NCLH - Earnings call 4 2023 | Norwegian Cruise Line Holdings Ltd.

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Operator

Good morning, and welcome to the Norwegian Cruise Line Holdings Fourth Quarter and Full Year 2023 Earnings Conference Call. My name is Donna, and I will be your operator. [Operator Instructions].

As a reminder to all participants, this conference call is being recorded.

to conference like host, to now Inman. Sarah would turn over the your I Ms. proceed. please Inman

Sarah Inman

call. Donna, and Officer. you, joining quarter business Norwegian Chief Harry our for morning, Financial CEO and Executive us fourth today of update Vice Sommer, and and President earnings Line Thank XXXX good Kempa, for and Holdings; everyone. Cruise joined by Mark I'm Thank you President

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

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

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

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

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

that, like Sommer. -- to turn call Harry? the With I'd Harry call over to

Harry Sommer

fourth everyone our everyone. all joining for to I earnings you to good Thank thank you, Sarah, welcome morning, and Well, us today. call. want quarter

robust and ever repeat And cruise innovation vacations rates. board guest available to It's The for award-winning all certainly is our the and satisfaction performance continued industry exceptional as X brands. financial such cruise with wonderful a great scores across the as new seen products to outstanding time on in have guest be demand leading it. we is of

call, XXXX and on I'll XXXX. our trends Today, it's the in key to XXXX. over Mark, Later outlook and turn provide our for discuss priorities, more progress pleasure some performance to booking our guidance near-term on in who our will our for XXXX, of milestones my it recent color

described demand from on to best Holdings. operate incredibly is and be on rebound consumer ships impact It experiences of can of Pacific in But of We were full and in to last guests. the region to and profitability. the see full year Asia QX. Slide can our lifetime to was ports quick and be full last rewarding year able the the we XXXX reopening the for deliver as Now Cruise a ships COVID so a heels as started pleased to Line return cruise Norwegian our the you year crew and the throughout vacation for X, staff happy full to of landmark

recently, we have made was further into fleet, the itself would each and going in This that a brands. one spectacular world-class While ships of introduction by of of were our XXXX, X for award-winning our our in X for the new an Regent in Cruises Seas history Oceania unprecedented most August, achievement May, company. Vista Norwegian of We in highly XX-year Grandeur a and the first in November. and Viva welcomed anticipated Seven

guest members passion successful for possible to to new for been work of an these in have experience, be hard ships would and of vessels Thanks reception the across and unwavering board. crew dedication and year The continues their the launch X positive without not team commitment the overwhelmingly X providing the across unmatched globe.

levels XXXX levels. all to continue record XX% strong experience reception, our combined increase at has us This we demand in versus in environment, across enabled of brands, an pricing the to successfully X with XXXX absorb capacity

an incredible ticket driven allowing to advanced sales year us billion to XX%, compared with As up finish day revenue the XX% a up passenger XXXX. year-end result, have per we of cruise $X.X

At is enhanced growth which is XXXX. by board fresh cruise XX% onboard the continue revenue, come so per A day, over revenue same presold onboard we a onboard guests passenger shown improvement this maximize up through large as on our to generation, wallet. main with revenue time, driver of

of none this new But news. is

As we have been yields. to the and industry leader net in continue be

the We I equally our are we yields proud work want passionate the day out and also do business. that about of But industry. the the day are side drive emphasize in teams highest cost in to the to of today,

on day XXXX on adjusted -- year focus relentless sequential X adjusted optimization the cost has to by of the fuel produced new reduction food achieved prior lower capacity across cost year-over-year and investments and quarters than year. coming optimizing Our full this in all of We marketing. and business, with consumables from cruise per efforts XX% year-over-year net spend of focusing our areas

We considerations are cost better analytics and committed optimize margins balancing our through accountability. to to and data continuing by revenue products, drive decision-making to leveraging and

results. cost driving to metrics to us and revenue healthy get these of result allowed net The back

As EBITDA cash we billion $X.X XXXX, our free nearly sheet the to strengthen generate with adjusted of repayment billion to generated $X the adjusted allowing debt. balance in us further in flow in

are On by the profitably guest experience we product to decisions strategically identifying guest maximize investments and satisfaction. enhancing the smart front, ROI-driven

Starlink since to our of Our technology XXXX across and able fleet of been expect spring year-end fleet finish success have out the recent Internet. has cutting-edge year. and roll the this to the by We high-speed been quickly this full of half rollout moved

brands. to our the ships, the guest all we've better experience In digital and improving aboard guest experience focusing been of across pre-cruise elevating on tools leveraging addition, significantly X our

allowing while and sharing to destinations spread they functionality and enjoy to multiple days our air book homes, their and we've air true have over beginning more to flexible their to allow cruise the and day to leave Oceania, example, save for guests. they end demand window win-win which at with innovation a we of Norwegian time, in they innovation Norwegian before rolled deviate and us air gives after few program us, an can the out For at at This at improvements pre-cruise explore their the before same costs, a even the to time more guests our us guests year. sail and planning so began making at been earlier

after are more the also but Seven side, app, in we record reached These not app and resonating guest Seas Grandeur, giving recently onboard launched strong generating digital cruise, On during guests, which mobile the to on are of them positive and their better Regent returns. improvements NCL usage experience January. mobile with our only frictionless and see before, continue we adoption the high a

on These have the in reduce incredible the a capacity for by levels. the future to a by intensity solid our millions experiences on announced growth XXXX cylinders. us laid and XXXX day results is financial we operational strong XXXX position truly and XX% versus guests greenhouse gas foundation profitable by with XXXX sustained Finally, important who basis a vacation announcing company sustainability to us year. and interim commitments, by all firing The target sail of deliver and to XX% every

to these optimizing growth our a and addition capacity financial to strategy delivering strong fleet is measured long-term In of our cornerstone results. drive priorities, key

XXXX a expect outsized this revenue no represents XXXX led ships, deliver be over line bottom new period. CAGR pipeline and capacity can growth EBITDA we to with Historically, the different Slide top Our growth. growth and growth a see which X to you capacity XX% capacity of X% X, growth and to of on and build from has meaningful

providing sheet additions We significantly while believe will further strengthen that to these balance to capacity and continue our our innovative us and enhance guests measured enable experiences. long-term profitability new

Slide environment our discussion Shifting X. to on current the shown booking

and experience position to strong XXXX and high demand across by season some into to brands. Cyber the with X momentum booking demand. The led successful of continued history, began with buoyed best an Black wave pricing XXXX strong all saw Monday company strong promotions. the in which book continue of resilient weeks We our customer has and in This Friday all-time we has

brands continue general, across see markets, demand products. In to and we all healthy

Let recent you walk trends. some through me

shoulder Epic in Orleans, full is offering med Getaway close-in redeployment from prompting season for sailing October. Norwegian voyages XXXX beginning demand strong First, Caribbean of Norwegian New and the Canaveral Caribbean from in and particularly Port offering respectively, sailings the to

the increase approximately prior versus basis Caribbean brand by XXX points XXXX our result, for the to NCL a As is year. expected in capacity

in These changes Our preferences. our demand our redeploy responsiveness demonstrate lies ability to and industry's advantage in our our and consumer ships guests' team's to adapt changes to preferences.

sailings We have for seen return in also Hawaii. demand

While only accounting in this for approximately sailings these are X% exceptionally capacity in performing XXXX. of well period,

demand continues for year last of brand pricing Line exceptionally position Cruise X higher are Norwegian to see and our XXXX. and quarters strong our book all than Next,

to Middle of cancellations strong demand across all East continued Red with Sea. and also voyages see Regent redeployed the the in due Oceania, to exception geographies

we XXXX. the Sea our made we quarter, to Last East. rerouting have announced to Middle of the year. all Red in the preemptive the the recently, calls through Israel sailing cancel to Turning of the rest decision And for cruises

As region. East 'XX, just our in X% to broader full Middle was and a reminder, year capacity respectively, X% and in QX dip of the expected

for Middle represents percentage Oceania the East respectively. of However, brands and up and making a larger our capacity our Regent XX% X%,

been XXXX We replacement calls cruises sale. put being the in and the region now all or in on in of have process have no are

pricing. XXXX, encouraged highs by are at we for higher remains book position commensurate strength which our in all-time Overall, the with

year. to result, a up be As solid XXXX is a shaping

this year year primarily We bright revenue healthy a healthy to net across expect and growth a on be occupancy constant by that with indicator encouraging consumer X.X% continues currency pricing board, strength of seen improved the remains resilient. driven approximately an and target our full strength. Onboard basis, yield spot

see results We to overall pre-cruise in are journey. throughout which guest spend for continuing a cruise higher typically strong purchases demand

This to Rather, And our have at during way a our are long-term shift company for more but we enhance create is to X-year our as that delivering experiences to value. to possible strong operating about XXXX, that our cost costs in efficiently we while was it want reduce to cost be ensure guests exercise focus company-wide operating the not truly should focus just for allow success. will while which team. continue leverage not our even us this entire importantly, talked a we cultural profitability, only emphasize as foundational looks

we expect to changes each holding our initiatives. guidance XXXX. area transformation Our track our versus to core us in is XXXX these be apparent where and is for accountable flat allowing this We cost believe recently in monitor office their established

conclusion, strong adjusted last on XXXX combined to In enhancements expected line continued margin and over cost our to and by EPS respectively, top year. growth, XX% are focus EBITDA XX%, adjusted and drive our with grow

the and all you with mid-May. then. in We are with very about we excited our discuss to We the plan multiyear meeting forward to community investment future, targets look

I'll you through Mark? turn With financial that, Mark it and walk to results to over our outlook.

Mark Kempa

per on focus position. financial will fourth today commentary My and currency XXXX guidance, excluding quarter XXXX are diem, metrics same day XXXX and everyone. morning, net a capacity and our period XXXX noted, our XXXX, Unless financial XXXX good comparisons my and Harry, cost, otherwise net fuel are you, yield basis net Thank and results, adjusted on on commentary in to per constant the respectively. cruise and

Let's increasing yield approximately XX.X% on fourth results XX. begin with our line, which quarter X.X%. net were are strong and top net Slide approximately highlighted diems results, the increasing with with Starting per

exit as discussed factors saw, sailings. demand as close-in exceptionally the to favorable well we XXXX strong rapid including Cuba strong Caribbean quarter, last in very of comp As the Several growth for contributed from a the

$XXX in Adjusted fourth this quarter improvement Looking at marking net cruise line on per at day was important excluding with the our guidance consecutive costs. fuel capacity of metric. in costs quarter

this quarter. certain net nonrecurring expected, benefits the in approximately of As $X included realized

during significant our base cost margin initiatives, have our demonstrating this progress and We XXXX to XXXX, focus made commitment focus beyond. our in expect and to enhancement and continue streamlining

to approximately was below while loss EPS the slightly line. $XXX FX $X.XX of a line below EBITDA with due impact negative in from a adjusted Adjusted was $X.XX guidance, million, guidance

short the reducing with of Overall, we $X.X on $X.XX. costs, generate of Strong combined fourth us billion were EBITDA quarter continued adjusted EPS and pleased line generated the full adjusted enabled very year we and results top growth with just to progress year. in full

free drove of strong flow adjusted cash billion. All of which $X.X

I am XXXX in that confident the improved foundation has beyond. set for our a XXXX and performance financial solid

for expectations to on Moving 'XX.

outlook quarter full for can first be the Slide on year and Our XX. found

with is $X.X XXX be expected full to year, versus EBITDA billion, points. improve with to the XXXX an margins by expected improvement Starting approximately XX% adjusted EBITDA almost basis adjusted

expected income approximately million net Adjusted approximately $XXX EPS increase is to be versus at $X.XX, adjusted expected a XX% XXXX. with

mind important keep Before for your in top a I line there to models. get into expectations, are couple our of points

for the our to growth included XXXX. strong in and share net shares notes First, dilutive for expected count year, exchangeable expected related given are our income are to our be

XXXX exchangeable notes As XXXX a settled or election. while in be notes settle in and XXXX at due we cash reminder, exchangeable shares sole in our can both must our due of the shares

accounting consider were we the However, they in as all requires if treatment notes shares. settled

year As a average XXX approximately million. full our XXXX assume we share result, to count be

Secondly, we have already corporate we tax do the enacted as our impact and planning. income of tax a significant to residency XXXX, successfully legislation recently U.K. this our tax overall XX, Bermuda December migrated as our from to not expect on was rate assumed in Bermuda

East and Red look Oceania brands expected the increase components is occupancy of and from a outsized the Taking approximately Regent quarter. Middle on X.X% Net the at in of headwinds expected yield fourth of inclusive and is outlook, primarily our closer XXX%. Sea second be the the the to impact to approximately

our be non-optimized factors quarter first as highest first lapping in will lower quarter mix the a purposes, in and we modeling growth yield the are year of itinerary For XXXX. load

addition, our deployment total strong In are in we the XXXX, for the demand first of quarter sailings XX% which in approximately represents Caribbean of quarter. seeing

the to the Sea remainder year, the Red despite yield normalized from more growth and return the is levels to Middle expected headwinds. East For pressure of aforementioned

in capacity incremental dry year. costs. XXXX, includes approximately fuel This the day versus year days more excluding Moving dock per -- Adjusted increase full a full X.X% expected average but cost XXXX. to of to represents $XXX the cruise which impact net is for

this cost our costs impact, core of To flat next year. are represents in essentially $XXX year-over-year for million of on X% inflation core our perspective, basis. around put a this given effectively that approximately Excluding savings expected rate

ships year-over-year in the basis the both For in are cost a opportunity adjusted mind days expect dry unit of we took normal XXX includes keep and docks modeling the were out basis. of we impact roughly service, impact while XXX dry approximately year. a year to or dry dock had of $X This returning dry as costs they cruise XXXX than the schedule purposes, more that normalized approximately this capacity related basis less dry dock to This and a fuel on will dock by days. a reduction ex on cost points docks

impact dry ex to $XXX full Note expect year we our to more adjusted on costs. year cruise This with the timing fuel approximately the this occurring a reduce and weighted dock would flat of the period. first in year, be is that, to of days half margins be be impact net basis. that cost that expected will the continue approximately X/X Excluding enhance of relentless we essentially our in to year-over-year efforts of

are business. and We are no continually stone big leaving identifying the unturned opportunities across small and

of Our and across related the cash speed acceleration transformation and full improvement generation. identifying enhance platform margin our in inefficiencies in office is order for running opportunities operating -- all ahead of our operating and areas to operating recovery

fostering likes per at partnerships DNV our fuel decarbonization hard both with ABB and costs our been drive bunkering of work items, Fuel capacity new One term largest focus for optimizing the and has opportunities area on leader and line at agreements consumption consumption long our of our are us to strategies. to one have industry fuel day. teams lower expense been key with

a we big allows bunkering equation cases in fuel during in leverage to have during the optimization even and we of leap us of across single and our the ports side suppliers various consumption the that many season price to addition In voyage. made the maximize a a use strategy

sharing savings many that double-digit examples our relentless tangible improve is impacting our Investor just to first this one guest in look alone. and millions more drive all the the year I believe support May. unit to Day our upcoming at scale experience. drive examples of our This We leverage costs in will the without in many forward

for expected up the year line to adjusted the EBITDA of by The basis top full combination and strong structure efficient our of our growth is expected XXX approximately year cost expansion points. more margins drive

quarter. Now look for expectations at take first a the our let's

yield be first cruise quarter XX.X%. the strong and in expected increase last cost earlier, net is capacity As is per expected is $XXX or approximately I net approximately ex the Adjusted to versus same X% to fuel said day year. quarter

dock which expect increase a quarter, the impact we mentioned, cruise As will on an QX. in a in days in $X adjusted or dry basis net point have XXX cost

ability $XXX, that basis, adjusted of the essentially year-over-year a cruise flat impact demonstrating Excluding costs offset net inflation savings. would our our be with impact, cost to on

first million is net is adjusted result, to quarter Adjusted to $XX be a $X.XX. income approximately As expected adjusted expected million. for is to $XXX expected EPS approximately be be the EBITDA and approximately

the the month of our the revenue is from inventory significant expect not essentially top vast already sold. in line March. upside the quarter generating is Given result of Any complete, outperformance as do limited onboard expectations during majority performance versus we would our

close our another leverage of this refinancing be highest to is our forward will from early while also unsecured a $XXX interest improving we backstop including billion the a our to collateral, on recently, refinancing Slide secured notes And step billion in reduce sheet the almost of of And March in operating in we $XXX which connection of $X basis. return of we improve $X.X XX. net In facility. secured Moving releasing This million sheet. expected expense, generated our to activities, Most maturity debt cash is paydown on to an rate of $XXX commitment important debt, million revolving balance in profile XXXX, our full debt all repaid. $XXX which and successfully repaid with interest due XXXX, refinancing, balance expected cash loan related from X.XX collateral. million million included negotiated

XX. of sheet. Moving record a track the to over XXXX, we to on The turns. solid delevered X delevering has company From Slide successfully leverage XXXX balance by

We strengthen will ways sheet. to be balance continue our further look for opportunistic and to

confident excluding delivered year-end X.XXx make approximately year. meaningful leverage or ships approximately in We 'XX, forward. on X.Xx of we can when progress are half front this second the with of reported impact At going the the net of

We in scheduled amortization by significant to this metric our cash time, expect payments. generation over continue and organic improvement driven debt

leverage of the with to improvements our Over almost in course expect turns sequential we quarter. each reported X.X reduce XXXX, by

aforementioned million prepayment improvement $XXX takeout This the our expected any assume from apart March. in of of does not debt, early notes

are leverage and accelerate to drive forward, balance our to a of to derisk further in With closing the Going value. refining it multiyear I'll for reduction shareholder back plan Harry we remarks. sheet order turn that,

Harry Sommer

Well, thank you, Truly Mark. encouraging results.

entire Moving our focused team will work. important most be on the forward,

will on target priorities the upscale cruising to we our our from from First, capitalize near-term demand on continue execute and strong demographic.

will enhancement ongoing efforts build made progress we've costs. our improvements already with upon we further the with margin in Second,

time. And our to am strong across exceptional I brands, ahead. growth and shareholder more couldn't year execute our deliver capitalize balance on finally, closing, In financial and and the we experiences X have continue operational all over that reduce on our of XXXX and will value. confident I improve to leverage demand vacation our the be for excited deliver environment and ultimately the profitable in place resources guests right sheet about goals long-term we for

happy results company, targets Day this it to share questions. including forward the for of our of that, the turn of operator coming our assessment strategic future at our business to long-term and financial over you May. the I'm defining the With Investor our for look I vision to

Operator

Brandt [Operator Barclays. is from of coming Instructions] Our first question Montour

Brandt Montour

there longer-term But of more a of implied year and sort yield in of it's So your back XQ in on guidance through net to XQ the a the line or is pretty the your XQ yield. XQ. XQ decel out with that looking guidance, algo big not full -- sort conservative growth at obviously net

of be So those the Mark, East that give core from of back growing I you the how the us those of guess for sort in and Harry the business sort question Middle repositioning ships and disruptions, quantify is, willing the of of the willing outside of sort you or see what year? one, half would a sense to, the to disruption

Harry Sommer

Yes. Thank that. Brandt, for you, again,

have are capacity to to mid-single-digit low EBITDA think should thought look where strengthen our to we yield to with all of balance continue do I growth, controls, performances, line course, our allow So you QX growth, pattern. measured express outsized the have which leading strong right us QX sheet. in cost and to to long-term margin goals

Regent I the in NCL. impact think situation Suez brand, had Oceania, you that right the Canal on are Sea, some Red on not our

NCL X% the quarters, all expect and is in in since was extraordinarily X XX% guidance X that X that's to strong perspective, Regent year. and the would have patterns respective the as on see points it an booking capacities, to of taken X Oceania their the for that we we quarters of now. But means, in back the yield into impact of about What we provided. all consideration

that we we So in -- items. have should less those we what XXXX when those by tailwind is stand our numbers. means And when a modest

Brandt Montour

have out great. disruption Europe That's core taking a direct helpful. core -- we just specific of to be it we of That's segment? taking an Middle that -- patterns then XQ? about for super been the about. seeing that a cadence think in Europe. about Americans Europe account And Norwegian-branded the sailings, some the that disruption sailings, talk about That's people the when us traveling And evolution area you're should thinking that the as bit follow-up, more Maybe bookings and little East concerned into of

Harry Sommer

about that last a of our last some challenges bit And coming of in some we little my impacted I'm had booking results in or I require COVID gave QX -- of our QX think the of earnings calls. or year sorry, longer with some QX a when We that apologies, year, results slightly of like QX last out had Europe. the we itineraries of period talked our year

Europe, we've We primarily XXXX learned season. curve our booking the absolutely and for that, extended Americans for into from going

the previously East that the exception Regent been Israel of and brand. what with across X brands, we're cruises happy very Oceania, had going on with Middle we're those the seeing So to all

Operator

Didora Thank of coming Andrew you. of from is question America. Bank The next

Andrew Didora

the of 'XX Mark I maybe obviously, your year, spoke just I just changed how Harry, the half curious the into kind and about And years. guess, visibility over full the when booking point? think should here. booked at do think think first being I where how where XQ, curve for has of this on terms stand based booked being And for of you your full fully 'XX we stand XQ about about capacity. Kind in you budgeted of year

Harry Sommer

for you, give thank We because February, guidance we're February on our say specific question. on sitting did don't position Mark -- February Well, book Andrew, QX we that for booked each for Yes, quarter. entirely late here are XX.

other we're going the referred bookings not Cruises, I be in East for to positions quarters on get of NCL quarters, which brand. continue Sea those for we meaningful So to But high booked before, especially to the where Red exception across X with as booked we're record referring to QX. and and X any more positions the the Middle all-time

Andrew Didora

XXXX it's also I possible this on sheet. of proactively curious costly just just can down? Mark, And maturity. is all the you prepay Obviously, Okay. balance the if know debt point? too I thought not pay deferred in your assumptions, the at but or amortizations, do I just kind it before of it's to couldn't guess addressing you're expense you

Mark Kempa

have debt not Technically, our you're the of technically prepay deferred to have until all we we do amortization cut capability Andrew, up. right.

refinancing the that take deemed of we ability is do have as a debt. it such, portion this out with particular and the However, to transaction,

million, course be 'XX, are obviously, that before forward look we between but do have the will the now the of to are of notes notes very $XXX address we end over of of sometime As effective, the X.XXX% cost those the December and remainder we well looking in maturing year. some year which

address And then early may we leverage. and to to point is be of address I or actively may be sheet or take in that the out. too terms thinking what balance not But to a giving of little think the guidance here that, bit starting are really about we now outside the made for us

and start that And XXXX, we've of to for coming each of little always a chip gate been will be this year, able happy we've the said a away out bit we're that.

we're solid definitely to very a -- our path journey. that. excited It's about So in

Operator

The question Steve Wieczynski coming is Stifel. of next from

Steven Wieczynski

of pretty mean, the It's through costs about how XXXX. then or I guys first think off, do or on in the and in be year that So to I we lack Harry out keep assume cost And past been growth to we this you impressive. move for we growth Mark, congratulations I range. those improvement. cost as move cost think as mean, tough going years, about cost flattish would it's

your outlook So would just long-term maybe some color cost around forward helpful. moving be

Harry Sommer

represents that our So thank long-term Investor you, extraordinarily we're comments, $XXX Steve, in his proud on outlook 'XX million we cost so in do that control. give our I versus over financial It's as inflation. -- on mentioned something for in those won't. -- prepared in May. the we're guidance kind and Day improvement we and not here specific words We'll of, yet 'XX, to give Mark metric core Listen,

we able certainly less a inspire But to inflation to than I will grow say that this goal that basis. being something on the is long-term rate do of cost of at

what for, know of you indication gives our not I looking some exactly So you're that's hopefully direction. but

Mark Kempa

And Steve, is to this. further I Harry laser-focused it We've saying just to on highlight what very clear. is want been make

become bunkering imagine office, strategies. improve something of We've a established improvement We said up importantly, a This improve a continuous will different all and efficient and office. some time our how actually -- about like can we're we've which what more I is leverage setting performance get But things transformation our dashboards. talked I onetime not ways we scale. again, more are is this exercise. and looking at to

improve just the upstream area you waste our our structure, waste side experience. monitoring side all strategy, a There's you talked a it, of without benefits where I lot underlying about the is that overall of ways it. I fuel, cost waste the has talked can really food the significant start big fundamental Food impacting we waste. guest about of bunkering when when think about

We've sharing details message. our taking again, focused been that certainly So in multiyear forward Investor we we're there's benefits We the believe And look we but around to got serious. Day. more on this. here, this May

Steven Wieczynski

and then Okay. higher of And that Got pricing X release question, Norwegian in are brand you. this bookings the you quarters year. second mentioned for for all the

any little in you price what kind Just second be terms a maybe there would XXXX. what's a can you're luxury seeing year being of by of what are can helpful more you color then wondering action going as more And take bit obviously well. which this if also of around impacted bit the somewhat color Med, half on color the about but of into for little brands, give in

Harry Sommer

Yes.

NCL the is price And or highest demand is today, price management in we sort promotional brand, take the an revenue see company, very have generate systems. action on yields for way listen, and of take robust opaque doing we that. when we're it action, we which to and order So sophisticated the action as to

our strong I in QX changed When QX the and good, reflected take especially our gains philosophy has gains So for it's of oversized nothing core it. advantage on for perspective. our in QX, And NCL we brand. from reasonably that demand think is to

see have at wrong at We luxury does or grow very to clear, on X you XX want model days to the small XX X regularly when service on I of high. outsized fleet the those an In being for X out Oceania, there's impact have a yield brands. demand space. ability of take Regent, brands, out it something for with be But fundamentally the to luxury ships

lower than All hope starting albeit voyages but we Regent, it in already to them the well because and to limited filling gotten, with be on to at just closer that new We onetime new the have it's deployment for normally areas. thing. those would pricing fill, we're a Oceania, sale

the happy world. and with the very are Oceania in other We the performance regions on Regent, of

Mark Kempa

And Steve, in not brand, onboard our terms around revenue systems, our models management of let's the forget apart not from revenue. Norwegian sophisticated

continuous that. more over our we revenue terms a time getting And enters our customer in are share point mode of ecosystem. of in of We from expanding continue to presale a and a the longer wallet of refine onboard the improvement period

part key a opportunity. that. And look We as as plays at revenue going our we at continue forward we -- to that look

are that's very very, on. we focused So something

Operator

from coming The of Wells Politzer is next question Fargo. Daniel

Daniel Politzer

dive I'm comments in to about sure thinking this deeper, terms you're wanted how make bit the little of growth year. your just yield just I a understanding for

second the largest sounds the like quarter. quarter fourth in Middle impact East, the the is and So it

So the of fair same to quarter, quarter first third assume then of is the growth, in in about terms it XQ XQ, the third quarter to least? yield greatest and terms

Harry Sommer

as on in when look of our it's more the O&R impacting certainly, Dan, the second the quarter, us and results. definitely Middle Yes, impact the you in fourth mentioned East brands, at

lumpiness our and So I each significant any puts the you're quarters, consistent quarters. prepared some the look as takes normalized growth. There's X but said you yield X expect wouldn't we remarks, think to within I more speak, as remaining to necessarily, in always across so a see of quarter, going across

Daniel Politzer

mentioned been guys were of that kind to Got quarter going I Harry, fourth adamant outlook getting I that also maybe it. year. follow-up, pretty headwind. is or question. you the as conservative But was think my maybe think, points And algo, quarter more about you then to a normal this to Brandt's guide and of X to think second add-on an fairly just for a X back But a we you've geopolitical for

to So you're impact through quarter I and degree baking mix we as the that, from any conservatism in think what shifts? guess itinerary XQ fourth about outlook, like

Harry Sommer

into think you of level giving I our you guidance. are we if wouldn't told conservatism be I guidance, what we baking new

that we say the that are confident to providing numbers we're suffice listen, So in.

have, into incredible course, future book We visibility of positions.

So confident upside that to our to the business we've abilities, we're best and numbers but there's that providing huge our provided. to you we the no I'm hit. certainly there, going numbers We're wouldn't expect of that upside I saying are can manage not we

Operator

The Hardiman next question is from coming of James Citi..

James Hardiman

for Thanks my taking call.

belabor sort rest I the I So want what right, being but XQ detail But year catch is rest some this and point, about, XXX to the I point Obviously, this between is think to the of dichotomy the on from get basis of maybe that front. year. the yield XQ don't XXX occupancy, just to the to that just of up. of if

quarter from is rest Europe out robust to we're XX%. America year? got while to XX% seeing the quantify to a just what pricing get much North and lot is stems just I to from of How how we guess from I as shows mix, down than way much any that the there X% is and Europe. way XX% there explained past the Obviously, right? decel mean slide you're into Europe of the sort of going more how be pricing and of that can Caribbean that? the Is And XX%, by Caribbean think about coming in first you've a seeing like-for-like

Harry Sommer

X I James, Listen, deployment in ships a our the of out of couple that from in XXXX always. the QX. issue the that with I as early the NCL don't or of XXXX of a different much not early exception is appreciate month our moved really perspective there's deployment think in much than that Europe we mix big here question

fact time Asia, visited when to sell, which difficult was and have Both I primary which particularly alive So was wouldn't issues brands and was very that QX make There well. X make that was early 'XX of the especially our disruptions, there still with curves. past given decisions think had happy Regent those were Australia. on those booking commitment they COVID, weak, to crews, the 'XX I coming world the say gets COVID to that Oceania necessarily to right? to would I'm have discussed, QX-ish, short there's brand that out itineraries articulate, and in we've of

weak coming QX. off reasonably a comp we're So in

'XX is to That being very, growth it back get year-over-year. with we where a of QX very that said, were XX% we're to happy able still

the not QX. not year. So some in obviously, just there's spend this weakness of last of year, It's

X across because I we're the Red when before. which quarters, the talked look the Suez, issue and we only across I simply the brands, want with it's that Sea the to I it the think seeing issue elaborate this to areas, geographic other across quarters,

do product position We over summer. our but the ships our higher We and Alaska set go Caribbean. we of capacity, guest we Caribbean the Bermuda there. right have have and we to Caribbean, of out why We X% Europe a for out is believe which don't seen the mix returns the than of do have we in ships

end in I result the So remarks, would I have it's what yields have could prepared said my competitive growth net more, repeat the within set. we possible Caribbean in highest been the that still less. the been but have the

grown more it Caribbean. lower of number resulted in the our if on So we would maybe a have a like-for-like basis, in would have positioned capacity overall we more but

Mark Kempa

in then And you we're mind, because think growth an But when about QX in over look of to XXXX, Obviously, you forward keep just yield aforementioned lapping of versus roll X% outsized we you at algo QX benefit and factors. the James, where getting 'XX the roughly that going year. of this in quarter the fourth growth, XXXX, X.X%, be of had we're QX that

Sea geographical of apart So area. on. there think lapping areas, little in from underlying pricing geopolitical and and the is a is sorry, all as the Middle But Harry all said, issues Red bit business sectors across good going areas, in all strength Sea I the looking the I'm

James Hardiman

that And follow-up it. Got just maybe there geographical point. to a

the pricing Middle we call for XQ, Caribbean, in occupancy is right, and the about growth of should guess about I but probably if growth it, thinking East there maybe we're for be ex Europe I thinking is ex if pricing, think impact, year, call yield pricing meaningful that's maybe not. about versus the thought just the growth So piece a just difference Sea we terms it, how there the for X.X, Red --

Harry Sommer

I there's meaningful between don't James. the any difference think markets,

other I we're for seeing think those again, pricing we're markets strong and -- markets. all

have sort net in differences operation. between significant depending per markets. of we're total the in area growth, any on terms obviously, of a you diem So of difference But not seeing

James Hardiman

good Very helpful. it. Got luck. and

Operator

question from next The of Cleveland Research. is Ciepiel Vince you. Thank coming

Vince Ciepiel

dig the I And points help of where into helpful, the a a pieces. were close bit little about those to walk you improvement think, of but could to you maybe X.X mid-XXs, your that handful on, some still of moving you wanted gets through points I margin to color behind pre-COVID. back there's

probably is pass-through. it's headwind a I a more as more selling think just air of

us kind headwind. think is probably a a help get time? understand close so path differential and over margin times and I just But confidence to getting pre-COVID XX% that your something to bridge of of point near on back the fuel or versus

Mark Kempa

Vince. Yes. Thanks,

we our I and cost one. I to to unit that Investor it our base going at have don't key That's details to too think But look, bottom that But our scale. is improve many May continue leveraging we're leveraging give pricing. want the comes Day. While number all line because some give our to down to on cost visibility significant and really

last I back months We've first made XX when we say what started in in the XX would of the significant progress, really second addressing this to half XXXX.

look to that. continue to going we're So at

XXXX, XXXX to I we think when a have you at through XXXX think were overall When We improve. from guidance. about X% we about CAGR cost over it, look somewhere

on. improve leveraging of on and incremental that. regulations better there scale. from But fuel think Obviously, that. our drag we can some 'XX job We're 'XX do is given we so So and doing definitely versus a we new have to

able mitigate and dock inflation dry $XXX been expected base, for the flat, look want cost to It's million to in when is small at XXXX. our we've reiterate, cost confidently feat said, over flat I've expected our As no XXXX. days, of capacity we reduced excluding base to I the that be

everybody So It I think at continuous sure end that. everything opportunity to We're we and want doesn't there. looking make there's understands here.

we're that. think over for think expansion a opportunity margin significant growth moderate strong definitely So in there's chip and top going we at or cost combination And time. between, growth away again, to line I improvement,

Harry Sommer

Ultimately, or about to And goal remarks. to overall to NCC that's dry find that ignore. obviously, great that, sustainability expense know dock, is we excluding not And it's extensively in talk consumption. add goals, lot and NCC our want Mark excluding our is for fuel, profitability. fuel for prepared we but great I our talked his it just also to to emphasize metrics, fuel reduce a I ways about something but

spend mean something assure I we I focuses. So I despite that is the like improve course, that are main fuel, on report don't EBITDA about the that from fact are like one million in to monitoring talked Mark on and fuel multi-million $XXX to that don't to reflected bunkering we're dollar want multi-, a want and numbers to numbers. going -- of better metric year things necessarily we everyone And and our those the things real to of that. multi-, do extensively,

Vince Ciepiel

more if one versus ticket And driver? this contributing helpful. growth? to walk And would maybe through Any of then And through additional there XQ gains occupancy if it's onboard for versus kind normalized color how us about be kind maybe envision a XQ. equal, is thinking more that bigger yield you growth one of

Mark Kempa

getting of overall is profile. revenue of yes, points on X, at through I rest generator think quarters X really you pricing. the the our revenue of significant probably, look quarters, back onboard we're Look, the always X is what, and a X.X benefit When Yes. occupancy in coming those about

So on to on improve it and component, board is, always continue an that. it is always important been. has We'll

outsized stepping on share wallet prior of Our any goal, to again, that. to I is our And get customer well revenue -- growth think from necessarily ticket more we to brands. price expecting of X there's going on -- stream that don't versus vessels. we're particular one that the to And that across don't over any I improve core think the foot continue meaningful our but

Harry Sommer

please. question, I Donna, more one time think for we have

Operator

question final Our is Melius Conor Cunningham of Research. coming today from

Conor Cunningham

could in. if I X just Maybe sneak

a it's marketing XXXX. understand there? in trajectory cost down? dry to bit Is kind more. docks the the and the offset but trending that's I Trying little -- on spend Just of the inflation, understand what's happening

improvement, Mark changing. around And the is stick sheet tone as balance well. that maybe secondly to on The definitely with comments the

be Just Xx you're Xx that So did thoughts to to as any this get back going helpful. to pre-COVID? Xx Simple we would there you going maths to Are that's positive. leverage.

Harry Sommer

Yes.

the let obviously I'll side, specifically on find on look commentary will improvements at that. any be very of the But will, about if let marketing because the improvement same in we're balance But Mark cost number way up So the sheet to this our else. And in efficiency, that. I'll in him talk We will and marketing around remain strictly efficiencies everywhere look related finish we volume, marketing. at marketing we the of isn't will efficiencies you same. proud

the not We to marketing it top and with metrics mid-funnel of efficiency, visits, Any both our continue. type We're be we that drive. keep on generation are benefit and demand other lead web in order alive volume and really, happy that on have the volume. But the all carefully very every made well, about will expenses. necessary and and about improvements line I is consumables improvements the we But I cost our everywhere. in table. food is in P&L. costs. air nothing through I mean made way mean mean, waste. could off we've really we we of talked the go we across through track fuel, talked item maintenance, SG&A in will There the We

reduce whole not to important way, you it it as going and that focus marketing think those in about away. to, on order I any really Mark want take in metrics. a demand So we're And to P&L

Mark Kempa

are current And Conor we on we've -- at very over leverage that Look, on year-end. expect that levels we've our it. this time. improve focused will leverage. leverage very significantly excited We're said said we

to that's surely but to going balance back our We that's decrease by X.X pre-COVID slowly least -- restoring And that to sheet again, expect at turns. levels.

This that leverage. quarter that to 'XX. So are after happening the would X% in expect starting improvement of that obviously, year, to happen would improvements And will the something not we're same see I you thing we we're significant certainly and 'XX excited is X% to in focused range not -- see on. over XXXX, sequential course but quarter.

path. right the on we're So

Harry Sommer

back thing add X.X%, that think in the by to we X.X%, in just simple a just it mind. of comment is one. only If number the would range, to X-something math we The to and at reduce Mark's plan be keep were the X-something not range the I I'll your

a May. be you forward I to great the day in We That and you any may answer being wish We questions to seeing thank everyone you to around want We'll look have. all best. for joining all today. said, us

Operator

this gentlemen, and concludes conference. today's Ladies

and the of the rest log off your webcast may You lines disconnect day. and at your this enjoy time,

Norwegian Cruise Line (NCLH) 27 Feb 242023 Q4 Earnings call transcript