Norwegian Cruise Line Holdings Ltd. · NYSE:NCLH
Norwegian Cruise Line — Q1 2023 Earnings Presentation
33 slides from Norwegian Cruise Line's earnings presentation, May 1, 2023
Slide 1: Q1 2023 Earnings Conference Call
Q1 2023 EARNINGS CONFERENCE CALL May 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 30 60,000+ Year Founded Ships in Fleet Berths 7 19,000+ ~500 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 Q4 2022 Earnings Call
KEY EVENTS SINCE Q4 2022 EARNINGS CALL Announced the retirement of Frank Del Rio as the Company’s President and CEO, and from its Board of Directors, effective June 30, 2023. Del Rio will serve in a consultant capacity as a Senior Advisor to the Board through 2025. Harry Mar 20 Sommer, a 15-year Com
Slide 5: Incoming NCLH President & CEO: Harry Sommer
INCOMING NCLH PRESIDENT & CEO: HARRY SOMMER * Prestige, or its predecessor operated Oceania Cruises and Regent Seven Seas Cruises from 2002 until its acquisition by NCLH in 2014. 5
Slide 6: Vista Joins the World Class Fleet
VISTA JOINS THE WORLD CLASS FLEET In April, Oceania Cruises took delivery of the highly anticipated ~1,200 guest Vista, which will be christened in Valletta, Malta by her Godmother Giada De Laurentiis, celebrated chef, author, restauranteur and Emmy Award-winning food personality Builds on The Fines
Slide 7: What's on the Horizon
WHAT’S ON THE HORIZON Expect seamless executive leadership transition with long-time SEAMLESS LEADERSHIP NCLH veteran Harry Sommer assuming President and CEO role TRANSITION effective July 1st. Target upmarket consumer remains healthy and resilient with continued penchant for travel and experiences.
Slide 8: Ongoing Margin Enhancement Initiative
ONGOING MARGIN ENHANCEMENT INITIATIVE Ongoing margin enhancement initiative remains a top Targeted Cost Savings1 priority Focus on both maximizing revenue opportunities and $187 right-sizing cost base $161 Already starting to reflect in financial results including $158 with Adjusted Net Cruise Costs
Slide 9: Meaningful Growth to Top and Bottom-Line Results Expected
MEANINGFUL GROWTH TO TOP AND BOTTOM-LINE RESULTS EXPECTED Capacity Growth (M) Capacity Growth: ~50% 29.1 FY 2023 Growth: 18% 27.6 26.5 YE 2023 Annualized2: 24% 24.7 23.7 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 Organ
Slide 10: Phased & Disciplined Voyage Resumption
PHASED & DISCIPLINED VOYAGE RESUMPTION Sequential Increase in Occupancy Occupancy Gap vs. 2019 Nearly Closed Q1 2022 Q2 2022 Q3 2022 Q4 2022 Q1 2023 ~105% ~102% ~(4)% ~87% ~81% ~(18)% ~65% ~48% ~(30)% ~(44)% ~(57)% Q1 2022 Q2 2022 Q3 2022 Q4 2022 Q1 2023 Q2 2023E Occupancy ramp almost complete with
Slide 11: Booking Trends Update
BOOKING TRENDS UPDATE On the heels of a strong WAVE season, cumulative booked position for the remainder of 2023 is ahead of 2019 levels, inclusive of the Company’s ~18% increase in capacity, at continued higher pricing.1 Reiterated FY 2023 Net Per Diem and Net Yield growth guidance. Q2 2023 Net Per
Slide 12: Climate Action Strategy
CLIMATE ACTION STRATEGY Committed to pursuing net zero greenhouse gas (GHG) emissions by 2050 across our operations and value chain In April, set short- and near-term targets to support ambitious path to net zero. Targeting a 10% reduction in GHG intensity by 2026 and a 25% reduction by 2030, compar
Slide 13: 1Q 2023 Results Overview
1Q 2023 RESULTS OVERVIEW 1Q 2023 Actuals Guidance Occupancy Approx. 100% ~101.5% ✓ Net Per Diem Growth vs. 2019 6.75% to 7.75% 7.70% ✓ Net Yield Growth vs. 2019 1.25% to 2.25% 3.65% ✓ Adjusted Net Cruise Cost ex. Fuel per Capacity Day ~$165 ~$161 ✓ Adjusted EBITDA ~$195 million ~$234 million ✓ Adjus
Slide 14: 2023 Guidance Overview
2023 GUIDANCE OVERVIEW 2Q 2023 Implied FY 2023 Guidance 2H 2023 Guidance Occupancy Approx. 105% Approx. 103.5% Net Per Diem 5.50% to 6.25% ~12% 9.00% to 10.50% Growth vs. 2019 Net Yield 2.50% to 3.25% ~8% 5.00% to 6.50% Growth vs. 2019 Adjusted Net Cruise Cost ~$159 $158 ~$159 ex. Fuel per Capacity
Slide 15: Manageable Debt Maturity Profile
MANAGEABLE DEBT MATURITY PROFILE As of 3/31/20231 ($ billions) Facilities expected to be refinanced $3.1 prior to maturity $1.9 $1.8 $2.1 $0.8 2023 2024 2025 2026 2027 ECA Loans, Capital Leases & Other Senior Unsecured Notes Senior Secured Notes Exchangeable Notes Term Loan A Revolving Credit Facili
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 Addressed to January 2025.1 Operating Credit Facility’s ▪ In February 2023, refinanced ~$600 million of non-extended term loans under the Operating Credit Facility and secu
Slide 17: Liquidity Position
LIQUIDITY POSITION As of 3/31/2023 Does not include Quarter end liquidity position was ~$1.9 billion, including ($ millions) $300 million backstop facility1 cash and cash equivalents, ~$600 million of availability under the Revolving Loan Facility, and a $650 million undrawn commitment. Does not inc
Slide 18: Key Takeaways
KEY TAKEAWAYS •Continue to see a healthy & resilient consumer in our target high-end demographic. Strong booked position and higher pricing for remainder of 2023. •Taking strategic measures to strengthen the foundation for sustained, profitable growth as the Company enters its next chapter. •Industr
Slide 19: Appendix
NORWEGIAN CRUISE LINE pS HOLDINGS LTD APPENDIX
Slide 20: 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 8% 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 21: Outlook
OUTLOOK $ Millions unless otherwise noted Q2 2023 FY 2023 Depreciation & Amortization $200M $815M Run-Rate Interest Expense, net1 $175M $715M Non-Newbuild Capital Expenditures $115M $450M Fuel Consumption (metric tons) 235,000 980,000 Fuel Price Per Metric Ton (net of hedges) $740 $720 $ Billions un
Slide 22: Fuel Hedge Program
FUEL HEDGE PROGRAM NCLH Fuel Hedge Program as of 03/31/23 2023 2024 % of HFO Consumption Hedged1 29% - Blended HFO Hedge Price / Metric Ton ~$571 - % of MGO Consumption Hedged 76% 25% Blended MGO Hedge Price / Metric Ton ~$705 ~$736 Total % of Consumption Hedged 53% 13% Hedge program in place to pro
Slide 23: Illustrative Share Count Scenario
ILLUSTRATIVE SHARE COUNT SCENARIO Illustrative Diluted Share Count Shares Outstanding (as of 3/31/23) 424,158,982 RSUs and Options Outstanding (as of 17,573,733 3/31/23) 6% Exchangeable Notes due 2024 10,661,894 Must be settled in shares 5.375% Exchangeable Notes due 2025 23,999,985 1.125% Exchangea
Slide 24: Cash Generation Engine Fueled by Advance Ticket Sales
CASH GENERATION ENGINE FUELED BY ADVANCE TICKET SALES Total Advance Ticket Sales ($B) Quarterly Gross Advance Ticket Sales Build ($M) $4.0 $2,500 $3.5 $3.0 $2,000 $2.5 $1,500 $2.0 $1.5 $1,000 $1.0 $500 $0.5 $0.0 $0 1Q20 2Q20 3Q20 4Q20 1Q21 2Q21 3Q21 4Q21 1Q22 2Q22 3Q22 4Q22 1Q23 2Q18 4Q19 1Q18 3Q18
Slide 25: 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 ▪ Maintain sufficient liquidity margin levels profile of ROIC and cash flow to weather extended accretive vessels in
Slide 26: ESG Highlights
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 24/7/365 public Employed ~40,000 $100K to Save the 50% of director seats by 205
Slide 27: Definitions and Non-GAAP Information and Reconciliation
DEFINITIONS AND NON-GAAP INFORMATION AND RECONCILIATION 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 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 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 30: 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): Mar. 31, 2023 Net loss ($159,321) Non-cash deferred compensation 1,010 Non-cash share-based compensation 28,155 Extinguishment and modification of d
Slide 31: 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, 2023 compared to 2019 Mar. 31, 2019 Total re
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 Three Months Ended Constant Currency Three Months Ended Cruise Cost Excluding Fuel were calculated as follows Mar. 31, 2023 compared to 2019 Mar. 31, 2019 (in thousands, e
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
Norwegian Cruise Line Holdings — Q1 2023 Earnings Presentation on 6ix