Norwegian Cruise Line Holdings Ltd. · NYSE:NCLH
Norwegian Cruise Line — Q2 2024 Earnings Presentation
33 slides from Norwegian Cruise Line's earnings presentation, Jul 31, 2024
Slide 1: Second Quarter 2024 Earnings Conference Call
Second Quarter 2024 Earnings Conference Call - July 31, 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 at a Glance
NCLH AT A GLANCE 19 Ships | ~56,000 berths 7 Ships | ~6,300 berths 6 Ships | ~4,100 berths ~85% of annual bed days ~10% of annual bed days ~5% of annual bed days $9B+ $2.35B $1.53 2.9M 32 13 2024 Expected 2024 Expected 2024 Expected 2024 Expected Current Ships Current Ships Revenue Adj. EBITDA Adj.
Slide 4: Q2 2024 Highlights
Q2 2 0 2 4 H i g h l i g h t s NET YIELD 6.3% COMPARED TO 2023 ADJUSTED NCC EX FUEL PER CAPACITY DAY $163, excluding ~$9 ADJUSTED EBITDA ADJUSTED EPS Dry-dock impact would be Achieved year-end 14% 33% essentially goal of reducing Net FLAT Leverage* by ~1.5x, ending quarter at vs 2023 to $588M vs 202
Slide 5: Meaningful Growth to Top & Bottom-Line Results Expected
MEANINGFUL GROWTH TO TOP & BOTTOM-LINE RESULTS EXPECTED Gross Capacity Growth (M)1 8 New Ships1 ~35,200 berths 4% CAGR 6% CAGR 29.7 28.0 26.2 3 New Ships1 24.6 ~4,100 berths 23.5 22.7 2 New ships ~1,700 berths 2023 2024E 2025E 2026E 2027E 2028E 2 2036E 1. Norwegian Cruise Line Holdings Ltd. expects
Slide 6: Newbuild and Refurbishment Update
NEWBUILD AND REFURBISHMENT UPDATE Norwegian Aqua Oceania Allura Oceania Marina • April 2025 debut • July 2025 debut • Returned to service in May 2024 after extensive • Float out April 2024 • Float out July 2024 refurbishment • New culinary venues and reimagined penthouse suites 6
Slide 7: Booking Trends Update – Q2 2024
BOOKING TRENDS UPDATE – Q2 2024 Net Yield Growth • Company at upper range of optimal booked position 6.3% $296 8.2% • Current bookings pivoting to 2025 $290 • Strong pricing growth expected across all $279 four quarters in 2024 $268 • Beat Q2 2024 Net Yield guidance by 200bps, growing 6.3% • Increas
Slide 8: Cash Generation Engine Fueled by Record Advance Ticket Sales
CASH GENERATION ENGINE FUELED BY RECORD ADVANCE TICKET SALES Total Advance Ticket Sales ($B) $4.0 ATS Growth Drivers $3.5 + Robust pricing $3.0 + Dynamic $2.5 deployment mix $2.0 + Enhanced pre-sold onboard revenue $1.5 + Capacity growth $1.0 $0.5 $0.0 Q2 18 Q2 19 Q2 20 Q2 21 Q2 22 Q2 23 Q2 24 Advan
Slide 9: Greenhouse Gas Emissions and Responsible Sourcing
GREENHOUSE GAS EMISSIONS RESPONSIBLE SOURCING In our most recent submission to CDP, we received a climate change score of a “B,” $635M+ was spent with small businesses which is higher than the Marine Transport and businesses with minority, veteran, or Sector, North America and Global averages. econo
Slide 10: Q2 2024 Results Overview
Q2 2024 RESULTS OVERVIEW 2Q 2024 ACTUALS VS GUIDANCE GUIDANCE Occupancy ~105.7% ~105.9% ✓ Net Yield2 ~4.3% ~6.3% Growth ~$291 ~$296 ✓ ~5.8% ~5.0% Adjusted Net Cruise Cost ex. Fuel per Capacity Day2 0.3% excluding Dry-dock ~$165 (0.2%) excluding Dry-dock ~$163 ✓ Including ~$9 Dry-dock Including ~$9 D
Slide 11: Raising Full Year 2024 Guidance for a Third Time
RAISING FULL YEAR 2024 GUIDANCE FOR A THIRD TIME INITIAL FEBRUARY GUIDANCE NEW GUIDANCE CHANGE Net Yield1 Growth ~5.4% ~8.2% +~280bps Adjusted Net Cruise Cost ex. Fuel per Capacity Day1 ~$159 ✓ ~$159 - Adjusted EBITDA ~$2.20B ~$2.35B +~$150M Adjusted EPS2 $1.23 $1.53 +$0.30 24.4% Increase (1
Slide 12: Q3 & FY 2024 Guidance Overview
Q3 & FY 2024 GUIDANCE OVERVIEW Q3 2024 FULL YEAR 2024 IMPLIED Q4 2024 GUIDANCE GUIDANCE Occupancy ~108.2% ~101.9% ~105.2% Net Yield2 Growth ~6.4% ~5.0% ~8.2% ~3.4% ~3.5% Adjusted Net Cruise Cost 3.6% excluding Dry-dock ~2.3% 0.5% excluding Dry-dock ex. Fuel per Capacity Day2 ~$156 ~$154 ~$159 Includ
Slide 13: As Reported Net Yield Growth Guidance Evolution
AS REPORTED NET YIELD GROWTH GUIDANCE EVOLUTION1 2Q 24 2H 24 (Implied) Guidance at Q1 Results 4.3% ~3.5% Investor Day Raise +90bps +120bps Q2 Performance +110bps - 2H 2024 Raise - +120bps Current Guidance1 6.3% ~5.9% Raising second half Net Yield by 240bps since Q1 results (1) Approximate figures, n
Slide 14: Ongoing Margin Enhancement Initiative
ONGOING MARGIN ENHANCEMENT INITIATIVE Targeted Cost Savings1,2 • Ongoing margin enhancement initiative remains a top priority. Focus is on both maximizing revenue opportunities and rightsizing cost base • 2024 Adjusted NCCs ex-fuel per Capacity Day expected to be essentially flat versus 2023 when ~$
Slide 15: Adj. Operational EBITDA Margin Improvement
ADJ. OPERATIONAL EBITDA MARGIN IMPROVEMENT Adj. Operational EBITDA Margin1 • Q2 LTM Adj. Operational EBITDA Margin improvement to 33.0% 33.0% 34.5% • Full year Adj. Operational EBITDA Margin +~400 expected to improve ~400bps to 34.5% versus +1,840 bps prior year bps 30.7% • Margin improvements drive
Slide 16: Manageable Debt Maturity Profile
MANAGEABLE DEBT MATURITY PROFILE As of 6/30/20241 ($ billions) Expected to be refinanced prior to Expected to be $3.3 maturity 3 refinanced and/or partially paid down Expected to be prior to December settled in shares 3 maturity 3 $1.7 $0.9 $0.8 $0.5 2024 2 2025 2 2026 2027 2028 ECA Loans, Capital L
Slide 17: Focused on De-risking and Reducing Leverage
FOCUSED ON DE-RISKING AND REDUCING LEVERAGE Net Leverage Reduction1 Achieved Net Leverage goal 6 months early – 16.6x reduced Net Leverage by ~1.5x turn from year end Expect significant organic 9.0x reduction in Net Leverage 7.3x from current levels driven 6.3x 5.9x by ongoing cash Mid 4x generation
Slide 18: Executing on Our Strategy
EXECUTING ON OUR STRATEGY PEOPLE GUEST-CENTRIC LONG-TERM EXCEPTIONAL EXCELLENCE PRODUCT OFFERING GROWTH PLATFORM PERFORMANCE STRONG 2026 FINANCIAL TARGETS Adj. Operational Adj. EPS Net Leverage Adj. ROIC EBITDA Margin ~39% ~$2.45 Mid 4x 12% Approaching >30% CAGR Strengthening the Record levels histo
Slide 19: Appendix
es ci) ze Wu al au <
Slide 20: Fleet Expansion Detail
FLEET EXPANSION DETAIL YEAR BRAND DETAIL GROSS TONS 1 BERTHS 1 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 Seven Seas Prestige2 ~77,000 ~85
Slide 21: 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 4% (2%)
Slide 22: Outlook
OUTLOOK $ Millions unless otherwise noted Q3 2024 FY 2024 Depreciation & Amortization $225M $895M Run-Rate Interest Expense, net1 $180M $735M Non-Newbuild Capital Expenditures $141M $575M Fuel Consumption (metric tons) 235,000 995,000 Fuel Price Per Metric Ton (net of hedges) $725 $714 $ Billions un
Slide 23: Fuel Hedge Program
FUEL HEDGE PROGRAM NCLH FUEL HEDGE PROGRAM AS OF 6/30/2024 2024 2025 % of HFO Consumption Hedged1 36% 40% Blended HFO Hedge Price / Metric Ton ~$395 ~$413 Hedge program in place to provide partial protection % of MGO Consumption Hedged 69% 38% from fuel price volatility Blended MGO Hedge Price / Met
Slide 24: Illustrative Diluted Share Count Modeling
ILLUSTRATIVE DILUTED SHARE COUNT MODELING Q3 2024 FULL YEAR 2024 Shares (m)1 Interest Shares (m)1 Interest Expense Expense Reduction2 GAAP Net Income (Loss) Reduction2 GAAP Net Income (Loss) ($m) Basic Diluted ($m) Basic Diluted ($m) ($m) Net Loss ~440 ~440 $0 Net Loss ~435 ~435 $0 Up to $60 ~440 ~4
Slide 25: Definitions and Non-GAAP Information and Reconciliation
DEFINITIONS AND NON-GAAP INFORMATION AND RECONCILIATION 25
Slide 26: 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 27: Definitions
DEFINITIONS Adjusted EBITDA. EBITDA adjusted for other income (expense), net and other Constant Currency. A calculation whereby foreign currency-denominated revenues supplemental adjustments. and expenses in a period are converted at the U.S. dollar exchange rate of a comparable period in order to e
Slide 28: 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): June 30, 2024 June 30, 2023 Net income $163,436 $86,116 Effect of dilutive securities - exchangeable notes $16,017 $4,603 Net inc
Slide 29: Non-GAAP Reconciling Information
NON-GAAP RECONCILING INFORMATION (UNAUDITED) Adjusted Gross Margin, Net Per Diem, and Net Yield were calculated as Three Months Ended Constant Currency Three Months Ended Twelve Months Ended follows June 30, 2024 compared to 2023 June 30, 2023 December 31, 2023 (in thousands, except Passenger Cruise
Slide 30: Non-GAAP Reconciling Information
NON-GAAP RECONCILING INFORMATION (UNAUDITED) Gross Cruise Cost, Net Cruise Cost, Net Cruise Cost Excluding Fuel and Adjusted Three Months Constant Currency Three Months Net Cruise Cost Excluding Fuel were calculated as follows Ended June 30, 2024 compared to 2023 Ended June 30, 2023 (in thousands, e
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 Cruise Cost Three Months Ended Three Months Ended Twelve Months Ended Excluding Fuel were calculated as follows June 30, 2022 June 30, 2023 December 31, 2023 (in thousands
Slide 32: Non-GAAP Reconciling Information
NON-GAAP RECONCILING INFORMATION (UNAUDITED) Twelve Months Ended, Adjusted EBITDA is calculated as follows June 30, 2023 September 30, 2023 December 31, 2023 March 31, 2024 June 30, 2024 (in thousands): Net income (loss) ($851,079) ($209,817) $166,178 $342,852 $420,172 Interest expense, net 678,399
Slide 33: Non-GAAP Reconciling Information
NON-GAAP RECONCILING INFORMATION (UNAUDITED) 33
Norwegian Cruise Line Holdings — Q2 2024 Earnings Presentation on 6ix