offers a multitude of cutting-edge amenities First Geodesic Dome, Sun Princess Mission Control, P&O Cruises Arvia BOLT Sea Coaster, Carnival Jubil
Slide 31: New Ships are Not the Driver of NPS
Onboard Guest Experience …But New Ships are Not the Driver of NPS 70 60 50 NPS Scores 40 30 20 10 0 5 10 15 20 25 Ship Age NPS scores powered by our best-in-class people, food, entertainment, itinerary, and several other factors 31
Slide 32: Using Guest and Target Data for Everything We Do
Use of Data and Guest Target Audience Insight Using Guest and Target Data for Everything We Do Optimize Guest Value Leverage Assets CRM Modelling Brand Tracking OBR Target Brand Index User Experience Modelling Ad Tracking Testing Onboard Cruise Ambition Sales Benchmarking Booking Ad Development Expe
Slide 33: Momentum is Building
Momentum is Building
Slide 34: Investment in Advertising and Sales Support Driving Demand
Investment in Advertising and Sales Support Driving Demand Total Volume of New Guests Sailed and % vs. 2Q '19 Total Volume of Guests Sailed New to Cruise and New to Brand are combined up 28% vs 1Q ‘23 100% 42% 2Q '19 2Q '22 2Q '23 1Q '23 2Q '23 New to Cruise New to Brand Brand Repeaters New to Cruis
Slide 35: Strategic Initiatives to Drive Demand and Revenue Already Paying Off
Strategic Initiatives to Drive Demand and Revenue Already Paying Off Occupancy as % of 2019 Net Per Diems as % of 2019 Net Yields as % of 2019 100% 100% 100% 60% 60% 60% 3Q '22 4Q '22 1Q '23 2Q '23 3Q '22 4Q '22 1Q '23 2Q '23 3Q '22 4Q '22 1Q '23 2Q '23 = Capacity as a % of 2019 We continued to buil
Slide 36: "Winter Wave" Accelerated into Spring and Continues
“Winter Wave” Accelerated into Spring and Continues Booking Volumes vs. Comparable 2019 Levels North America(a) Europe(b) Combined Cruise 119% 117% 113% 104% 104% 103% 101% 100% 100% 100% 93% 76% 60% 60% 60% 4Q '22 1Q '23 2Q '23 4Q '22 1Q '23 2Q '23 4Q '22 1Q '23 2Q '23 (a) Guests sourced for our NA
Slide 37: Continued Progress in Unit EBITDA
Continued Progress in Unit EBITDA Adjusted EBITDA per ALBD Holding Fuel Price and Currency Constant to 2019 ~100% 100% ~85% 73% 59% 50% 1Q '23 2Q '23 3Q '23 4Q '23 37
Slide 38: Rebuilding Our Financial Fortress and Driving Shareholder Value
David Bernstein, CFO: Rebuilding Our Financial Fortress and Driving Shareholder Value
Slide 39: Pillars to Achieve Our Targets and Create Shareholder Value
Pillars to Achieve Our Targets and Create Shareholder Value Strong Industry Fundamentals New Leadership World-Class Portfolio Actively-Managed Returning to Strong Shareholder Value Profitability & Rebuilding Creation Optimizing Revenue and Our Financial Fortress Demand Generation Industry-Leading Co
Slide 40: Industry-Leading Cost Structure
Industry-Leading Cost Structure
Slide 41: Leveraging Our Scale Delivers An Industry-Leading Cost Structure
Leveraging Our Scale Delivers An Industry-Leading Cost Structure Bandwidth F&B, Air, Global Ports & Revenue Procurement and Technical, and Fuel Destination Management Shipbuilding Treasury Connectivity Sourcing Development System Management Crew Planning IT Network Global HESS Policy Cybersecurity G
Slide 42: Mitigating Inflation Through Benefits of Scale
Mitigating Inflation Through Benefits of Scale Total Shoreside Staff Excluding Leverage centralized corporate infrastructure and leading scale to drive efficiencies Sales and Sales Support (18%) Continuous sharing of best practices across brands (e.g., XL ship cost analysis) Shifting fuel purchases
Slide 43: Optimizing Our Fleet Further Improves the Cost Structure
Optimizing Our Fleet Further Improves the Cost Structure Higher Revenue Lower Unit Costs Higher Fuel Efficiency 8% richer cabin mix; 6% more efficient in 9% lower fuel Greater onboard Ship Operating Costs consumption per ALBD revenue opportunity per ALBD 26 ship removals and 14 newbuilds delivered 4
Slide 44: Maintaining Our Industry-Leading Cost Structure While Investing to Drive Revenue
Maintaining Our Industry-Leading Cost Structure While Investing to Drive Revenue Fiscal 2023E Adjusted Cruise Costs 2019 SG&A Spend per ALBD Excluding Fuel per ALBD $159 $51 $118 $21 $108 $37 $9 A&P $11 $22 $28 A&P $8 G&A G&A $30 OpEx Excluding $76 $26 Fuel $19 CARNIVAL CORP PEER 1 PEER 2 CARNIVAL C
Slide 45: Leveraging Our Scale to Build on Industry-Leading Fuel Efficiency
Leveraging Our Scale to Build on Industry-Leading Fuel Efficiency Continuing to Reduce Fuel Consumption per kALBD... … and Widening the Gap to Peers Fuel Tons Consumed per kALBD in 2019 vs. 2023E 38 (2%) 44 43 (15%) (3%) 38 36 35 32 Per “SEA Change” >20% improvement 32 <30 2019 2023E 2026E 2019 2023
Slide 46: Utilizing Our Scale Advantages to Maintain Most Efficient Investment Base
Utilizing Our Scale Advantages to Maintain Most Efficient Investment Base Multi-ship orders leveraging ship platforms across multiple brands Gross Ship PPE per Berth Fiscal 2023E D&A Expense per ALBD in thousands (28%) (31%) (24%) (16%) $307 $36 $278 $31 $212 $26 CARNIVAL CORP PEER 1 PEER 2 CARNIVAL
Slide 47: Increasing Cash Flow and Deleveraging
Increasing Cash Flow and Deleveraging
Slide 48: Growth in Customer Deposits Helping Support Adjusted Free Cash Flow Increase
Growth in Customer Deposits Helping Support Adjusted Free Cash Flow Increase All-Time High Customer Deposits In Billions 7.0 +$1.2B Structural growth in customer deposits driven by: 6.5 Strong booking demand 6.0 Increasing capacity $7.2 5.5 Continued lengthening of the booking curve 5.5 Increasing p
Slide 49: Optimizing Non-Newbuild Capital Commitments and Lowest Newbuild Orderbook in Decades
Optimizing Non-Newbuild Capital Commitments and Lowest Newbuild Orderbook in Decades Drives Adjusted Free Cash Flow Cumulative reduction of $1.9 billion driven by our younger, more efficient fleet Non-Newbuild Capital Spending ($B) 2022 2023-2026 1Q '22 Business Update Guidance Actual 2Q '22 Busines
Slide 50: Excess Liquidity to Prepay Debt and Reduce Interest Expense Plus Other Levers
Excess Liquidity to Prepay Debt and Reduce Interest Expense Plus Other Levers Manageable Near-Term Maturity Schedule(b) Levers Total Principal Repayments ($B) $8.4 $0.4 $2.2 $7.3B liquidity as $4.3 of 2Q ‘23 $2.7 $0.5 $2.4(a) $2.6 $1.2 $0.8 $3.1 $0.1 $0.2 $1.2 $1.1 $0.6 3Q-4Q23 2024 2025 Available E
Slide 51: Free Cash Flow Outlook Supports Debt Paydown Over Time
Free Cash Flow Outlook Supports Debt Paydown Over Time >$5B Annual Cash Flow ~$2B Annual CapEx Net >$3B Annual Adjusted from Operations of Export Credits Free Cash Flow Over Our Three-Year Outlook >$11B Debt Paydown – $3B Draw of Export Credits = $8B Net Debt Paydown (>$10B Net Debt Paydown from 1Q
Slide 52: Looking Forward to Creating Even More Shareholder Value
Looking Forward to Creating Even More Shareholder Value
Slide 53: Strong Momentum Heading into 2024 and Beyond
Strong Momentum Heading into 2024 and Beyond • Improved fleet with nearly a Enhancing product offering 2024+ quarter of capacity new, providing better fuel efficiency, to grow onboard spend Increasing margins, unit economics and onboard Adjusted EBITDA per features Implementation of ALBD, and Adjust
Slide 54: Providing Three-Year Financial Targets
Providing Three-Year Financial Targets “SEA Change”: Sustainability + EBITDA + Adjusted ROIC Optimizing revenue management (bundling, pushing out booking curve) Increase in Adjusted EBITDA Building demand (refining target markets, 50% per ALBD vs. 2023, Highest in Nearly Two Decades investments in a
Slide 55: Driving High-Quality Revenue Growth Through Yield Improvement on Measured Capacity Growth
Driving High-Quality Revenue Growth Through Yield Improvement on Measured Capacity Growth Target Inputs EBITDA Sensitivity to 2015-2019(a) (2024-2026) One Point Change(b) Net Capacity CAGR 2.8% <2.5% $65M Occupancy CAGR 0.5% 2.0% $190M(c) Low to Mid Per Diem CAGR 2.5% Single Digit Adjusted Cruise Co
Slide 56: Sustainable From Ship to Shore
Bill Burke, Chief Maritime Officer: Sustainable From Ship to Shore
Slide 57: Our Sustainability Strategy
Our Sustainability Strategy Sustainable From Ship to Shore Climate Action Circular Economy Good Health & Well-Being Improving ship energy efficiency, and Minimizing the waste generated by Expanding well-being programs to testing and investing in new low and our operations and activities, and support
Slide 58: Our Carbon Reduction Efforts
Our Carbon Reduction Efforts Fleet Optimization Energy Efficiency Replacing older capacity with state-of-the-art ships Service Power Packages Shore Power Air Lubrication Systems drives 9% more efficient fleet Continuing fleetwide rollout 57% of the global Technology expansion of eco-friendly upgrade
Slide 59: Adopting a Circular Economy Approach
Adopting a Circular Economy Approach Targets & Aspirations Achievements • 40% unit food waste reduction by 2025, 50% by 2030 ✓ 30%+ unit food waste reduction in 2022, relative to our 2019 baseline • Increase Advance Waste Water Treatment System ✓ 87% of fresh water sustainably produced from seawater
Slide 60: SSAIDA P&O'CRUISES SEABOURN’ — Holland America Line’ MA Carnival Mand &, Costa P&O
] G SSAIDA P&O'CRUISES SEABOURN’ — Holland America Line’ MA Carnival Mand &, Costa P&O ¢
Slide 61: Appendix
Appendix
Slide 62: Reconciliation of Net Yields and Net Per Diems
Reconciliation of Net Yields and Net Per Diems 62