Norwegian Cruise Line Holdings Ltd. · NYSE:NCLH
Norwegian Cruise Line — Q4 2023 Earnings Presentation
29 slides from Norwegian Cruise Line's earnings presentation, Feb 27, 2024
Slide 1: Fourth Quarter and Full Year 2023 Earnings Conference Call
FOURTH QUARTER AND FULL YEAR 2023 EARNINGS CONFERENCE CALL February 27, 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 Overview
NCLH OVERVIEW 1966 32 ~66,500 Year Founded Ships in Fleet Berths 5 ~16,000 ~700 Ships on Berths on Global Order Order Destinations Visited ~41,000 ~2.9M 2 Team Expected Guests Luxurious Private Members Carried in 2024 Island Destinations 3
Slide 4: Key Events Since Q3 2023 Earnings Call
KEY EVENTS SINCE Q3 2023 EARNINGS CALL Norwegian Cruise Line unveiled the evolution of the Prima Class with the all-new Norwegian Aqua, the first of the expanded Prima Plus Class setting sail in April 2025. The legacy continues with renowned Italian shipbuilder Fincantieri constructing this next-gen
Slide 5: 2023 Highlights
2023 HIGHLIGHTS A landmark year introducing three world-class ships and returning to profitability FLEET EXPANSION LEVERAGE REDUCTION Three new ships, one for each of Paid down $1.9 billion in debt during 2023, our brands. including $875 million revolver pay down. REACHED FULL OCCUPANCY CAPITALIZED
Slide 6: Near Term Priorities
NEAR TERM PRIORITIES Successfully absorbed 18% capacity growth1 compared to 2019 while CAPITALIZE ON HEALTHY DEMAND achieving an all-time high booked position and increasing pricing. ENVIRONMENT Maximize onboard revenue generation by capturing more guest spend prior to sailing through selling more p
Slide 7: Meaningful Growth to Top and Bottom-Line Results Expected
MEANINGFUL GROWTH TO TOP AND BOTTOM-LINE RESULTS EXPECTED Capacity Growth (M) Capacity CAGR ~5% Growth: ~28% 28.9 27.5 26.2 23.5 24.4 22.7 2023 2024E 2025E 2026E 2027E 2028E # Ships 32 32 34 35 36 37 Next Generation Next Generation Next Generation Norwegian Viva Norwegian Aqua “Methanol-Ready” “Meth
Slide 8: Booking Trends Update
BOOKING TRENDS UPDATE The Company continues to experience strong and resilient consumer demand and is at all-time high booked position and pricing. 2023 experienced healthy Net Per Diem and Net Yield growth of 9.1% and 4.6%, respectively, on a Constant Currency basis compared to 2019. Booking volume
Slide 9: Cash Generation Engine Fueled by Advance Ticket Sales
CASH GENERATION ENGINE FUELED BY ADVANCE TICKET SALES Total Advance Ticket Sales ($B) $3.5 ATS Growth Drivers $3.0 + Robust pricing + Dynamic deployment mix $2.5 + Enhanced pre-sold $2.0 onboard revenue + Capacity growth $1.5 $1.0 $0.5 $0.0 4Q18 4Q19 4Q20 4Q21 4Q22 4Q23 Advance ticket sales balance
Slide 10: 2023 Sustainability Overview
2023 SUSTAINABILITY OVERVIEW Established short- & Launched a climate Joined Global Maritime near-term GHG action strategy which Forum to support a reduction targets to focuses on Efficiency, shared mission to support pursuit of net Innovation & accelerate zero by 2050 Collaboration decarbonization e
Slide 11: 4Q 2023 Results Overview
4Q 2023 RESULTS OVERVIEW 4Q 2023 Actuals Vs. Guidance Guidance Occupancy ~98% 99% Net Per Diem Growth vs. 2019 15.00% to 16.00% 14.4% _ Net Yield 7.75% to 8.75% 8.6% Growth vs. 2019 Adjusted Net Cruise Cost ~$151 ~$151 ex. Fuel per Capacity Day Adjusted EBITDA ~$360 million ~$360 million 1 Adjusted
Slide 12: Q1 & FY 2024 Guidance Overview
Q1 & FY 2024 GUIDANCE OVERVIEW 1Q 2024 FY 2024 Guidance Guidance Occupancy ~104.8% ~105.1% Net Yield ~15.5% ~5.4% Growth ~$276 ~$282 Adjusted Net Cruise Cost ~3.2% ~3.4% ex. Fuel per Capacity Day ~$165 ~$159 Adjusted EBITDA ~$450 million ~$2.2 billion Adjusted Net Income ~$50 million ~$635 million A
Slide 13: Ongoing Margin Enhancement Initiative
ONGOING MARGIN ENHANCEMENT INITIATIVE Targeted Cost Savings1 (1) Adjusted Net Cruise Costs Excluding Fuel per Capacity Day. Ongoing margin enhancement initiative remains a top priority. Focus is on both maximizing revenue opportunities and rightsizing cost base $190 $185 Four continuous quarters of
Slide 14: Manageable Debt Maturity Profile
MANAGEABLE DEBT MATURITY PROFILE As of 12/31/20231 ($ billions) Expected Expected to be $3.3 repayment in Expected to be March 20244 refinanced prior to settled in shares3 December maturity3 $2.2 $1.7 $1.0 $0.9 2 2024 2025 2 2026 2027 2028 2 ECA Loans, Capital Leases & Other Senior Secured Notes Exc
Slide 15: Focused on De-Risking and Reducing Leverage
FOCUSED ON DE-RISKING AND REDUCING LEVERAGE Historical Net Leverage Reduction1,2 7.3x Expect significant organic reduction in 6.8x Net Leverage from current levels 5.1x driven by ongoing cash generation & 4.3x scheduled amortization payments 3.7x 3.3x 3.4x 3.0x 2014 2015 2016 2017 2018 2019 2023 202
Slide 16: Key Takeaways
KEY TAKEAWAYS FOCUSED ON EXECUTION RIGHTSIZE COST BASE BALANCE SHEET Began 2024 focusing on execution STRATEGIC Demonstrated progress on our ASSESSMENT Strong liquidity position, reduce of near-term priorities. Continue to ongoing margin enhancement leverage and restore balance Complete strategic ef
Slide 17: Appendix
NORWEGIAN CRUISE LINE pS) HOLDINGS LTD APPENDIX
Slide 18: 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% 0% 3% Bermuda 2% 9% 6% 3% 5% Bermuda (1%) (1%) (1%) (1%) (1%) Caribbean 58% 18% 8% 30% 28% Caribbean 3% (2%
Slide 19: Outlook
OUTLOOK $ Millions unless otherwise noted Q1 2024 FY 2024 Depreciation & Amortization $225M $895M Run-Rate Interest Expense, net1 $190M $730M Non-Newbuild Capital Expenditures $113M $475M Fuel Consumption (metric tons) 270,000 995,000 Fuel Price Per Metric Ton (net of hedges) $740 $695 $ Billions un
Slide 20: Fuel Hedge Program
FUEL HEDGE PROGRAM NCLH Fuel Hedge Program as of 12/31/2023 2024 2025 % of HFO Consumption Hedged1 40% 21% Blended HFO Hedge Price / Metric Ton ~$398 ~$402 % of MGO Consumption Hedged 65% 21% Blended MGO Hedge Price / Metric Ton ~$745 ~$738 Total % of Consumption Hedged 53% 21% Hedge program in plac
Slide 21: Illustrative Diluted Share Count Modeling
ILLUSTRATIVE DILUTED SHARE COUNT MODELING Q1 2024 Full Year 2024 Shares (m)1 Interest Shares (m)1 Interest Expense Expense GAAP Net Income (Loss) Reduction2 GAAP Net Income (Loss) Reduction2 Basic Diluted ($m) Basic Diluted ($m) ($m) ($m) Net Loss ~427 ~427 $0 Net Loss ~435 ~435 $0 Up to $57 ~427 ~4
Slide 22: Definitions and Non-GAAP Information and Reconciliation
DEFINITIONS AND NON-GAAP INFORMATION AND RECONCILIATION 22
Slide 23: 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 24: 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 25: Non-GAAP Reconciling Information
NON-GAAP RECONCILING INFORMATION (UNAUDITED) Adjusted EPS was calculated as follows Three Months Ended Twelve Months Ended (in thousands, except share and per share data): Dec. 31, 2023 Dec. 31, 2023 Net income (loss) ($106,485) $166,178 Non-cash deferred compensation 1,010 4,039 Non-cash share-base
Slide 26: 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): Dec. 31, 2023 compared to 2019 Dec. 31, 2019 Total re
Slide 27: 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 Constant Currency Three Months Ended Excluding Fuel were calculated as follows Dec. 31, 2023 compared to 2019 Dec. 31, 2019 (in thousands, e
Slide 28: 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 were Three Months Ended Three Months Ended Three Months Ended Three Months Ended calculated as follows Dec. 31, 2022 Mar. 31, 2023 Jun. 30, 2023
Slide 29: Non-GAAP Reconciling Information
NON-GAAP RECONCILING INFORMATION (UNAUDITED) Year Ended December 31 Net Debt and Net Leverage were calculated as 2023 20191 2018 2017 2016 2015 2014 follows Long-term debt $12,314,147 $6,055,335 $5,810,873 $5,688,392 $5,838,494 $5,767,697 $5,503,076 Current portion of long-term debt 1,744,778 746,35
Norwegian Cruise Line Holdings — Q4 2023 Earnings Presentation on 6ix