CCL.L - Earnings call 1 2023 | Carnival Corporation & plc

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Josh Weinstein

Good morning. This is Josh Weinstein. Welcome to our first quarter 2023 business update conference call. I'm joined today by our Chair, Micky Arison; our Chief Financial Officer, David Bernstein; and our Senior Vice President of Investor Relations, Beth Roberts.

note be of forward-looking. please this remarks begin, will call I that our some on Before Therefore, cautionary press statement must in I refer today's release. you to the

remain as Consistent an gap update, last with we our to XXXX. upward further we trajectory closed the business on

has experiencing and later are gained still which early, year. record a We into season, the wave started strength extended

to We making to we're on the drive globally. expect demand traction these favorable trends to ongoing continue effort based our

from measures: X occupancy we XXXX in dedicated In points away or points prior adjusted our sequential price occupancies which outperformed Revenue, gap the team to XX all overcoming increasing million costs, XXXX to way to efforts just and on $XX QX above and from quarter, amazing had this XXX,XXX is well occupancies now headwinds the our improvement historical members summer. being while earnings, QX points to the in first our guidance, anticipate second in on thanks quarter, capacity, our in on less EBITDA the guidance around our We fuel of XXXX currency We over since XX levels. from world. in

back opaque cost side prices of ticket and important, also lost the on growth not we sight onboard Equally drove but the channel maintaining revenue continue on to outsized higher also throttle our while we have business.

inflation which in that aggressively decisions on. hard remain while EBITDA to reflect to have our seek produce path profitability. cost We nimble and and and increased reinvesting the David our primarily cash our greater X We will support to flow, of during We quarter still but future opportunities guidance strong back are working taken accelerate continue adjusted demand. to elaborate update will costs free did to years mitigate sales advertising build to

EBITDA is expecting XXXX's year, two by $X.X being $X adjusted items. adjusted billion to driven gap EBITDA record the billion midpoint. the The of primarily of we're For at

us XXXX cycle which this gap our behind year. as we to to be is XXXX, through First occupancy we expect

discussed on land-based year window not during that but primarily this recovery were well results disparate protocols the most as and to longer-duration in deployment as early changes we did As call, of delayed feel place for European these exotic the given in COVID voyages alternatives last trajectory. the slightly the the we improving from voyages, close-in booking

compared efforts and our X resulting Second strength is a continue which, prices has to course, optimization due will even significant the generation drag offset and cost to changes to work our us In fleet demand to further. helped to of diems inflation per elevated of actuality, of fuel mitigate currency XXXX. in years

basis roughly to per XXXX EBITDA quarter, halfway holding our back back. and first than better constant ALBD in On we XX% fuel and a currency to were expectations levels, price our XXXX be to

the price the to of positioned of well the and results to bottom occupancy we activity, in ticket than expect prices XXXX. to allowing fuel continue seeing drive exit opaque further Each currency we line generation higher gap levels the X/X that and demand back over to continuing channel and offset XXXX close quarter year. net the as pull to are be as from drag us our $XXX to us entirely more in we our We time. back second point With improvement progress yield rival in way million back

company's actually Friday and history, build. booking the March, Black wave and this has for remainder booking phenomenal. supporting early volumes that To of been our to record has continued the in started week strength that expectations we We year. in February. achieved news is good with best booking quarterly has the volumes into highest bookings end, for season It in weekly last ever volume the our continued had wave our And revenue our

better. do working we're to course, hard very Of even

brand North running North January brands In record volumes the are to us February. and Carnival in back booking for records our single and been every American last America, months peak propel Booking excess have levels booking new lead continues our forward, of X now XXXX week for in levels. breaking times to

as is strengthened more the period home the winter trends European improving our cycle. for all Demand we recovery U.S. Demand to up brands concerns market and across heating catching has recently fade. in and regions are the exit

a curve. close-in reached booking strong lengthening for volumes fact, booking and in as producing continued the evidencing well, demand In a record brands our European

is U.S. the previously and Asia the we X resumed while successfully ships of is terms one now with we Japan cycle. behind, about beginning behind Australia As still there noted, in about recovery in years a Taiwan operations the this And summer. in year

guests country not brand fleet. of has travel, million by we've Costa. our alternate our for presence leveraging a China. international the rightsize Turning this, leaned the to The which pre-pause we to working. taken portfolio The capitalize as brands To was X we actions assets of deployments the and are into still mobility reopened of our for to Costa building our while address on for the significant scale strength remaining accounted cruise Costa

is its with level of Cruise Style transfer And received launch able of Fun Costa Line be Venezia has quarter. enter to faster nearly highly the reaching idle Italian strengthening at capacity for to and support demand, strong Carnival XXX% will third the brand, already remaining pace. successful our a Following the occupancy

land-based alternatives, XX% field unwarranted XX% Overall, time. enabling with and value normalized gap to onboard us offerings close protocols, to an playing over to we land-based are on even unprecedented the to

levels. on incremental given loyal low capitalizing satisfaction cruise demand our high and as vacations, are We We're to pent-up guests positioned for critical who for penetration our on awareness has ongoing been agent cruise a of demand base source well efforts This to-cruise capture by travel increase large among remain helped guests. we to new work consideration our to and guests. the new of partners building

to of activity trade showing delighted trade trade training in the is exceeding us as dividends. paying with quarter in our XXXX rebound engagement. say levels its brands our am with clearly that recovery is investment and our advertising partners a fantastic we with and sales increased support this past support I And several

propensity upsizing example, TV For been brand measurable in as P&O has Not our presence awareness only Cruise been P&O brand for in we've U.K. U.K. cruising increase the Cruises, with enjoying a the has bookings synonymous This a over U.K. surprising also high given last the X between and months. experienced book in brand correlation is result, record the but awareness the TV to advertising not the has

the with Cruises of naming Olly unprecedented Barbados Arvia ago. featured and well X amplified XX and The chart-topping submarine weeks Prime first bar godmother, the singer, Barbados, it's event incomparable Murs less P&O brand fabulous The Nicole awareness over of escape Mia Minister outlets. U.K. Arvia publicized experiences Sherzinger, taking Mottley. got the XD is with new room, our and in has dining of than the industry's like been guest and amazing

measured X.X% compared newly delivered the growth still capacity have of to nearly capacity. retaining while XXXX ships, excitement our XX% We a representing from XX

of and and brands: P&O our is growth importantly, our Carnival fleet towards U.K. portfolio And three Cruise Cruises following AIDA our returning Line, highest optimization. weighted

their overall capacity Scores generation have growth help sized clearly to ensure and As to acquisition market potential, strategies on resulting time, appropriately at working on in road this Net target drive amazing market markets, I've hone the advocacy the that and mentioned over they demand drive previous to on support and revenue identified calls, possible brand to deliver been with actively and the is board generation an capability Promoter lowest to higher. maps on target each experience cost, guest

efforts underway. These are well

source and target audiences pause process resize have by ]. are segmentation refreshing research markets confirm We to brand or post our in of all across the major [

Our attract positioning identified fine-tune insights we clear leveraging are guests new-to-cruise efforts loyalty. increase brands differentiators, have and and brand's these to marketing to each and

we've affinity resonate developed guests. which like brand will its partnerships demand Porsche to new Club for is example, a way drive that Princess, with of efficient America new-to-cruise to an target For

home We most emphasis regional multiple new leaned storytelling. And national have major marketing across awareness. enhanced to in video television markets and port-driven with we've media digital into including for media increase channels, on campaigns launched new

new TikTok and has AIDA's Together, fact, In Better views counting. campaign, on million had XX wave

traffic, redesigning achieve and are pre-cruise websites increase sales. improve conversion onboard higher We to online

our to revenue. incremental are increase We onboard as well apps communication onboard refining capturing and engagement as

performance digital our impressive results. refining search engine testing new efforts, are continuously and optimization approaches generation marketing We fine-tuning with lead

driven As over an top digital X just in has lead increase named the X XX% to recently examples, and last Holland America generation just brands Costa in XXX months. the was fastest-growing

testaments service are XX% in of brand are which visits up measured guests the to already our in resulting the that and above. web support. of our the we're growth. our XX% in Our of from fact, capacity success is levels multiples times of XXXX the our XXXX, quarter. and are call first support to new These sales advertising volume to increased And investments reached bolstering all over address And and reduce sales

occupancy through and tools support opening to deployments offers sharpening and pricing also and the incremental bundled drive revenues programs. further. earlier are push increased revenue We advance, upgrade to our curve We're builds in management package new learning strategies to testing further booking out and

do. learnings low we everything fare reducing levels to guest insights to are already And through policies deposit We using are in cancellation cross-brand structures. sharing new we and actively changes and aid

brand's our it's to in have and assets over We net efforts have while in And aid we To yield sense efforts, and leverage to industry-leading further time. drive these further opportunity we also working, an urgency the land-based a to Caribbean improvement. our monetize recognize Alaska. efforts build all of these

meaningful revenue tailored In port. best we're our Carnival yet, drive a private the voted strategic Caribbean margins. And destination Moon developing on is It's to largest guests our Cruise are being course, Line Grand island. Half we yields to of with Cay, of and consistently Caribbean, designed deliver our fact wow higher also Bahama to which advantage building expansion

deliver Importantly, a itineraries, development to furthering strategically fuel wide efforts. reduction this consumption carbon located array of our is lower

a hotels, coaches have as itineraries by packages the featuring we an iconic and footprint Alaska, deliver most strategic as rail the Leisure in well unmatched to And far, land-sea unique Bay. motor across of lifetime

effectively our capital credits roll export serve but maturing not attractive completed remaining only more to attractive to to credits ships, The fund $X.X export debt structure. at total are also billion. bringing they rates. We've that's two quarter, to available Turning this way new an the

credits In be few export due drawn. to fact, the of credits in replaced by be export years new next the coming available majority will

credits our to result, export a preferential interest at low mid-single-digit similar rates. expect portion of As remain we a structure to debt

$X.X of proactively start of to August until to to XXXX treasury Hats also renewal forward benefit of the window our credit addressed billion. revolver the provides of agreement. team. and build The current creative retain allows XX-month liquidity billion us of on the our and We commitment off David revolving $X.X an

We remain making decisions, in allocation disciplined capital new builds. including

order plus We book be to ships will there lowest and this in be have second for incredible in order which luxury our decades, X expedition Seabourn later year. through our XXXX, ship delivered none on XXXX, is

contributing strong flow and wave up for season, double this prolonged positive year. and full are running deposits customer quarter Following free turning adjusted a cash digits, the to

we higher We for demand structurally in deposits as offerings in increasing benefit from increases are and up customer sales. growth bundled package and pre-cruise set going our forward

$X opportunistic the renewal While well positioned we to revenue we our cost financings equity. from and to billion profile down intention credit liquidity industry-leading debt us, to excess to bring cash reduced liquidity, issue behind free CapEx be structure, incremental going revolver our with export are we'll look no pay over are hand, bottom refinancing expected at positioned our well the committed opportunities of year adjusted always And maturities more to in have forward with near-term positive, and believe line. we for

delevering durable on the revenue hire per enterprise Over for on holders. time, focused increased we credit debt equity to birthday improvement holders ROIC. our back margin driving to ratings propel and toward and value from the investment-grade are We company available to expect us EBITDA growth, path shift

while shore, team we our by the their visit again integrity once praising fulfill honoring call and ship of for end every and the providing travel can't guests unforgettable day who our unwavering every partners to support sail, extraordinary touch. work of we I life place our to vacations ocean hard so cruise members, creating and without we mission agent our happiness

I Our which company people, our am by is for thankful. incredibly powered something best-in-class

like With over turn that, I'd David. call the to to

David Bernstein

Thank you, Josh.

my currency cruise reference net of adjusted Before I costs begin, note please all fuel ticket per prices, to without unless stated. be will in and otherwise diems constant

position. provide I'll results. I'll cumulative XXXX a start of of today book with our Then our a first summary recap quarter

give financial I Next, some guidance full our will and color up position. XXXX year additional March finish on our describing

first measures. quarter, indicated, in our all guidance on Josh we outperformed the As

adjusted EBITDA was above the favorability two first million, the First, was were improved our of guidance. which of of partially XX%; of fuel and prices both $XX up December expenses quarter, of The improvement $XX cruise million higher in $XXX from impact per prices midpoint timing For diems million, our costs net higher over $XX net occupancy was $XX a ticket in by both of things: adjusted were driven and million without X.X% and unfavorable the which million due offset to quarters, favorability by between currency. second, as steel

the additional first before comments three results. have leaving I quarter

as of consumer XXXX, continued well pace First, the at continued our an offering. is elevated quality with in half our the of consistent as strength first onboard the and the back demonstrating onboard that other revenue quarter for

to indicated that package we call, changed revenue December XXXX, capture we offering I revenue the accounting you reevaluated to done during However, that as and allocations. in I want we conference the the incremental for have remind the past, bundled streams,

in per diem the less and ticket a to the and to both XXXX. result, be revenue less allocated XXXX, in impacting comparisons more revenue onboard XXXX other As will onboard, and of

to per add to metrics the reason judge diems. our by revenue reasons is list another best our Just to such to reference of the net performance as revenue cruise total why way

Second, first over XXXX. still XX% quarter to a occupancy for was the but gap

as adjusted to starting up setting by occupancy through in the we higher revenue quarter close expect EBITDA XXXX, us first year-over-year We to improvement. improved driven gap for of because XXXX, continue the progress

call. remaining And exotic held cabin which quarter occupancies, our was on our XXXX, from this the quarters the first for that the X last mix quarter which third, voyages mix net brand of per discussed particularly diems XXXX conference by benefited we compared aided and as down to

Turning book cumulative to our position.

higher cruise remainder strong higher of For end the prices with compared cumulative is quarter first pre-cruise The ticket advanced the a deposits in customer previous $X.X for with XXXX bundled position strong billion, book and cumulative surpassing normalized the our XXXX, has $X.X of offerings along sales record future is in when achieving quarter a pricing resulted position record total that occupancy to package first strong billion, at of booked credits range. historical XX% book increase. of the solidly

color pace We year to for to a additional guidance. demand, reenter growth able now on the from be some on close expect its or give occupancy occupancy will XXXX as year the our compared at capacity full full I to capacity expected Costa idle is each as when originally thought, Next, be quarter faster increasing will our XXXX. strengthening year XXXX we than higher XXX% XXXX guidance. December Full March remaining X.X% compared be to XXXX. With capacity to levels growth gap

compared full compared to fourth On XXXX a yields as front, the with to improving XXXX year XXXX XXXX every be to exceeding for pricing diems net expect X% the up XXXX to throughout net in quarter we and per quarter. X% strong

previously for first mix and As brand net to cabin remaining compared of mix X benefited XXXX mentioned, XXXX. quarters per as I quarter diems the from

mix Our diems mix second cabin reflect implied second the net brand the and XXXX quarter per of year. for the the guidance and throughout for half changing

were revenue other per diems with their been up During brands. as and XXXX, XXXX significantly American case onboard has brands our European the in expect North be versus XXXX our they and to

that is American pointed North European As absolute brands. brands spending onboard our I out, on less than the on previously our

lot gamble less. a brand more European Our to drink guests bit a little but tend

during mix. a they brands ships, And diems, EBITDA no and and percentage per the quarters catch changing revenue second brand from the onboard up total, the benefit our North adjusted longer lower up the driving occupancy make historically average. with per American their higher, third will filled As we their with brands on European of passenger larger will

close the the to we be cabins. left cabins to to many inside as occupancy, addition, or XXXX In continue filled remaining gap of

our As lowering will cabins, average diems. our higher, last we driving inside of net fill fill our adjusted shrinking the inventory we increasingly remaining EBITDA per

structure, XXXX the turning Now full be costs. to up Off for higher fuel per right our cost expected adjusted of costs cruise versus to the driving reasons X year industry-leading adjusted for our the higher. point XXXX This X.X%. are than X.X% base without is to now ALBD December but guidance, approximately all EBITDA

the EBITDA also quarter, of certain other first occupancy Atlantic increased on food First, the adjusted with levels operating driving sides costs on our but levels we which based, booking higher. guidance the December expenses record and higher both was cost driving during

and increased and the levels occurring staffing associated higher given costs Next, reevaluated we service than sooner previously we are support and globe levels customer thought. our around booking

service strategic additional strengthening XXXX, Third, capacity, higher. will but made demand, Costa for to restart decision drive its reenter in idle means with the EBITDA we adjusted remaining into which again, this expenses

Fourth, earlier but the depreciation expense sale adjusted expense, charter the will and higher. this drives reduce month back resulting Seaborne costs of Odyssey opportunistic charter hire cruise

record will will but on be from excluded U.S. costs. the a the sale, gain GAAP adjusted We cruise gain

And set up beyond costs more successful Again, in an broken drive opportunities like EBITDA further XXXX. will higher. will ourselves a finally, up higher, but drive and XXXX sound I we advertising and expense fifth, adjusted also see cruise must record, tweaking for adjusted later this by to even

depreciation nimble in and issued amortization, the this found seek to in titled strong continue can of accelerate morning Guidance. earlier remain and section expense we be update to opportunities aggressively business back we path said, to The profitability. Josh As interest the release details and press our expense fuel

through you walk the to time the take not numbers. will I So

which year-end it treasury higher job having our our has is However, rates, team than rate significantly XX% managing the XXXX when fixed debt portfolio was debt what a with thank of great I protecting our in us would XX%, for interest environment. been rising like to

for note represent expect factors expense, consumption slightly for year MGO the around of to those modeling Furthermore, we XX% $X.X that together, the first for half fuel these billion XXXX of adjusted $X.X our the you our higher EBITDA with all the XXXX. fuel to full of we Putting during please year. of expect billion percentage

we will I quarter first our smiling be I we for positive expect drew billion great be Arvia And flow to our Cruises cash the $XX up $X flow P&O we for when am of turned credit adjusted delivery. at describing quarter in XXXX the pay peak remainder down of I well of to debt. XXXX expect we believe free at when finish $XX.X the free And debt total in first financial to the positioned I $X.X positive report adjusted maturities and cash time that liquidity, We position. down year-end, now on over of full for billion export that with over near-term beyond are debt billion the the XXXX excess of debt approximately to are billion. total from I of feel we of report XXXX. as the year Total liquidity. by our peaked

flow In durable $X.X And addition, to through we And maturities maturity issue gross as path grade. margin and no of investment equity. growth back looking I balances revenue to have and well a our drive adjusted result, been improvement cash year. to has down which our in intention debt our beyond increases billion debt debt forward, expect have on substantial XXXX managed towers free in next XXXX, through

update to quarter and let for release turn I our visit operator, presentation. to the Before the call remind website business our me first you over

let's questions. call Now open the up for operator,

Operator

of [Operator Securities. Scholes Truist line question Instructions] Patrick first Our with the from comes

Charles Scholes

you. couple A for of questions

there. of left that it's how -- talked say, sell. during sort cabins lower you you your the shifted to Did to cruises? quarter December sold any trended shift my That's the later about would out but people volumes booking European I having, How stronger off, to did in quarter, vacations play of out desirable January, pricing less on, only as and how First Any pricing? the in related you see at beginning and question. or first longer, volumes then say, volumes, but higher then maybe say, and Alaska

Josh Weinstein

Josh. period mean just the the wave, entire So this wave discernible. wave strength. business is intended, I the is No, nothing pun were over volumes fact a in the after

noticeable. of fact the the left. things down up filling anything so about than And summer, -- we've getting you're just to the on clear, and mentioned finally to didn't insides to catching got then the when X majority not less talking over QX we ends. in left. points that David, out just It's see we're that's be what And historical just it's only

feel year. real has we over the remainder that and wave We're good for the So about the well, of we're fact booked tracking XX% continued.

David Bernstein

the people And desirable. a have wouldn't less I cabins. in time by And great just way, those them call They're different.

Charles Scholes

My with at Okay. I comment share can direct. the hear noticeable we cruise, next about Certainly, that. in shorter with question, trade, you book the trends on conversations Can that you're taking talk won't in expensive from book on you all? argue less direct. my especially that,

Josh Weinstein

what that what remarks, to our levels Overall, held direct overall, to in up you many of consistent we've -- been we're to trade into exceeded can XXXX and we And they it's back said, in up way achieve. get really levels. is my our me on be hard And the know heard the those business to with working we've as prepared help well fact get say trade. brands that And the well. is, our going the

ultimately helps actually feel we our own the to can help do been just folks more revenue Because fantastic the bring the interested and more our that and we It's the get partnership the isn't performance to we date, on the just all trade. that generation to that we brands. continue. work for they've momentum more ourselves. awareness with expect made the doing in we've So have, think really the And trade we they about and like

the from of Wieczynski line Stifel. Steve question with Next

Steven Wieczynski

did you ask provided exceeded EBITDA EBITDA with look that's what morning. it if in guidance you So by, significant at this we about your and Josh in And first just quarter, David, to fuel And FX the headwinds. about call full pretty it, midpoint let's year the XX%. want or a

So is, in look incredibly, And given let's than, what EBITDA just the the the what to quarter, second of you're to you're incredibly perspective, little for guiding whatever seems question call we demand $X guiding want it, less if guess conservative you're a I second at from for essentially the billion that seeing you perspective, at a year. look it. half spending

taken view the So that that the where are range. second right a kind ask have some be of you guidance the pretty figure the safe change should consumer impact just stay to understand that there slow I'm some And mix, I your if differently, upside half but that does and mix David it could out the to cabin There some good trying brand out And little look, I called is what in that of now? in they to assume year? consumer be.

Josh Weinstein

first right? forward of we just guidance give variables, there are amount because mean, pull to active you our expectations. quarter, initiative, there. beat that we a Overall, are the our hard like I can Look, some Some working and little XX% booked. incredibly move to bits range already, to things here based pieces Yes. our lot know. spend, extent and we're as things, like has some We own of We been an set get onboard a already good which mentioned the a on of I

do we'll so that. to continue And

activity, and that's in with spending booking level. seen respect to onboard a consumer and decline not both pace have We the

there's business, lead EBITDA want to -- as So the that stronger fact volatility we through despite shown work and does, we way if in up year. some maintain out the even there, our can it it it yet hopefully hasn't that our and has to ever not

Steven Wieczynski

use Okay. is Got needed the you. it very made believe And in forward. press liquidity then, very that in now company of equity the you solid moving the be position a Josh, won't release you clear and

Have return given over to corporation, seat So important line to it Carnival, but time for you've the months. to not X a any let's status? now you sat that as call in as your thought investment-grade year, when could a now

Josh Weinstein

I'm of certainly flow treasurer, over that's is by driven be us. all The is a get so goal Our cash significant trajectory important former to for there. time. going quite free to

longer-term is on full views This our a quarter. just working world. the year outlook. first are gave We of We

going So give certainly little me about talking initiatives targets start and forward. we'll a and longer-term more time

David Bernstein

It's remember investment debt. getting is EBITDA twofold. that paying back improving both and grade But to down

Josh with his none And do remarks, and ships to improved debt. accelerate able occupancy. we result EBITDA as the in lower only mentioned paydown And so XXXX, and in as order four to prepared on in see XXXX, the do a CapEx adjusted the expect considerably of we expect for be to

Operator

Hardiman Our from question James next the line of Citi. with

James Hardiman

are to of trying work cabin a sort our power impact? I'd in the the we figure the of like-for-like throughout tease out just if better and inner Is any questions the getting affecting through of mix in I'm investors there different ask the consumer or rest the out year. to guess course for deceleration there's lot Obviously, the previous way. as I [ way one maybe a are of So Obviously, the mix getting ] a worse, of over diems pricing year. per bracing right? way per space, diems

Obviously, in to what think and spot any is that terms the consumer? very given of space, Maybe pricing been. it a like-for-like we've us tells sort of where about about different way

Josh Weinstein

Sure.

James. question, the the pricing for thanks is So up. Like-for-like,

very we're happy. So

are desirable and down, and it they're As undesirable and cabins. what David wish for was fleet and looking based very line, they up more it board. not paying spending our They're portfolio said, our I for, on good had I particular really a on more said, guests are

holds is I've to up bad, from lower up comes, and to this we because the than recession, and well time an why land, model are XX% in for hearing been reason land-based one incredible so got value well. I and if you equivalent. it And the long last the business our a anywhere XX% to remember, good times XX remember years, for And here a very holds

how which still in better used more will do out we past, I the important, vacation, go even And for now for to so not be dollar figure when make people to money their the provide incredibly people their are further, than it is looking value up. can my give so

So we our position. about feel very good

David Bernstein

sort that that in I of have lot is we And get pricing prepared did disappeared. issues a by quarter indication that the to up we did I XXXX. to only an expecting. higher fourth the is fourth expect add that of mix compared of yields about be the The we the can to remarks thing were to we're time And say my quarter, talking that

Josh Weinstein

Pretty of much them. all

David Bernstein

yes. of All them,

James Hardiman

side. sense. Got cost it. then maybe Makes on And the

So I first Constant roughly XX.X% costs were X% to currency, XX.X%. quarter. think in up the

was those numbers. The for X.X% X.X% the it quarter, around there some costs of But second year. to then seems like moving within

the guess back about I are sort presumably of exit numbers rate. just half year, coming those I'm the trying of think an So down. to

You of you're versus in Or going I there of spending 'XX said to still beyond the rate of later year. is opportunity down normalized 'XX? about net on as more But sort XXXX? advertising growth costs think be move should level the cruise base to come for ultimately, a an in we

David Bernstein

Sure.

second. drove second to quarter, quite that first the So the we with, was remember, were to things but a increased the first go up the really did mentioned There quarter occupancy and two start bit, there from you to it that. --

X percentage occupancy. You're in a talking increase point about

of points was very couple I'm of the so difference. That And a happy.

The other X also of the because dock, the quarters. dry of between docks dry number was was worth points which

two items. expenses. the there of differential is X-point was X And of just also timing So R&M those

the guidance that's year always on our than quarter. we but said to about that. as we'll full not times full fairly costs year, we particular us But we've before, to reasonable run forward. as hard gave the going you any work do, do rate many and for better judge And for a And think

Josh Weinstein

operating One thing to a that a still in bit because we're comparison I just this of want we're clarify under little year. structure bizarre

the exit we're So when XXXX then rates, you a which gap about year you remember, in and is this XXXX, about talking talk X-year versus comparison. to got

'XX yet, about that's look talk would which 'XX. we When about what not 'XX we're like, remember, talking versus

the that was last we're we're versus environment give the from normalized describing different industry, very the a doing very, to and sense look of year will picture better that XXXX. of So which how

Operator

the question Fred of Wolfe Wightman with Next from line Research.

Frederick Wightman

European if you look follow the booking America, consumer on know that talked broadly sort made North which picking that is you think a I with fleet together trailing specifically. some help of Can all gap us there where about to the sooner. you specifically? then But piece we wanted is North of sort consumer. recently coming bookings little American all comments back at service up about bridge European for also and I Costa curve, that just into up the consumer just the bit I and maybe the guys

Josh Weinstein

Yes. news And is all from good our perspective. it

extend this U.K. and closer strong also their on They've have they managed period. to are than the the our under. they're of generating normal, to we experiencing booking over that demand that they've more Europe over environment the in brands been is operating close-in window despite demand. the All as said, expectations outperform continued fact good even But news

and So not getting what are for making they're term, normalize demand about advance. choices you their is tells also think short the beginning holiday to but well only that in they

sentiment Europe the pretty strong by we supported across so are being really And in brands. -- European much for consumer our board, we're

Frederick Wightman

that Perfect. the pipeline, Is was the just also what But ships years And still beyond X plan? previously. guys there deliveries I of comment think expecting in past 'XX, consistent for annually talked zero on a about X you cadence ship ship that's about several or that. and sort for with then the have

Josh Weinstein

certainly Whether that's it XXXX in XXXX starts -- X. after or X will is question It still a plan that the mark. be or certainly starts

you X-plus pipeline next the years, continue about will ever And it's get the if it through the it's and been to our think so over lowest year. way focused, as very much the down we're dwindle we

Operator

the of UBS. from question Farley line Next with Robin

Robin Farley

Just wanted on comments yield to clarify the your to outlook.

back would of be yields quarter to you above that I will you be in QX. by think elsewhere QX not about talked would XXXX. would said be than And QX levels, XXXX that think sort full said each higher per diems You But that occupancy suggesting I be.

like that above seems in it levels XXXX get So should yield to QX.

in. maybe you I'm if there's clarify piece factoring could just not that, there a So

David Bernstein

that basis. sit guidance to fully hard and pricing better like-for-like understand not and indicated, we that. basically, we on rather mix everybody all for reason than to quarter. a give to issues every do we'll the here that of didn't give guidance was we for just quarter. But of up trying was I Yes. Well, And the about each I'd for fourth have, and you each before with said I specific the quarter work what indicate we talked wanted in terms had

Robin Farley

Great. Okay.

right? just not it you you're yield So but definitely guiding you're for that be can't that. clarify above 'XX, in not to I wanted understand QX, saying

release, FCC And about you to then the like -- for being discounts. the adjusted year, talked price and for also in expression the just you give higher wanted that your

I will said FCC you FCC, would that When percentage X% X% you pricing you think FCC so. would that the be a per 'XX think will adjusted diems that, discount suggesting for above would for you that versus Because are 'XX? elsewhere, to that pricing be you point only include 'XX. or if be discount up in be I say not

So I'm it's other if of calling In adjust sort know you're I'm why just I if asking... words, higher the that FCC? wondering you for don't out

Josh Weinstein

Robin. problem, No Yes.

projecting to that's net clear, to the per of X% for diems be are X% drag. Just and inclusive we year, FCC up

that drag, would without So higher. be even it

David Bernstein

either quarter calling of It the we've would last every be that years. after up way. couple out just We been going --

to but call we either guess up be out, continue I way. So it'd it

Robin Farley

only drag, be would FCC is thinking And X% X% or... the right, about -- that somewhere is in it that range the

David Bernstein

bit bit for half on A a second X% Yes, little and the first year. in little lower higher the yields the net half. in total

Robin Farley

is by it be FCC that Great. 'XX? Okay. 'XX, then after fair there by to use And wouldn't assume year, any next

David Bernstein

than It few a It's It's X.X just was point. minimal. less left over.

Operator

Next question the Credit Ben Suisse. Chaiken from line with of

Benjamin Chaiken

and cost, And it incremental or On future? And then spoken the quick normalize the Are does higher spend Or advertising this dollars, able rate? it net follow-up. one, got about what of I've is on to this ballpark is? expense. you've basis points absolute last cruise you couple either one calls in the right then run

David Bernstein

Yes.

X.X net cost points, as XXXX, cruise rate run concerned, cost on the Josh? And of the basis, net is increase. versus net a So about far it's cruise as --

Josh Weinstein

Yes.

cruise means basis. space back. So by what's not. on pleased less we're very and a spending because brands with results We up the working quarter-by-quarter and up others We're what's take the work throttle can it very X.X still the throttle with and to per we're which literally nature, ALBD points, understand than in we can

we as had frankly Some work things as didn't hoped. well

brands it leaning other have stopped they're so the into doing and And things.

about and for over So the fluid be think it what a accentuated I back brands that's the pretty well, over really it think if we quarter, can should achieve. months you, will what last take we've the as last step tell a been results that X what experienced able you have and to be. But the significant you tailwind

Benjamin Chaiken

And Understood. a provided the for 'XX. to on XQ last you fuel, relative then impact FX call,

XQ the color I it it And for does moment? subsequent said $XXX What to moved think any kind You was $XXX million that, on like XQ? then million. XQ, at of look to it

David Bernstein

get numbers me detailed you. the So let for

about talking XXXX? You're versus

Benjamin Chaiken

Yes.

headwind you XQ for $XXX for call, fuel. last on XQ, there'd be and relative call, -- you mentioned On you the to FX million that the said 'XX mentioned XQ

David Bernstein

Yes.

Okay.

Benjamin Chaiken

for look XQ, -- any like as then on very XQ color saying does the would that well. at helpful I'm what be what XQ moment? And

David Bernstein

the QX headwinds. year. of I would fuel QX So be I don't but and can about have currency and $XX QX, full give million you

see. Let's

it. it's call fuel currency For year, -- full is see, $XXX million, the let's and

Operator

Our next of Brandt comes from the Montour. question line

Brandt Montour

impact starting of yields put last fleet book before hypothetically overhaul net there's versus yields. in 'XX. guys your would have advertising you 'XX. place the of now for mixed positive It's push, a was drags residual little in So the and a that with much The did in year. that just see to during pandemic, large guidance, right, plenty but the And obviously, hard

guess year I -- you of adjust like maybe material that you when and this a Europe, Asia seeing a and that So drags tailwind feel the overhaul? -- all Eastern tailwind you have from out take and are Australia you seeing you're out do

Josh Weinstein

that And yes, looking do. lot is of X-year to piece to X-year happened where So that's builds at the together a the everything of a one up I answer we we a period in there's mean, trying over period. are. difficulties

order as just we get There's You be mean able to have -- diems Australia which deliver to was and XXXX our that think restarted about the QX. to a business in in higher lot Petersburg and of St. then you say, quite and X.X% close exclude exclude Asia exclude gap. is -- I we XXXX per overcome

I, of think can pieces to you all We and directions. down that to business. I banter So banter, the it we've are the I we about you I think and boil tried -- different bits we enough. real can in what see But the probably drivers go

Brandt Montour

was ALBD year, was Okay. commentary Josh, and on ago. X X XQ FX. just that at maybe was ago the that, unchanged exiting months 'XX And months your from before then again, essentially per question commentary rivaling follow-up a ex-fuel EBITDA But this Ben's to about wave noticed season. looking I record

feel is, that later? you about So comment the guess months do any better X question I

Josh Weinstein

Yes.

do. I bet You

We can. everybody is forecasted -- we're the the to And expecting XX. on that we outperformed to to and hard basis. XX come got We're we're first working for X/X fruition hard. We're working make as quickly in second that So quarter quarter. incredibly just as working we about

Operator

line with Next from the of Georgieva Assia Infinity Research. question

Assia Georgieva

to rate of the Or more being once growth, Are we the and continuing on the treasury terms we in very again, good Congratulations reducing that X QX. the had order. point growth? grade? put capacity kind investment are conservative, results acceleration build of can thinking with thinking again, the builds, usually get question, question Josh, I takes you for it fact longer-term -- a years of sort given new X the from the new background of you we to to see when of in

Josh Weinstein

I We we once philosophy by a ships give to think, to, X year ordering tried X start again. that using our

very expedition we its be for see. We'll to not push. know by a well it It rate us of experienced ships I anything able X so pay have XXXX. increase ship, generate on to we're for with to up down than debt. lower long sets getting free nature, will capacity order time. and XX plus that's a small a And flow, be cash feel XX, incredibly through very, We very that

and X.Xx mentioned, debt-to-EBITDA back for better David the As decisions, much making to EBITDA get be future. positioned be our to new build increases, frankly,

Assia Georgieva

in per makes believe sense. per year entity? the or we're opposed ships past, that to perfect I the corporate to X looking as -- brand That X maybe Okay. per

Josh Weinstein

a year higher growth No, X we were no, brands. between ships on and much would depending a no. been no, probably the nine rate. have X That Remember, somewhere We brand. have

got diversify over strategy we've plenty growth our new-build So to time.

Operator

Stephen Grambling question Stanley. from of line with Morgan the Next

Stephen Grambling

about thinking the pipeline. ship Just

normal forward X fleet attrition. the about the of did adds, any we Are is but year? could maybe talked some that we you more side now retirement X the pull to be where the equation actually gross lower cycle per in other less expect or should You Or going retirements for forward? the

Josh Weinstein

time. later ships pulled could Yes, some done at we that forward a been definitely have

years, pick time, the of anticipating that up and talking imminent. we'll significance probably next not over of anything cadence So back nothing the couple over but then about you're

Stephen Grambling

Private the talk bit about a Can related investments helpful. Islands, potentially of cetera. you could in how compare you non-ship Grand how yields about done talked et those the projects, impact more And and what past? few to may Bahama, a then That's the you've

Josh Weinstein

starting a footprint as have in the mean, point, I Caribbean. phenomenal Well, Yes. we a

remarks, the jewel Moon Caribbean of I Half Bahamas. the Cay much prepared a mentioned pretty in I in think my being

side, talking more generate Cruise the that destination side. experiences the United cost helps put side. ability brand, to us States, attractive South Carnival very on yield from footprint able but the carbon Coast which the port, to us about short will tremendously on cost also distance help only With for on being the on East the differentiated the Line another a We're of Florida, through in incredibly Grand not side, absolutely the

Cay, bigger open opportunity up will the but not because spend better ticket that form and to pier, our Half board only to on a more generate Moon opportunity adding also in And we're a with pricing onboard us experience of guests, lot that, for more island, what bring a more of destinations. guest on ships to by enhanced doing that spending

Operator

the from of Stathoulopoulos with question Next line Susquehanna. Chris

Christopher Stathoulopoulos

various related going for -- could of likely for cost should we your you incremental and about time how in the marketing through perhaps some for prepared full help about what's, year, we as EBITDA color, you should give efforts any Josh, spent think net remarks. a guide here we put think those or buckets, these these you costs marketing lot of the and Could elevated how as we revenue the midterm? efficiency revenue frame for initiatives in here be versus to said, initiatives

Josh Weinstein

try answer So to your I'm to going question.

fairly with. better the at of measure working we a engine on, those is results. for to for Some people and seen can we've what our We us immediate that see things ability things, benefit, the us to The can brands in-year be be have right? looking to more been optimization, begin search driving

things never specifically some pretty deposit can to doing that. that that nonrefundable We there never have types had brands they other have fare There quickly. up doing brands in done with before, are that year we're weigh respect introducing

as to basis that to our curve other well, and that demand are over be impacts much are but in differentiated we're be things out able a better longer-term the more around how on for year, frankly, not primarily booking being further, just extend There able being time. driving this having going to managing market,

what easy think particularly this to if to don't I but question, year, for. your into buckets fit try that's answering I'm of were sure not I'm you EBITDA looking candidly, So it's particular for so

David Bernstein

all efforts The -- going I did XXXX. Josh Remember, is efforts comparison all to the our pointed that We efficiency there company. out, different the that of are are cost guidance. X-year a numbers, to around on cost thing over only This as lot into in period. build want of a is add

during inflation a that has been well. built we X So there a have lot efficiencies lot of of but as years.

Josh Weinstein

improve? with to operational back overall, at how tried cost stress we that. but how advertising, concept an step we're We're multiple are a ways we the business And structure, sourcing ships We're our taking just the do How through to benchmarking, And the throughout. looking of starting further across That's can already. spend leverage seeing an We're can global know looking industry-leading will we're maintain which looking want and like some we standpoint, from things we our brands. same certainly initiatives. class and at our benefit we've Yes. of from of always that we to continue, ongoing, better? doing

in really Some make we of XXXX. which way in XXXX start will and through our factor as benefiting

Christopher Stathoulopoulos

little or a up, follow you more of a if to bit direct will. And Okay. question, tougher

kind some December. we up will. part guide The mix, cabin reason, around of around and is the stock I guide and confusion sort capacity your if brand points that, a enthusiasm guide time, January cost X.X And you accelerate sort of around or into here of from typical of the at believe mid-February help for some Carnival recovery. at that capacity of if and that there's that was your unit think your would X% look is up the around margin So about

X.X that here the I So you or risk around here? what say, And really least Carnival mid-single-digit off here this of would integrity cost Carnival is liquidity, is to in the numbers mean question table. today then higher response going to concern I update and -- is some we is revert what have I've pricing the at that just and of that not in sort its to sort say And old if growth would what by playbook, back the response? you will? that But you then would say of for the a half, the capacity guide where first guidance with today gone the

Josh Weinstein

Sure.

just saying for in of until demand of to that our were what we've clear, because the because strength seeing doing. is in capacity difference been brand the only last quarter be we So from what now Costa the we're

We going to a earlier we than have it's liquidity because going EBITDA. opportunity drive to ship which the is expected, to introduce help actually

very about good decision. that very, feel we So

side. well have a cost record on of the track actually We doing real

given quarter So that the we think We're their set more about and fact plans, enthusiastic had talked type wave, now in then well of we're Everything we we'll just breaking the record more pushing in are I forward. that if last can that brands we discipline, holds. maintain served. still be else

David Bernstein

I earnings give call on remember, we occupancy. And early the like with We we forecast increase would to back the our associated have month. cost. -- was The put add higher the our very last November. together And majority in in December, of

was February. And together we we that so a January of Black and Friday, all put record forecast the bookings Monday and Cyber had that to December, throughout prior saw that

don't occupancy change go So or when the on got extra change. costs denominator are unit because the on board you've the doesn't your ship, going little bit a basis up a remember, to ALBDs

So liquidity liquidity. adjusted driving -- driving very higher, good all EBITDA it's improved news,

so were And more confident December, than Josh indicated in are we we we today than -- back as far before.

Josh Weinstein

be I think question. to the this last has Operator?

Operator

Yes.

David Bernstein

question. more One

Operator

of one Paul with take question We'll line Golding last The Capital. the Macquarie more. from

Paul Golding

under and of lot cold and ship. a that way through of to potential COVID in terms a warm I wanted us a the a I and is dock to quantify us for this of what's this that there lot left? operating think a through, worked that? has of were recognize layup, for there impression ship from dry is ask been around I other perspective. Is a reinstatement But quantification the this of

as anything next we marketing, the spend, necessarily in then And at relative and cadence the offset about secondly, Asia on on but year not look change? we think year, total restarts Australia and to cadence,

David Bernstein

Yes.

on that far ships into dry years dry depending once last ships the of either But ship, is into dock go as year. twice of dock a every went So to dry -- dock age lot keep X or in as the yes, the there ship every depending were have concerned, X years. mind, on

dry there try it's we're docks and always differences, give vary, are year. every going lots do we to and They So to -- of have indication. an

docks unusually XXXX the restart, on far and as concerned? was high because forward. regular on is as the year cadence that basis this expect the every year we an restart thereafter And a do but as of go dry year we

Josh Weinstein

do the for quarter-to-quarter, year. of consistent worth the think, Things is I On rest pointing nothing, pretty front, out. the slide advertising quarter-over-quarter from but it's

David Bernstein

indicated our before. plans as Josh And change, might

that So it's of very hard give detailed level guidance. to

Josh Weinstein

thanks, I joining and quarter. with Thank say talk to have for So next everybody, that, to you. you

Operator

That for disconnect and concludes thank your today's ask please you your to participation call. you We lines.

Carnival Corporation & plc (CUK) 27 Mar 232023 Q1 Earnings call transcript