Earnings call transcript Q1 2023

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Operator

Good morning, and welcome to the Norwegian Cruise Line Holdings First Quarter 2023 Earnings Conference Call. My name is Paul and I will be your operator. At this time, all participants are in a listen-only mode. Later, we will conduct a question-and-answer session, and instructions for the session will follow at that time. [Operator Instructions] As a reminder to all participants, this conference is being recorded.

to Vice conference ESG President Communications. like host, to and now John, Jessica of would turn over the your Corporate I Investor Relations, Ms. please John, proceed.

Jessica John

us everyone. Thank business and you good Paul, call. first morning, you, for XXXX and update joining for earnings our quarter Thank

Officer. of and Mark today joined Financial CEO-Elect and Cruise Holdings; and Officer of Executive Del Line Vice Holdings; Chief and Chief Rio, Norwegian I'm Cruise President Harry Kempa, President Frank Executive by Norwegian Sommer, President Line

As call website on www.nclhltd.com/investors. a conference the company's webcast reminder, being simultaneously this is Investor at Relations

will slide be call, We days also Relations call during make our available on will a reference website. also XX presentation for may presentation today's the for conference to and following which call. Investor Both this found be replay

I'd to few items. begin, we a like cover Before

could results that with conjunction Our and includes available These on press with release This from earnings considered such risks Investor in release. statement quarter involve the statements forward-looking our to and our is statements. should in contained first call issued morning be website. that actual Relations results cause our differ statements materially cautionary this was XXXX uncertainties

reconciliation Our contained release financial non-GAAP reference may measures. the disclosures financial presentation. GAAP and comments directly most in comparable measure A associated also other earnings and to are our

like that, Del Frank I'd to Frank? With turn the to call Rio. over

Frank Del Rio

everyone. morning, us. joining for and you Jessica, Thank you, good Thank

heights. Holdings XXXX, next final XXth was I incredible where it In form marks leaders generation Cruise best brought years, the its opportunity of call me brands: company Today who After together my which now ready and a to upcoming it energized President and Cruise my to make the lead retirement, operator Regent Norwegian and three the over given next company time one of leading to announced for take Seven way month earnings for eight and a me significant Line to cruise in Seas greater incredible Cruises of before milestone is into industry. as for was this Lines, is we Oceania the chapter, the Norwegian just CEO ago. this onto Cruises as are industry's

to getting main value the take appreciation moment want who success. shipboard driver all are and its of travel of proud a and all members years. your thank to I over our and partnership call, we want achieve, the team my to of I few partners, I'm Norwegian's all to sincere of the support past especially who globe, this the for and of able express you to loyal have the Before ahead the are to crux company shipyards, the around accomplish together. days best guests, our I also shoreside, for company still to lenders, that investors, stakeholders lie continued years, this but collectively forward analysts seeing I the know challenging over what incredibly and look of extremely what been backbone

most of Sommer this the Harry helm, in leave With capable I hands. company the at

that makes experience Harry in the of has one assure leader I talent, strategic company have innovative you executives lead the I history. energy he broad the course him is and and that in to this his can of set over in capacities industry. Harry at three and As range a who skill with and time decades, right Slide the shows, X of a various depth the has premier worked typical

seat. perspective a to veteran, this As brings and industry he continuity company a and longstanding fresh cruise both

momentum we forward I that now a and seamless am not continue along the to as have Board working beat management experiencing transition to a NCLH for We and team rest we senior are skip the today. Directors and been with confident of push of time our together the some capitalize ensure on will

the total we fleet, details incomparable X. amazing Slide XXth XX,XXX Now fate the coincides you not Oceania those berths. times, with week, circumstances, there vessels happens about which as to be bringing ship just of founding can see delivery the of With this and of the great of seventh the one only my departure are of times Cruises, also took Vista, on last ship the in anniversary but delivery when meets over XX this pride, fleet to Oceania NCLH's with

christened We this Emmy in over De Vista food Award-winning personality godmother, heading Malta are her Europe where week by Laurentiis. be to will Giada

named ships are with to is Grandeur guests, first Fincantieri Seas with life Cruises' line, at expected the Norwegian of further Regent Vista X,XXX a position just space. These and fleet second who later leading in thank is and delivering year our Viva and ships truly pipeline year. What that ship this Allura XXXX. cruise ship. is once three have to Seven a again, of the that vision Oceania in joining elevate magnificent for upper bringing exciting the will At the I partners first Class premium the more we have two Allura even in this Vista is the our cement newbuilds

that those introductions new-to-brand halo as effect as much our hardware more with from company new-to-cruise New well three guests, in year past our and to one excitement will for of ships so leverage. loyal generate mean a

are are growth the it's industry's nature of structure, new financing and made be possible expansion. future contribute to to earnings financing of efficient expected drivers very ships meaningful the ecosystem, immediately the unique their company's margin able Given interconnected through and

on provide and the the Harry? the ahead, turn be tasked an Harry, we we horizon. I'll now will update So with who significant catalysts have the on environment key over to current on see delivering upside the call to potential

Harry Sommer

Frank. you, Thank

to taught career so be I could helm Frank, be in up have say in at grateful the honored last your me iconic to that had under only I'm not I know to three early and on the to Bronx, I company. but And you entire our the before given started, a speak company such brand. to the I remarkable to NCLH look this and But I company me I to everything committed with never contributions to you decades. success. doing and of forward position on to for the wings storied opportunity when parents the lead of can working-class continued team broader get have countless this behalf legacy this building dreamed I I immigrant industry. much also Growing took Frank say, thank your best I my cruise over am for

finetune months, team the Over executive future, our destination and few for travel plan and vision you. be working while with community, host constituents, details to look the speaking with to I sharing of investment the members, next whole representatives, and closely a I'll forward partners, with our team

Slide have that Shifting our covered our leadership be so ahead X will demand not transition the for attention could backdrop continues the see outlines to I healthy me our environment. and catalysts what positioning current which now and horizon. we lies a already, so ahead. gone key skip to optimistic on We makes what the smoother, to

remains target and travel consumer resilient for persistent with desire a Our experiences.

window, booking Our which indicator, forward-looking best remains is our strong.

of did in financial were booking the cancellation volatility unusual encouraged banking to sector-driven market fact, In that across even experience or our not any any we activity see March, with brands. we

pleased are financially, of best strength how of Our with regions. also and depth across indicator and onboard consumers revenue performing revenue the is breadth which generation, real-time the feeling is even ships streams, well, we exceptionally our and more are

offering. onboard nearly best bundled passenger than This enhancing focus gross market-leading driven XXXX quarter, and our higher the by on our in the XX% the cruise During per period. guests revenue day is comparable part was attracting

more We and increasing capture revenue cruise. time are also quality pre-payment the to with to prior guests, our even starting touchpoints with of booking,

day contributor onboard revenue pre-sold on not who make as Our to significantly to double our more onboard XXXX, do first activities. for than strength, guests a revenue XXXX who important basis approximately quarter purchases per guests is the in an level pre-cruise the pre-book tend passenger spend of

to next Turning catalyst. our

our day than was capacity only cruise of savings strategic adjusted were We initiative business first fuel fruit in enhance also half to XX% improve certain by outperformed not our already second of to by our cost as beginning quarter earlier are this demonstrated net below actions continue which the XXXX, operating guidance but take and run right-size rebuild the and excluding our base cost efficiencies as The results anticipated. to rate to bear margins. realized per across $X,

remainder expect to continue metric XXXX, this as the show on X. We of seen to Slide for modest improvement each quarter sequential

and want will a that do. continue stress leadership. we while ongoing start, be is work is I more great a to recognize this to have we under and much very initiative my priority top This acknowledge, to still

recovery. continue that decisions in and every our opportunities incremental are highest we invest evaluating experience, does accelerate where strategic business, but to We not guest data-driven even the our impact. or This are area ensure help to and our product will investing we of most committed returns to making and service margin mean, when that offering however, enhance the not see be identifying will to across these rather more we we

past point low-latency propositions of cruisers A strategic balance, rollout in one from good guest incredibly keeping from Internet fleet hear a address cost-effective example pain experience intact, and is connectivity to sail announcement internet the on vacation world-class is in regarding reliability This we critical is and Starlink what fleet. guests This of right example broadband our attract recent value is help new finding the brands' our the our manner this initiative which on speed best focus to sea. regarding the loyal believe of system continually consistent our phased the the of base, and our is maintain across at the to world. we our a

elevated markets increases catalyst in next already And XXXX. X,XXX briefly. this just to X, as profitably under-penetration our is brands as XXXX Slide newbuild Frank relative to expected this XXXX touched out of pipeline industry-leading berths well-poised around All world. our compared XX% The to be three given versus the add XX% is to in to over the five on size years, absorb are look Capacity last on capacity of growth highlight our fleet. many we and approximately shy over we world-class growth growth shown to our which

both compared investors on This attractive of capacity better consistent winning this levels. yield to earnings we moderate makes ongoing growth and this for bottom-line. significant for on benefit our transformational scale and an to including growth, focused on by leveraging are the efforts We this as with today's top- potential adds the combined point a period power maximize our as as we When our fleet, newbuild view existing into entry growth to outside embark formula. translating profitability future year-over-year pipeline delivering

now Shifting and our our pricing to demand booking trends. discussion

above occupancy factors we three significant can in closed of levels and voyages breaking guidance our You the XXX%. exceeding also for we years versus this XXX.X% Slide quarter, time With XX, on with occupancy levels. have nearly reached some first see exceeding in triple-digit first load the XXXX gap the achievement,

to and the thirds slightly quarter, brand, pushes the strategic sold. what average longer, fully cabins with we average shift expect levels mark, of XXXX more naturally resulting the In Cruise fourths, while second at occupancy less immersive below as a over which to a normalized in our above occupancy, XXX% is itinerary return time. result to all This levels is enhancing Line Norwegian margin passenger XXX% historically

in XX. to Turning only out and cumulative performance XXXX, strong ahead we record continues for prices. strong, balance and be higher sailings our position a the further but wave Slide remains also for look Demand book very the and as not of beyond. of at to pricing After XXXX XXXX's XXXX season,

XX% example, at than an average XXXX the To suite. an give was were per World launched World which Regent's price $XXX,XXX Cruise nearly XXXX higher you point for pre-pandemic, World Cruise Cruise, its bookings over and of last

product first achieved to CruiseNext previous future onboard with in CruiseNext of In that indicator quarterly history, record. its the the an certificates. program continues our in we strong is cruise result sell highest guests Another program, the which program's performance our the resonate NCL's surpassing non-refundable quarter,

net Mark of through healthy gives coupled XXXX will yield look more demand net achieving we guidance, metrics remainder in the on As year, experiencing momentarily. our confidence we are detail the a position in which diem, with continued per the us substantial book touch our

the & our like efforts decarbonization I'd as turn I I'm program something and update Before Sail call to that provide to very advancing. part over, of passionate an our Sustain, on sustainability committed about global

net Day we coinciding on emission with us gas to greenhouse XXXX. and last guide announced our zero shown XX, new targets on reduction near-term help intensity of As pursuit by week, Earth Slide short-

of GHG by a by our are our the We and XX% of XXXX emission consumption. fuel these The well-to-wake as targeting impact XX% XXXX. reduction intensity full targets scope well in as direct cover

to expect consumption. but reduced we on fuel savings a only this execute cost we As reductions, not see initial dual plan, benefit from of also

which strategy, key climate also our innovation revamped We collaboration. and pillars: is efficiency, on centered three now action

solutions to modifying including are We solutions, the configurations, our way. to efficiency are our of create future along for for in two stakeholders Methanol-Ready and our today, collaborating with implementing with investments innovating committed and future newbuilds partners

I for Mark With financial turn will his that, now call commentary position and Mark? our to on the over outlook.

Mark Kempa

Harry, you, good everyone. Thank and morning,

his order continuing work financial role dive momentum value to to maximize results to experiencing to he to our also leadership. the thank forward and all company I as with Frank well we we as all for done look into outstanding to the Before capitalize new as Harry in in partner of stakeholders. for want I are on has propel I outlook, this forward his that

results, and on net per my and cost fuel on constant adjusted basis. will today yield per cruise diem, net financial Unless XXXX net financial capacity commentary on on My is our guidance otherwise recovery. XXXX noted, first progress quarter metrics the day commentary a our excluding focus currency

for our key XX quarter Slide metrics. report highlights results, exceeded met guidance are all pleased which that to we in we or first

approximately on factor day a of our of approximately up passenger beat of increased while per well X.X% was the in quarter with X.X%, yield healthy Focusing XXX.X% XX% Net net per expectations, versus end the total of in load high revenue as XXXX. guidance, achieving came cruise versus ahead projections. the top-line, diems

our allocation net of result ticket when representation to holistic changed, and yield total of pricing and With revenue to bundled between higher compared accounting comparison. as onboard participation which significantly the focus diem our skew as also we can the on today power. Therefore, 'XX, has a offerings a better enhancements net per

the implemented to were approximately in cost and as day than areas $XXX well optimization, and the capacity identified in initiatives half expected travel costs. reflects last crew year, Turning includes quarter, the which anticipated. the net This than saving some initiatives, chain Adjusted in of improvements of supply excluding office lower run as cost better of This cruise execution realized XXXX. as expenses. earlier second than averaged such and costs fuel back XX% per rate rapid

$XX $XXX million nearly was our EBITDA approximately than the Adjusted in higher and million quarter. guidance

addition, In loss of our adjusted also $X.XX, guidance. beat EPS

attention to our Shifting guidance.

Slide be outlook for Our the on second XX. can quarter found

will have occupancy stated ramp the complete previously, quarter we As our second up.

XXXX. that and XXXX year, Baltic to did not comparisons addition, premium-priced In includes certain which we Cuba voyages in operate in

X.XX% As growth our result, with net is increasing increase approximately net in and expectations with yield a diem expected line X.XX%. per approximately X.XX% to X.XX% to to

extended to the of Pricing in both our the This exhibiting half part, various Fourth shift deployments driven quarter and and organic for as the favorable in with Alaska quarter rapid Regent strongest with operating this Oceania exit the well power and capacity our a our more the from year, versus and, second as brands. premium of are as fourth and by from expected the is headwinds second to XXXX. benefit Cuba strategic those with yield and sailings. expected increase seasons resale shift comp XXXX mix half growth year, is a included to the like by close of pricing also European

the year, book sequential growth. can Given balance good second the visibility our of of year-over-year which position we of improvement into confidence for half achieve is XXXX, us the that gives robust have we which and XXXX, the ahead

day expected initiatives the versus realized. net a as Adjusted cost additional excluding quarter, prior capacity approximately are improvement fuel $XXX is cruise per quarter, further second in the be to savings

a already reported XXXX, lower which a sequential rate our than result as run modest increases XXXX in each have This occupancy We and continue should level been identified to of result in implemented. full exiting results. cost as year expect improvement initiatives quarter and

adjusted expected gap roughly Taking levels. versus of is stepping EBITDA is XXXX, approximately to this all be EBITDA $XXX the into pre-pandemic quarter as level the in closing the account, same to for second another same which quarter of stone the million,

share. I'm time at expect positive another for pandemic also quarter in the adjusted with since first milestone $X.XX that EPS to pleased per we report achieve the approximately turning significant the to

our end year range EBITDA be to the record to our year. company. for FX Adjusted This quarter above the is $X.XX by the or EPS $X.XX the expected of focus the EBITDA $X.XX for higher Now costs prior with to approximately the outlook of is reflecting our targeted shifting translate to to $X.X full adjusted in high fuel representing adjusted range still billion expected anticipated our of billion, the first partially remainder offset for of and guidance, outperformance, XXXX.

compared year to growth net X% guidance guidance. components yield X% approximately closer a versus approximately of to XX.X% XXXX, the per of are diem net to outlook, as X.X% at unchanged prior the full and growth of Taking look our

net is $XXX than the of average costs guidance approximately compared a costs, half in excluding Moving year, better the on expected in slightly XX% capacity day per lower-than-expected to XXXX. first prior to $XXX cruise the adjusted full second decrease average quarter. as represents of for to This cost fuel reflecting our the and

noted, As to over operating demonstrate and guest exceptional this deliberate continuing the Harry are improve forward service we and to opportunities look while to known for. levels coming and to improve evaluate are accelerate We improvement superior taking our all the revenue brands efficiencies, actions quarters. experience our continue maintaining margins, to

is provided We've year your large talked go of earlier a address on reference. majority Slide our Turning today, further for of million debt actions for summary won't XX Slide I provides financing. profile, export of year, ship XX scheduled portion is agency-backed which to credit to so which our the our approximately attention remainder of to maturities, vast into XXXX sheet. a taken previously service the about debt balance the related this our but includes $XXX maturity the details the

up signed Methanol-Ready as four order last approximately goals. was our our Prima of the and by spoke, to This agreements make as the XX% the commitments Class reach changes these communicated currently addition two billion. to to to last ECA-backed to first-generation larger our future-proof on €X.X them decarbonization finance and the ships includes increase well ships, the previously improvements we than we across three long-life and modifications brands. to assets also ships configuration primarily optionality to help the increase to Since newbuilds last This

related well financing also center covers with The newbuild service financing supplies preparing owner associated as premiums. certain as

fund this generation While to to and agencies cash for was minimize the very financing originally export we few financial plan the our were a action credit given the received prudent and the efficient ordered, supportive next the macro originally ships markets, with when flow in organic continued outflows we financing and we cash this felt uncertainty years. from

liquidity. to Turning

position $X.X of $XXX our availability not billion, $XXX cash the include This approximately Our future strong is XX. consists our separate but drop. million our equivalents, of overall to not undrawn does enhances backstop This and available and commitment. Slide at liquidity liquidity cash commitment, $XXX currently approximately million on outlined million which million nearly remained of revolver $XXX under as undrawn

and want commitment focus our of all our delivering value for relentless reiterate on I to stakeholders. key

for we will feel financial about backdrops. taking recovery, right to today direction the We and macroeconomic to a resilient our to create and believe Overall, our of the the optimistic future. we adequate adapt maintaining to options flexibility continually nimble organization more accelerate evaluate we steps are business while different

to Frank for turn I'll back comments. it that, closing With

Frank Del Rio

Mark. you, Thank

which some the to takeaways, like key can on Slide to turning you you find Q&A, with call Before leave XX. over I'd

First, healthy demand from we on cruise target and our vacation who travel. spend and to see eager willing remain markets continue resilient to

pricing position to with our continue book demonstrated of brands the 'XX. resonate consumers as by Our for and remainder

of gives the also position the book and us visibility record high half into year beyond. Our back

and makes ensuring benefits continue starting the brand we measures that enhancement so company of best already efforts, are keep our to sauce that we to while to see the strategic take next position fully special the its for Second, we'll intact. margin chapter, secret our

deliver to we boost confident on we industry-leading power. meaningful growth our Third, future providing which are a we are earnings profile, can to our absorb profitably excited

restoration prioritizing liquidity in are And and committed our comfortable coming to years. feel we balance lastly, of with sheet our position the

lot today, your a Operator? conclude our commentary here open and I'll for covered so the call We've questions. up

Operator

Thank you, Frank. Instructions] [Operator

Jessica John

top avenue all get Before want our to shareholder from questions the online address another upload our which investors provides the to submit to we we questions Q&A of first for a and question on platform, management. line,

this received to the will points the to what the ensure top do take you main action The one? are year in quarter voted ahead? want question was, we company growth Harry, that three take

Harry Sommer

Happy guidance to, laser remarks, a this yes. in our great on question. are touched and Sure, financial that's focused already goals. delivering prepared but our on 'XX we and We

growth us One I'm with of year going be three might going I taking is biased, the be add of robust this drivers and platform new our of to to delivery newbuild absolutely but the which incredible nearly Vista, sailing when to ships capacity to along magnificent compared additions ships XX% translate of this including XXXX. some other with growth start tomorrow. year, a recent our Those in

that's future a So earnings provide to current meaningful our power. and to expected boost

innovative stone work to leave delivering We're and product hard at not new also no also identify continue more guests. to we'll ways pleased with our but far, margin our unturned. and We're we're for service and offerings results and stopping best-in-class there while initiative so our at the efficient to ongoing enhancement get continuing

capitalize to book position experiencing, including generation. the is which and translating lastly, we're on robust onboard very to continue revenue strong going consumer demand robust our And record pricing, we're into

our So, and power all to we year the feel deliver going about our over goals. we're to position our on in next good everything do

Jessica John

can we take from operator, questions the line now. Hey, the

Operator

you. Thank

first Wells Please Dan Fargo. question. Politzer question your Our is from with with proceed

Dan Politzer

getting to everyone. all in role know good and storied the best the better. wish Hey, on Frank, And forward your congrats a morning, and luck Harry, new to you you congrats look future on endeavors. career

on we were mean, bit yields. I they little the a the I than quarter, were think expecting. question second First lower

to versus I first little quarter Thanks. gross there? there more any change second noise quarter? in relate net, detail guess Sea and the on the the Free there just first program, was bit zoom the trying in any quarter quarter just a also the to between that the and maybe But So on at would

Mark Kempa

morning, Yes, good Mark. This Dan. is

no both first line thought So, yields QX foremost, and pricing are were be. and there going they is where -- QX we with change. in to exactly

as i.e., course, your very remain pricing inside But power on bit meta] up, do cabins. little and ramps healthy occupancy you [lower overall Of NPDs strong. your a less see of (ph) our

think And XXXX, XXXX to piece second I you as is very we Baltic Cuba some the other comps versus strong well itinerary. in with over then the look at the secondly, comparison when had we're comping quarter back as do difficult a that full benefit of

while there assure exactly surface, second be. -- is it -- and So, very growth. remarks, pricing continue and the to we bit on XXXX expected a in it is continue QX, we the appear than and said as expect it my I is is yield of half prepared strong it may that softer you to And I where expect

Dan Politzer

we big And commentary how to the expect And to it. first quarter down extent conservatism that cost uncertain the on cost macro. step year? guidance know Got to then, throughout better. side, should of I a your what on was I there? the that some quarter much part continue guess guidance, was last the is just the reflecting obviously, the

Mark Kempa

Yes, sure.

address first. side So, cost the let's

than we had onboard And lot into on in enhancement were we QX. last we anticipated. a going initiatives quicker initiatives. our executed as of those So, our of our simply we I had did margin call, And communicated, had overachieve we communicated -- some steadfastly

simply benefit our we quarters a did baked to outer already while because the translate a So, benefit doesn't in necessarily in into it get had QX, guidance. we that

our That to and continue said, cost not to improve opportunities have we structure. we look stopped, at

All on think you we improvement that but -- I additional So give a bit color are early very that. tell razor think And we I'm focused sequential continue a will have I can us it's is confident. and on for I to that. to quarter-over-quarter,

and think to last not updated in year full a We've think we've our I continue quite we nervous our in demonstrated will achieve that guidance, demonstrated push cost of whether hard bit quarter QX. on could savings, and you were that we I that. or

Operator

Thank you.

question Wieczynski Stifel. your next Please proceed from is Our question. Steve with with

Steve Wieczynski

welcome. for you your luck Harry, morning. golf Hope some in Good now. good guys, you Hey, thank up Frank, take retirement. service.

little every the maybe I'm But we you if Mark, So, Dan's Slide laid out of look guidance destroyed first in February at mean question ask going differently. look bit quarter. back target XX, a I for to that if you basically kind --

if fact full at guidance about you that full fuel that that through there, EBITDA I through, to beat just pretty didn't headwind So, flow And really we that the here, but it what us I tough end guidance. to much to quo would of guidance stays and to full it think year from seem customer high maybe is be your not your getting look, understand base year of status get and exceed that your would the your here end top even guess a beat there's I'm

Mark? missing what there, So, am I

Mark Kempa

the But adjective you underlying Look, guidance. to our Steve, foremost, our at would of the business. first we appreciate think used Well, of first to guidance. beat look the and I destroyed say like all, Steve, healthily of we have I I fundamentals

consumer is consumer our in very is to that. The is tickets. strong. strong, on consumer consumer Our NPD and with more buying pleased still And before spending The be they The with we're board. cruise continue The yields board. buying is be to get expectations continue pre line on more

by beat okay, you year, we and you half -- FX of isolation quarter headwinds. So is just being almost fuel $X.XX, but at eroded the of said, the by and QX look rest you that took the in and if

carrying we it, through. of remainder the So, are

our we're trending reflects I change while guidance think guidance healthy. that. of to our ready I necessarily And metrics, not the think and we're So, rest we're well trending

of of terms for terms wanted looking cruise. be very continue demand in prudent very, So, that deliver that our hopefully to to are overall beat. the want healthy We'll consumer said we last things But in quarter path. we perspective guidance. our from We down and

Steve Wieczynski

turned Okay, you. that as And to noted you year. February, Thanks got Mark, guidance back well. that, then, probably initial in go your the Mark. back we you for for you If

then range. give at give And historical understand but don't booked XX% and exited also for now are wave, be there. think look where of you us numbers, was 'XX want which if to can 'XX? I exact maybe I kind your maybe that, around now as about helpful think And us a you in it you we've qualitative eventually booked, help some commentary would maybe was

Harry Sommer

take year-end the before be I'll start you that We've and question. one. XX% for And booked kind for I at Steve, is our the at Sure, stated your the goal XX% thank words to months. of XX between that following initial

applies like of range end of end we within exactly to pretty at that we as well want XX that to much be are where booked I to the wave between the following wave. And hardly that XX% for XX% the range, say months be. think can to I that we

were we is very turned and the doing itself position well. way out wave both basis with our on XXXX book a happy very of and to So, compared

Steve Wieczynski

Okay, Mark. great. Frank. Harry. Thanks, Thanks, Thanks,

Operator

Thank you.

Our Cleveland your is Vince Please next question. Research with question Company. Ciepiel from proceed with

Vince Ciepiel

and about for and And Alaska region? filled this the talk seeing? Thanks at regional Caribbean. through moved pricing of first you for feeling half little How looking you're out, discuss have that a summer you've pricing you of dig more close-in I of little Europe think year Can and the into demand you're waves for bit kind is weighed of what kind to now I summer? for taking my about question. a how setup. the heavier the wanted more

Harry Sommer

us take premium one I'll We're booked we QX. surprised new our very overall itineraries bookings that being larger said, QX. very the we in close-in too. advance be with business Listen, in as pleased does a demand close-in results pleasantly our -- a little further -- in Sure, percentage were Caribbean to. Vince. it's with trying were for not I'll with as Harry. that so such represent used it of That to

Of matter QX for Europe Caribbean beyond and course, that doesn't much all we us our deployment as to shift Alaska. in and

especially period. So, advance, price, we booked the with occupancy demand a summer close-in less both happy little but we're for further as in are and there key

Vince Ciepiel

following would some just change the any that to that Great. pent-up maybe COVID of levels? relative Thanks. you've was kind think of wave year-to-date mid of core And bookings color in sounds demand at of the restrictions the it factors? wave pre-COVID cadence year. there adjust seen part I kind on to when last accelerating for things stable, are has a or those been But you decelerating say like late basis of you on healthy. Obviously,

Harry Sommer

in about versus capacity have for XX% a we XXXX. XXXX increase Look,

seen our XXXX. So to during XX% need levels we've QX absolutely compared to course, of of those higher. And be bookings or QX booking exceeded period

think I advanced indicator revenue. best the sale ticket is us passenger So, for our

book position of sheet I a balance how robust compared think up gives you QX indicator to is the XXXX, XX% looks. Our our think end I which very of

Vince Ciepiel

you. Thank Great.

Operator

Thank you.

is question Please next Brandt your question. from with Barclays. with Our proceed Montour

Brandt Montour

to both Harry. good everybody, and Frank morning, Hey, congratulations and

improvement throughout we So, a and first Mark, question is obviously, on trying year, quick the dollar seem on sequential of try into would if for sort cost sort year. the us with Can back of just I'm see a full trying high basis gave now? the to it's help seasonality like with -- you different what's reconcile very you to a and we the itineraries. usually exotic that's given side. update of pretty costs it And and business the in that improvement, elevated modest I'm just kind to us almost from that XQ And being understand your flattish more why used level. pretty implied

Mark Kempa

Yes, morning. Brandt, good

that what as newbuild well. about So, looking I is you this have to taking think at think our we're year deliveries

and quarter. of delivery we that the in cost and third We'll obviously a quarter. we're second of fourth deliveries now ships higher a of taking have about taking in are brands third we have what's operating higher the be Regent. taking obviously And the quarter Oceania and in ship we unique -- quarter the So, -- fourth

receive bottom-lines that. that does do both from top- your the on although and elevate benefit unit we somewhat So cost

be much It's I would itineraries the variable our promotions big skew really have going costs. costs Overall, a premium So, of are levels to too cost that wouldn't advertising same. the influence. tend and to any remain of sort that our driver around

of that. we're build our one to bottom-line, we'll cost market do demonstrated job on leveraging over to hopefully continue think can we last that We've We're we that of our prove few need further better the continue continue the of scale optimize hopefully, confidence And step to structure. confidence journey. next and to I that I achieve to and ability. to leveraging that best that, look, So improve we we've a quarters, sequentially scale. our quarter, our said the around

Brandt Montour

summer, sort that Is strategy to the prices the And of should is a a in with as bundled it acting than guys for or consumer? happy year sort a 'XX? -- was that factor Mediterranean. about And your broadly this important that. Great. think of bundle as Great is the if for that? just you are all it Thanks more I'm flight of more for for about flight in prices book then book follow-up. being hear you -- think now the headwind, we that your in summer curious is and your is just if how

Mark Kempa

overall matter Yes, XXXX, sell our of that's what our the on you've prices flight whether which course, as that consumers hit full strategy elevated. our we think We've be over bundling the advance, or air good experienced prices. all simply a and business I does last right? believe really best consumer, at in that's in with are throttle are headwinds we've is that yield. out net Brandt, to traveling it, embarked for projected to we are And a going the it's we very And the booking when have years some traveling, to of thing. taking few sell consumers the far ticket And

where when given be is to nothing have there's to our flight some right thing the So some until that may we air you deployment. us. some our to But And believe puts going variability and overall, actually that in strategy be variability there's but there, do strategic going overly purchase always takes concerns you in the there. itinerary always

Harry Sommer

the they Mark's as comment there's that their And a choices, tickets have air I year, for buy cruise. we just air course, two either we own us. to of to air add use some with to environment, want a automation, book we think leverage best AI really in tools, of best And terms to time all actually in prices efficiencies tools when to there. And advantage. provides through they those their the us make good to guests our make is. bundling have and competitive future get flight arrangements predict to types out a of fly to this guests arrangements even or systems a over X million uncertain We

we absolutely But So right, it impacts us. to if do our something we benefit. it can turn that it

Brandt Montour

That's great much. so Thanks color.

Operator

you. Thank

your from Our Research. question is proceed with Melius question. with Cunningham Please next Conor

Conor Cunningham

for Harry. Congrats, you time. Thank and everyone. Hi, Frank the

net Just a up per second half, it's half. decent on step diem, the second the implied in

Just with trying comfortable how to get there. you get

trends how in, basically you in booked above Thank are you. trends now? onboard a helpful. just be would you're And of right second And soften get the So you half color on bit? the that then kind any as expecting little closer

Mark Kempa

Yes.

second premium some our on our that or recall core our back slide, on vessels. we regarding very we're roughly It's expecting correctly. one, bringing brand that's I XX%, just yes, labeled on of number good And of the back also So, the think on half XX% NPDs, I if growth. old-fashioned strong of

And sell also a Again, June efficient Cuba very back you the mix, at when importantly, in, had of half look XXXX. inverse course, versus the to in tailwind. believe, you to half we had pricing. I exit much in of more then, for look of rapidly voyages as July brand happening over of we're that's what's But first comparisons, comparisons the in easier or And close those XXXX. we the the rolling XXXX, at

I more the of Europe in season for in QX, we neighborhood QX. substantial where and are as believe actually we in it's X% in in more the I of -- power, we a European have our Alaska Alaska this But season deployment think quite as year. of pricing well the in And longer deployment this amount longer somewhere QX X% expect also year deployment

So, those what confidence great gives when that's is. our -- in factors all pricing where good you combine together,

on the tail Harry need we're not look, book whether question was currently, to be we're or goals I guidance. we And exactly hit think booked our end our touched we're where your and -- to earlier, position, our of there it

exactly to we need much too give be. that, other position won't we on color in I where we're -- need but So, a than

Conor Cunningham

longer assuming on to then, the And X in helpful. rebuild XXXX occupancy, in overall? more your And That's the figure second point shift quarter? change reflective gap to limits to cruises basically that I'm change out the an no then, overall trying occupancy cruise, you. just of Okay. that immersive the and to is footprint the Thank in

Harry Sommer

I'll of the little rebuilding think question can still XXXX, part a second in listen, QX. there's of terms take your done first, be I in that So,

periods some than to finished forward basically as QX QX can up So, talked when represents the to the well. we of difficult that going also time need the I overhang we're better future more we we in lead But have to of advanced we've our have exotic think what and XXX.X%, going QX years book do fully see at about beforehand. itineraries that

think this that Asia does gap support we're our of the bit close already. need goals type get shift and us to to customer this revenue that going X%, gave growth We a allows commentary reflect in and little the to as well, get for we forward? Alaska, future. but revenue terms after the Europe you to much to what our of In itineraries, that I Pretty QX primarily of premium

Conor Cunningham

you. Thank Great.

Operator

Thank you.

Our with proceed Stephen your is next with Morgan Grambling Stanley. from question Please question.

Stephen Grambling

Good morning. sailing. to Frank, Harry, I have the in a sneaking contributed Thanks. have and pricing around wishes best booking suspicion congrats retirement. stellar on and role the world new you the coming

be changes Following we up than net mean, any this to there is cost I immersive ramifications the changes should that through? thinking we shift occupancy? longer, any net on other financial strategic of itineraries, the Thanks. cruise, more about other or be should yield thinking shift

Harry Sommer

want saw he just in pay, so cruises on to number cruise you to when comment Frank earlier. he retirement, be I goes won't that doesn't world that activity

Mark over to it ramifications. turn I'll So, talk about to financial

Mark Kempa

Hi, Steve.

a of benefits. is financial as getting Obviously, impact going we're whole that factor, to guest, longer-premium the a is number rephrase and to higher get to itinerary actually assets. our there value reason pricing of the one, slight would maximize I better while each load out more destinations intensive to So, get we're that to

wouldn't economics the obviously coin, much we both impact a on to company overall, that. caught the the get not -- of going or on occupancy. But so those always the too be there's favors doing up while sides itineraries to I So would slight

Stephen Grambling

bit, locked gears seen as helpful. That's it. spend remind credit financed you is the a you we export in given crunch? rates new have any just much of can broader little about and how already rates? us Got then And And of credit to think your impact changing ship

Mark Kempa

build That I'll do remind new So, that committed just newbuild all orders, is our financing. we any in without a our everybody execute orders no-no organization. of not complete

X.X%. schedule for very financing our average XXXX an newbuilds at fixed the X% on efficient no are rate those of through agencies for of anywhere to to is rate opportunity export from have There delivery all we to that So, credit change rates.

I As fixed. are said those

going see forward, very that. an because not So we to institutions around and efficient no opportunity there's simply I the do have risk just financing for that

Stephen Grambling

That's great. Thank you so much.

Operator

Thank you.

with Our with next Robin question Please UBS. is question. proceed from Farley your

Robin Farley

historic had talking about Harry levels. about you're talked the of a today to occupancy you could If changes. period of itineraries And both moment occupancy and with you in circle Great. Thanks. And are for it returning being A to shoulder the expanded. ago I some back we congratulations quarter just QX. Frank to the question. a to

we with the was or be I decision to happy change coming and pricing we're itineraries occupancy And reported. makes those," more we're change about going price hold in thought, last since themselves to so, to so -- since was the reported sort but it may because exactly getting it didn't that the "Hey, you just sense for just think think what of to we're a trying not say, --

was if that approach had of yield management in it was changed. the kind it wondering just what So --

€XXX €X.X spread for XXXX out. other specifically the in is ECA just question are billion on that additional €X.X a additional that ships million, or billion that years? of I know for my the then are couple is those over is Is financing, different the out And years

Harry Sommer

this take full let Listen, Robin, focus close to having cabins XXX% I'll Harry. future quarters, Mark I'll palpable. So, in the QX all -- is as now financing. is in ECA our first half, discuss in and our the as

occupancy is our get fleet So, passenger at or I across can of definitively say of, talked and the actually and guests that third entire Mark a just to margin in going be what to QX, discussed, be will load before, as board. time, QX EBITDA we the function cabin believe, occupancy on ahead as fourth load accretive. this But over we we less having

So, we're very happy with strategy. that

Mark Kempa

didn't on expected we especially just course Robin, said We And them meetings the add when quarter rate. last the to that, and points, said communicate overall to did we say that investor try be same. to many to couple they we Yes. over the occupancies, historical we were of of to be exactly run year that a going within

So, not that's from I that just want to necessarily point out a quarter. change last

last financing. remarks, thought financing beneficial I In things, in terms by now that the our was as for for that And and increased supply included of billion. efficient said the we release, had it very as ship of billion. so there delivery. financing prepared and contractual very is related are commitments called had €X.X €X.X certain other is my we out obtained export we credit earnings that, process yes, And in items differential part required simply And our owner financing, the extremely we've the agency

So, and decided simply preserve term in at given for very we to very -- to the more. long order the cash efficient rates, finance

And is ship our three existing overall next out that of different at already simply overall the commitments it's in the increase were actually our why billion for some mechanism a expected. in €X.X further when cash of for think a represent not decreased terms years, I the on of that's does system. newbuilds So cost, financing you costs the capital look it

Robin Farley

later a €XXX definitely and applies between just wondering that willing is them? million the billion I deliveries fact know finance over terms additional of that I that is that €XXX deliveries -- spread was a favorable XXXX or for €X.X or to, that for million to out they're the the it number the positive. absolutely it's was if

Mark Kempa

spread newbuilds, and the ratably, excluding but five of, Vista, next relatively I It's spread the which it's to out to we across remaining took ratably course. of -- Viva all really over three out delivery the of course just say Norwegian don't of want

Robin Farley

Okay, great. Thank you.

Frank Del Rio

we more time question. for have think I Paul, one

Operator

Thank you.

Scholes next Securities. with is Please Patrick Our your question from Truist with proceed question.

Patrick Scholes

seat, for Thank say. amend amazing we flow maturity, loans. to absolutely I billion have Thank to intention the year be And the to that Harry, pushed And Great. regarding ECA welcome my going they are existing questions time extended. And secondly, the hot correct? congratulations My pay $X.X if spoke for off this as cash last well, the debt Frank, was the The Is an notes either career. Mark. from intention? you. the to on or operations use and that you. then ECA it's did get still correctly out -- loan, I the

Mark Kempa

Yes. morning. Good Hi, Patrick.

definitely our cash we are -- we this from flow. existing funding planning maturities year are and hand of organic debt all cash So, on

you're So, on spot there.

revolver -- are or more do And most not obviously, extend. do But -- most the a environment the doing, looks feasible option amend the refinanced was then, or to this later and we'll January and that economically the there. And whether that out we $X.X billion on addressing approach term loan another of we address markets Obviously, extended will XXXX, year. we that that at holistic like. we'll what what look the start

the out in year. this marketplace that of part something see latter that's us So the you'll in

Patrick Scholes

you've past you EBITDA given Thank ratios you related hit still longer-term Okay. see to over year, those Thank you. a follow-up just some still you. yourself on -- And debt for track years. the do target question. Mark, various Are targets? to net then

Mark Kempa

all firing Patrick. We're Yes, cylinders. on

our very rate high is a run basis. -- five said handle on As XXXX five turn to leverage target forma internally, a I've with pro

the to and that's talked Now well base of one And on yield of again marching things we're pricing the as come of to Board with leveraging we've task, our management scale. not which the about, of our as going that's cost back course, team that's Directors. growth, and and, as but necessarily easy strong a rightsizing our

what to that. like So, and today. good we're we feeling a deliver guarantee, we're that towards rallying with the looks around. what marching that on but outlook And we are There's hope never is

Patrick Scholes

Thank Great. you. Okay.

Frank Del Rio

asked travel a ladies you're but of everyone on a us, once this a to to have you've Personally, lender couldn't for most challenged or this an and a partner, everyone more in again, analyst, I all, you've industry Well, call. contributed incredible supported gentlemen, fulfilling more thank Whether and better. made here vendor, want you've us that. and career us, successful I

and time, last and for this I ability confidence one their your to in full for thank your take support. Now interest the next management its company team have you onto chapter.

is you Jessica and Mark this day, team stay the you Have any best. Harry, the be great will Thank safe, all again. over. once to Bye-bye. once and and may call available answer have a questions

Operator

This concludes today's call. conference

You now disconnect. may

Norwegian Cruise Line (NCLH) 1 May 232023 Q1 Earnings call transcript