CCL - Earnings call 4 2023 | Carnival Corporation & plc

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Beth Roberts

Good morning. This is Beth Roberts, SVP Investor Relations. Welcome to our Fourth Quarter 2023 earnings conference call. I'm joined today by CEO, Josh Weinstein, our Chief Financial Officer, David Bernstein; and our Chair, Micky Arison.

Before we begin, please note that some of our remarks on this call will be forward-looking. you cautionary refer press in will release. I to statement the today's Therefore, ticket diem, constant net adjusted references prices, All to per stated. without will otherwise cruise fuel net be unless in currency costs and yields

References to be net basis. yields on a diems per and will

loss, now ROIC net all adjusted will on per comments of net cruise also basis, without cash an stated. reference which fuel, Our share, unless EBITDA, free costs income, earnings and otherwise flow be

defined in U.S. All earnings are investor and and our these release financial measures our presentation. the be contained comparable can references A presentation and release. directly other also investor where to earnings press Please GAAP our press reconciliation our are non-GAAP found. press measure earnings visit release in in website associated our most disclosures financial corporate

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

Josh Weinstein

say It's deposits. record high another and Beth. closed safe you, levels Thank record ended booking to a on the note record and with year quarter we revenues, customer

In fact, records quarters X all past in year. this we consistently set

also in and with for cost that fuel fourth quarter guidance expectations. with high net exceeded our cruise EBITDA achieved the per the all range end ex income of We line diem September

high holding than eclipsed on inflation trajectory. that a of Fourth currency higher quarter yields to continued strong EBITDA a Significantly deliver and unit XXXX XXXX we anticipated cost positive overcome constant. and years to X higher had very per than even and fuel enabled us

QX just improvements digits closing was We American on of American XXXX. with double improvement second year than increase. all of consistent over the delivered diems levels exceed in quarter. XXX% while X full points both quarters double-digit up stronger absolute more It per reach ticket at European gap drove spending and start board as to double-digit for was An our a with levels encouraged North the prices. half and the of our the to the and occupancy deal the X we acceleration brands XXXX, in historical European year even occupancy of North shy for for brand see across in for fourth brands

fourth delivered the which propelled to adjusted We load and year. also through reduce Strong forecasted, in journey us pushed income the the to more cash positive than from to debt for bottom our quarter operations. post line us $XX the million the necessitated during EBITDA on operations

billion flow, strong over debt of this made have We which And cash well time. billion year we $X contribute and $X improving to will debt of top on of still over further payments alone. liquidity, reduction

upon grade our placed foundation And of delivered happiness all All the path metrics guests to most this this to us built. million SeaChange XXXX. year. leaves achieve back Laying importantly, investment are margins our leverage our XX firmly brands on over of by which

have Turning in to Cyber higher the X for position of the booked start. weeks booking we setting around ever seen best year bookings. XXXX now the the on and and reached We XXXX business price an to nearly at Friday off an books and volumes ended X/X on all-time have prices. amazing both Monday occupancies the and We in considerably for Black high

we business year-over-year price have And even to with capacity double-digit improving of occupancy while during into on maintained on historical is occupancy quarter, significant the XXXX booked point, fourth essentially this the further. the going us, of first essentially higher at quarter, At we gap advantage higher for business the we've behind position built our of much approximately closed prices. already levels the books, half and the XX% with

quarter. at products are during in trends both improving price summer all higher our period, prices fourth occupancy and from major peak better the For booked benefiting

for up strategy, American brands And record last no at out and North book management yield our year. is us higher. ever of pricing sign for of well remains seen we another clearly that set far The business again, year bookings position our Our the considerably slowing. have as baseload seen ahead we as has have

just considerably fourth window record to quarter a Our back European historical booking delivered higher brands and prices at norms. volume fully now with booking

expected, As XXXX are our brands even poised improvement. to to an become contributor operating European our greater

our time, This revenue onboard pull pre strategy, we further sales. At coupled forward for features the for same with guests cruise us more well to our onboard bundling growth enjoy next are onboard and year. to newer through shifts even positions continuing revenue

we effort, well thanks expansive the value our chances levels. to amazing newer crew. land-based have to on levels this in the full to we alternatives. unwarranted while per to of our of with to million on back our alternatives. positioned service results. new-to-cruise the captured many take remain well year's X.X In to amenities over pairs to while capacity that higher still to land-based can aid close delivering for momentum X% guest-pleasing year nicely continue ability pulled on amount we And historical higher guests share service In words, This gap guests, fact our record occupancy We in from expect are alternatives on incredible further we gaining building and return Volatile dam fleet. the that deliver board other to land-based offered exceedingly XXXX,

pause In our passed since X in years fact, the while have almost operations.

respective the fleet ships, in Pursuit, has expedition for class yet This expedition second X a our came Our popular of we P&O out year our series from exceptionally we and vessels are Cruises, alone, efficient our our actually truly Arbian, ship. brands benefited of X as XL scale Carnival past Celebration ships. bar the of Seaborne and X fleet extreme in efforts. for welcome new year younger luxury. and seaborne fog both fantastic Including flagships raised leverage and optimization through their the which cruising

It's it yet of platform Italian-style from ship the doubling XXXX. the into bring we and Carnival fun technically And new, Forenza in leverage its our transfer gangbusters. also example sister Line we Carnival be we'll via while Costa welcome not biggest over going how when scale her and been Carnival Cruise down Venecia has

years. of and capacity the first Princess. of XX% in match new for Looking forward, flagship Carnival of The all will will of for set new year Carnival pride Line as its the icon additions, delivered roughly real has the her innovative no this Queenan, With ship its be of sub-princess for ships. class game Jubilee excitement introduction a changer the she and a level home doubt our and Galveston. XX newly Texas is a these Cruise which with new Cunard in be inaugural And first to

we headway and We projects. be on Cruise in construction Carnival e we We'll And X.X go-live, bring ships from real meaningful fantastic home up still changer made and for on years already other XX closest Carnival destination also this the portfolio departing from the while celebration destination. and asset are strategic Celebration Line. around destination game our a the awareness We to about largest exclusive ramping began X Key. are will which ports excitement

the significant the that the of the Grand will in creation as which partners, in We've World. and the lifting days, our capacity vessels. on started result largest process fuel exclusive and, in we in will shipyard docks, a have of time, the dry travel time, reduce benefit reduce This construction one our X preserve largest future at revenue floating Cay same consumption. of the island our traffic can with Half in work pristine begun at side a Moon the guest also We've berth beautiful pure with significant even Bahamas Bahamas destination accommodate upside our for

definitely As paid you levels and know, in and we've over XX also consideration with been it off awareness elevated last the revenue brand for record our and investing more has results. and advertising months, booking

web visits over In XXXX, up fiscal our XX%. were

and was all multiples many, X% up up XX% roughly many capacity natural growth. our search was almost search paid of our Our XX%,

in In than the more carried fourth of we guests quarter, XXXX. did and new-to-cruise, the quarter new-to-brand more fourth we

our demand continue bookings time, maintain this around to optimizing will unit on in at XXXX us level each a we similar brand. outside Given well compared help current on basis XXXX, to the advertising generating build and plan demand a to point of This of year. success in

We're working momentum our to waves going keep and beyond. aggressively strong through

its we've examples, where launched to and moments, launches in We've new P&O campaign Queen sequel good upping launched of highly highlighting new Christmas Day time with species. will campaign to like campaign life game celebration welcome been early progress. conjunction planned its Cunard differently U.K. campaign commercial America experience marketing is Poland the for time huge Carnival holiday a our our short Costa about yourself kicked list a on before, in its focusing markets, to successful less to never the has which a few across in year, capture launch next introduce and are key your Just recently off campaign, and Queenan space fit in new just holiday core guests new spectacular fanfare. talking AIDA Cruises for made the

Of you'd improve. we're And there not room never course, will done. to as we always expect, is as

and There's on our continue much to trade strong and out generation support as already tools sales to more lead and roll our management in come relationships advancements yield techniques we invest to partners. sales with build

Turning to costs.

to ex dry be David through cost gap walk to and more you indicated, the dock expected inflation closing higher . detail. volume XXXX the fuel impact unit [indiscernible] of previously from are higher we As the than for cruise occupancy will due in

optimization have we're initiatives, we cases, said, leveraging to mitigate been aggressively today cost including that our scale. future through investing some our inflation for With benefits. In working

complete couple Just in than cost both the clear underway, vendor-neutral XXXX with bandwidth our fleet. savings positioned of of capture Starlink pipeline, produce revenues, increased per significantly reduction to quickly This essentially our onboard and to cite a cost with megabit are initiatives in guest we will in examples better platform, we're more across rollout future And new a XX% higher resulting of a the experience win-win. years. in and

spare equipment asset we strategy launched brands what MAS for optimize the transformation to practices, maintenance and system us maintenance our to entire over efficiency maritime centralized developed allow and also optimize strengthen parts fleet time. will MAS. all is of of which We've and all of across our our as and across reduce management leverage a MAS internally all ships. our machinery will effectively the refer unplanned more and to schedules

really begins MAS ramp implementation up $XXX a million in see While as to in ramp from of P&L we XXXX. excess that year in we XXXX, benefits well multiyear up benefit we this the expect won't

All of in costs XXXX. making X-point to revenue efforts improvement and the are lead to to expected margin a we're manage drive

ahead the XX% calling We're highest more a X-year our by guiding our target than XX% ROIC decades, billion targets over financial deliverables. tracking another $X.X birthday change guidance XXXX fee higher halfway X of half in than EBITDA targets. of Thanks the to expected we're already and is plan our be nearly for delivers our of for step these than more for change, EBITDA SeaChange XXXX. XXXX, record second EBITDA hence, which achieve to in and to to up our is point, over XX% expected ALBD starting to toward increase strong

Today's annual P&O Cruises levels increases of point guidance This to increase in the deliver company. Not X-point U.K. single from are also highest target. in our again charge XXXX our to X% ROIC, a a the our leading market, the the hit ROIC leaves brand Carnival, XX% the target. starting XXXX, surprisingly, X.X dedicated in and point with just will and AIDA

GHG It XX% gas this of noting, target to X included already we XXXX XXXX by to targeted. goal echange forward XXXX had in the is expected a in program, pulled regard XXXX with reduction or shy was is years. our from our just greenhouse worth our be And intensity

in been fuel aggressively efficiency, This deep time. it GHG reduce the to have lower has costs at resulted not fuel our commitment and resulted footprint industry-leading in to has only same work and We absolute emissions. continue also environmental

XX% absolute lower despite of emissions XX% growth XXXX are and the since peak Our over capacity then. that's than

capability also exceeded we power year, shore Last goals. our industry-leading

around are of capable many plug and twice have curve ahead world in. now than the of there We are shore power ships the as ports to available

our on poised managing and across a this good achievements they way the shore. of ship business with in and experience value to improvement the books an deliver continue gap, target. good at for nearly considerable to on amazing at us Again, important of Collectively, outperform, these alternatives even I our the operating growing improvements to people, SeaChange all costs. space, higher onboard make change vacation allowing another X/X the step experiences in, of out year We're headwind momentum prices, all and from day commercial to relative while too day land-based greater we revenues credit ongoing

and revenues of All deliver us this well of sets record combined to record another up EBITDA. year

return the allow investment-grade the ROIC. reduce brands allow coupled decades to cash greatest will also portfolio amazing book debt expense keeps and us credit an strength, aggressively few and getting better credit with our order in for and with continue people. just liquidity, down to Our a pellets, and flow of execution time. confident higher over our weeks to rating continued card deleveraging, actively To and path I excess of our manage in fleet unparalleled remain interest reserves in best-in-class better, are assets and that lowest

cruise million year, This been has long the and all and ship leisure XX delivering like guests this short in shore members, extraordinary year an amount vacations. providing way unforgettable truly best a happiness time. team them for travel to by I come incredibly and remarkable we've of in a with over thank our would to of

visit we thank partners as our loyal investors many every guests, integrity the our other partners, well destination we strong and as for stakeholders. honoring agent For you life support the place from we And sail, touch. travel ocean and of

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

David Bernstein

Thank today start Josh. of you, with XXXX I'll year fourth results. and quarter our full summary a

Next, finish XXXX And first on year with XXXX. quarter a off color guidance. deleveraging full recap efforts of our and December provide I refinancing during will and our some

of Our driven $XX favorability Three of The revenue our per as the guidance outperformed better improvement over quarter XX%, range. up guidance. September million better line bottom higher was diems net end fourth midpoint exceeded and the points by guidance ticket our our range September as prices than were from we in

$X.X see fourth in to out quarter nearly and indication that a were billion consumers. up as close a and XXXX, our of fourth to a were year not record compared quarter yields revenues fact, net great In slowdown X% way we another do the

on members, currency party the March the fuel For million by exchange net a we thanks $XXX which and books $XXX our positive adjusted and to income. XXXX bottom million. we of the is shore, to from full offset of tremendous year, partially was with the of ship over rates guidance efforts as drag That over team line, delivered our a price closed

of XXXX, was the improvement occupancy increase X.X% X.X% a closing per year in driven diem the The guidance at by midpoint our double occupancy was the start double-digit revenue which over net levels. delivering to March of versus the gap historical while reach

with of improvements on all prices as X diems we ended board were the year X% per over on and net consistent Atlantic nearly spending Absolute across ticket quarters yields drove in both XXXX. of sides the

deleveraging a XXXX. I Next, will during efforts provide recap of our refinancing and

$X.X from operations. the As Josh of propelled indicated, billion our our $X.X of debt the strong full and guest on debt down strong cruise necessitated to pause reduced pay cash and operations year effort by journey XXXX billion, EBITDA us in

the months better year quarter enterprise we first value billion debt which X ago during XXXX, with made from of call $XX of and just During March $X shareholders. to ended transferring billion almost million over payments the just $X our of debt and debt $X holders billion we is conference forecasted than peak,

successfully down proactively we we deleveraging efforts XXXX, our program. and our profile debt interest expense. our and repayment started our addressed aggressively debt During accelerated refinancing We manage as

In favorable return secured the XXXX, reserves effectively debt it of of a by our on us a billion maturity senior we and along calling debt. with with to future confidence by cost gave to of the terms $X.X offering out accelerate our our customer refinancing, optimism our XXXX facility billion highest and notes $XXX XXXX This $X.X term about XXXX. deposit repayment stretched million loan a in B replacing

of debt $X In $X.X total billion opportunistically billion additional $X.X debt prepaid including addition, of debt repayments, we the cost. of a of for billion

at $XXX now of and to million us representing current we returned remaining processes be expect reserves million additional card card all an credit of reserves $XXX returned credit credit the this to Our quarter, substantially year-end. card

XX% the significantly which We of fixed interest provided and XXXX from from us XXXX fixed took both rate up of rates. over end our portfolio early protection increase at percentage XXXX, debt XX%, actions to rising the our levels in to in

profile rate drove average business our All improved X.X%. our address savings is compared our to March just these overall actions to debt guidance. of alongside Our interest million interest $XXX performance, over

maturities in $X.X in have billion billion refinancing opportunities XXXX. managed maturity and of been XXXX Our forward, and $X.X continue looking XXXX billion debt towers evaluate additional well next $X.X just in to year, prepay opportunistically we with And will debt.

So replacing ships of in higher export XXXX. debt XXXX, as take we credit will be cost rate financing delivery we fixed with lower-cost during

throughout improve continue as metrics will also grow. our Our EBITDA leverage continues to XXXX to

Now turning guidance. our to year December XXXX full

compared increase We are a XXXX. capacity to about X.X% forecasting of

an for with XXXX strong improved XXXX. in when increase a improvement are our X.X% of of year diem our forecasting we revenue XXXX. net to where on yield increase compared And XXXX We expecting is delivered X.X% guidance to that net deliver versus full per top XXXX the results approximately

The is in improving all ticket sides spending onboard . prices, both parts, increase the X of with components and strong higher improvement a on the in yields all higher the XXXX net occupancy higher component result of [indiscernible]

to drive positioned is same significantly sell full less well as year time last to for inventory XXXX higher levels. year pricing the to are X%. increase over Occupancy remaining to of track We with return despite historical on the a XXXX ticket capacity

XXXX watermark high in occupancy. Keep a mind, was

optimize to we well range and forecast our record total balance within revenues occupancy historical we XXXX, value deals. be For as achieve to pricing

may fuel versus Now for without to available expected or lower is turning ALBD, X.X% be approximately costs to XXXX bird currently per costs. cruise up XXXX.

of main X there speaking, change. Broadly the cost drivers are

average with cost increase decelerating across our for is inflation forecast our all First, globally. inflation nonetheless, categories X.X% but an

in higher XXXX Second, to to on as percentage should impact compared cost levels, historical occupancy the returning XXXX. to points X with X.X be

XXXX, scale And year-over-year somewhat about of by will increases is efficient increase economies comparisons various impact expected expecting are our dock by the X/X. dry we we more taking of growth cost along points, be these a larger, with couple countering these four, to delivery other days, cost of XXXX, mitigated which of is optimization which in versus headwinds, enhanced by an XXX initiatives. expect of cost XX% given of Third, overall capacity ships,

consumption X%, $XX by of fuel favorable And XXXX currency that XXXX impact goes by top fuel is from expected while exchange to way. slightly and of expected price XXXX. currency the the Fuel is and XX.X% impact is rates another achieved lower other per with the ALBD favorably reduction million to million that to $XX decrease pricing on change

few And first guidance in about net note yield A increases XX.X% the quarter finally, full to outsized things XXXX first first by in the quarter occupancy. XXXX. a the of improvement larger versus the higher is quarter driven X.X% year, for

It's XXXX. second did to of the we that reach get occupancy not half historical not until levels

is there So opportunity yield occupancy-driven in first much the half. net more

X.X% cruise side, fuel On the the cost cost higher is by and of factors. XXXX for main available per first the driven day berth guidance without quarter lower X

First, it in total quarter. in X% cost it drives a the will occur the greater yield also increases, which drag while the quarter, means to greater largest X% quarter. cost in in improvement the increases first And first of occupancy drives

of for Second, while the dry XXXX dock to increase costs dry as drives the in first of dock a impact cost quarter quarter. our prior about full X.X year year points the this seasonality guidance, costs compared

is total seasonality increase which will a quarter. points. XXXX XXXX, X approximately and of Advertising to X a points advertising as of of X the quarters compared into expense variety in cost other of expenses between put Third, the alone differs the this

our optimization fourth, scale other like year the growth, along cost from mitigated by And with various economies full initiatives. inflation of capacity

X%. to without first second berth fuel is guidance implied quarter the Given for for cost the costs cruise fourth available day, higher the quarter approximately the the in lower

the year $X.X improvement billion In net for summary, full XXXX. our all approximately at from together, forecasted these income XXXX with significant billion a guidance is EBITDA putting $X.X factors

let's For to that million our down achieve back efforts in notes, those EPS, to successful along improved related of and company's you our on you EPS, financial who fortress XXXX $XX leaves long-term expense the SeaChange of deleveraging need are not road and to placed refinancing guidance the you December calculate path convertible our goal, the our when our to modeling the moving delivering financial our rebuilding XXXX, results and forget interest diluted firmly us shareholder XXXX further with value. us add

call And let's up questions for now, operator, open the

Operator

Steve Wyszynski Instructions] first question from with [Operator Our Stifel. comes

Steven Wieczynski

Josh the to return a It call based the be So the year on has the then somewhat plus about pricing occupancy fact end majority this seems yield if momentum guidance or normal have should that from geographies. might just when up seems somewhat at like point? levels. pretty think we yield across David, strong being we now. your your X.X% to It that for And conservative this guidance healthy or of year,

give forecast? onboard and So pricing. of -- of the opportunity more somewhat the can is, might you question about -- the seems view little close-in I you guess taking trends And us be makeup color your it then a around the taking a conservative of the like around underestimating yield potentially

Josh Weinstein

holidays too. to you, happy Steve,

our volume accelerating hope year. have and the you're as right call and we we've So seen seeing Look, said, on the a faith you good in amount of in well how forward the momentum I good booked in price. We now. come because given are. world And we're right, of with the look visibility how we to I estimate a

with very trajectory we're pleased So been the that seeing. we've

Wave. is January disadvantage Obviously, of end before of doing December little do bit of February. a also into We a this in versus this have

want So I outperform. all given. obviously, see, I always can a tell we we you to what baked that's and is in mean, we've

Wave So tell is I under that, you ended belt. March said last wave year. with since our I thing in hasn't think the best talk can Having we'll

we'll So can. to ride long we continue as as

Steven Wieczynski

a then, Let me ask that Josh. way different

onboard are of embedding guys Basically, out you see to what assume in has onboard a 'XX? onboard. remains of with it as you robust guys still could pretty assuming bit in as of that or we Is are been? onboard slowdown potentially fair little meaning a you in should kind conservative being if are So you shake way it terms about think the

Josh Weinstein

to to increasing forward off when a comes a of expect job good per experiences. we be real doing versus providing XXXX. great Brands performance and diems spend, onboard differentiated onboard, XXXX it more our are in coming We're pulling

So expect versus in an we absolutely increase XX. ' 'XX

Steven Wieczynski

we Got And think the about gave in said, sure the real be I X%. there to make think quarter the the impact thinking more second third good some high should cost, that one then or -- I I if we -- And if of pretty want David, should those other? through of one be the that's anything about all in everything quarter is might you. the the to color through heard into question, the and quarters move first just of why Okay. going the terms think it's could. way that the rest right. one you you quick, around so about fourth costs, year, those cadence we around quarter, XQ if XQ of that I as

David Bernstein

No. Yes.

average was that trying not say quarters X What I I quarter. for together is individual to would do So to guidance trying each the give X%. collectively was

see down year-over-year versus that quarter, they'll differences the that forth. dock will be will in is We some of but great example in up second dry be days XXXX. A

there other things. advertising, So There's differences and be differences. seasonalization also will

say every quarter, X% on was just I the not X% So average X. trying to for

Operator

comes question next Barclays. from with Our Brad Montour .

Brandt Montour

And and I guess targets you've so a on made 'XX the target that tailwind. us has drastic So that towards an SeaChange been 'XX and fuel update gave improvement Josh, expected. far nice then long-term you the in

within maybe your focus guidance, yield expectations line for on target your think fuel about internal and growth ramp? you 'XX just is take that how X-year with that If do Or you out it? in

Josh Weinstein

Yes.

it occupancy June I talked the talked to think out and far fact where laid the -- going historical time that back in tell, fair about will that's expect play take? we out. it's were all we about to 'XX we exactly pretty in versus in that we We as it first much 'XX. getting we that's to say when what that for how can as And of it's

pricing we predict be to we every that, 'XX, low estimate to of top on digits up 'XX. price year, -- mid-single 'XX, And

year -- forward. And we we a pushing so of like half are how keep and feel XXXX, ended ahead we bit given the second we the entered we'll little

Brandt Montour

you your question And base-loading wave but you you if have that curve? impressive. book. never strategy then versus a is, me incredibly the you impacted -- as it meaningfully Okay. have would said you that -- been if could also in of prior been mean just you give Great. 'XX us that been the what go I for is crux X/X years, sense what of the were that this struck And of pricing think and do historical January you've had kept season would booking into booked sort

has strategy with you move changed pricing So that as your through wave?

Josh Weinstein

an and pulling would it playing keep out it by the this pricing elevated to all at So is better ability to out play expect environment as pricing forward our level. we volume, gives us control our over

we that, in do occupancy we but right? well. being as significantly it's mind, keep the than it -- XX long year-over-year. which higher so . This higher And above of that higher good Which QX of important points points 'XX, we last very booking It's XX I than let's were we mean, when -- are to last a window. out higher literally entered is playing should. it's expect a points is XX as progress, end normalized was than our is And we year year. XXXX

feeding So pricing that's playing is along. into all the And strategy.

were XX tried points quarter higher to in it was. we When year, fourth the not position the clear than about entered I my occupancy how this were say notes, we of year As sure higher. prior I'm in and prices

pretty is everything on that's we've quarter, way advantage much through our occupancy booked prices keep managed made we considerably As to that and higher. the now

working is way it the we So anticipated.

Operator

from with Citi. Hardiman next James comes Our question

James Hardiman

anyway give Steve's So only I'm a lot There that through of because last year. guide to plays . Obviously, your conjecture month they assess quarter we a you your environment wave? whether sort slightly way. guide first a try to in then to was of us at Obviously, looks of of different as us effectively take ask, the gave not are going and being demand what of conservatism like. they process thought year into full first of advantage would or similar wave you that ahead peers that question get I bit as guidance, interpret that that the think, an level

Josh Weinstein

are we normal. few and this do quite back This used into is I years, Yes. we Well, was before we get last back think that to what it the cadence. important effectively to

Now been. book highest we've ever good news, we are

we So even we visibility do than had XXXX. before have more

a position preliminary setting good be us that's guidance XXXX. up to So to I for think give in pretty well able you be to this

we in high expect year, brands including wave on more and get a accomplish and of of the Obviously, focus remember, achieve, the to the what go and in them filling just an because we different advance such year accomplish be being wave. trying to in our last actually the in I trying but we term. what was to we the different benefit lot how brands have really have through the on we to term, to just time, were not we're to on a of And we Wave, short -- perspective. able ships were longer things. whole have wave my strategic focus This expectations from are got position occupancy needle, this during you trying to I

I So well. think up sets it us

apparently, please work. everybody like X, keep can that's to the And lot But David asking fiscal else. January we a on year-end change start I like and of

going So we're do not that. to

James Hardiman

conversation talked better And the in remarks was comment seems point XXXX. that are of seems just confidence your be only to much new-to-cruise about you already but numbers to a Josh, But the to in think So like latter not terms consideration might prepared numbers about there a story among Carnival right? then new-to-brand cruise Got relative in but be what industry. better one, the big you brands, are seeing maybe having cruising. you it. about talk of a people specific improving into that as

Josh Weinstein

Yes.

into on awareness and really phenomenally consideration who with how target our bookings. performance creative think And that brands making to speak that converted and then understanding their I doing is sure are that, in marketing. them the just side, gets to audience

I cut with market. the examples gap pricing We've been my campaigns job on are or of the and click -- still we versus either materials it's through value us, started have said great land. we it's gave up. in on have. that got I as we've the that the at -- just about And slides prepared a front on getting a So start. And we've a captivating They're improved through as not for to can prepared remarks, put big got new-to-cruise XXXX, much in several think that you doing new-to-brand unfortunately, few

time. those at are So all more expect things wind and of that our backs, over I of

Operator

Our Jamie next comes question from Katz Morningstar. with

Jaime Katz

a of move normal back shifted you the a hoping a couple might last and market they to talk closing I'm the that bit we can little European strategy. mix? the cruisers more expect bit changes about it fact the in be that gap, know to back years. the given North I But or sourcing to little to American the should strength

Josh Weinstein

Well, Jaime.

those And with of the really comes take dedicated a not are and markets I in Costa, should kind Mediterranean. Italy, about brands European or Spain and their in France. it from Cruises but Germany, either and for we the Costa portfolio across market So think our we deviate of We've the P&O and to didn't the step market got U.K., think how AIDA when biggest biggest all dedicated back our our strategy to second case brands. and operate. we just of Italy, the in And

they be to so Holland North they as about in to through And last the be to cruise the respect cover the right knocking has started change see the the and that that. Princess, talking much been we're sourcing we've that when come term, than really and our it comes geared and for to of ball. open starting we view so cetera. much to there long had to et in, been for continued . With few hasn't they're towards dramatic support those America's America that line, slow quarters. Asia, strength And that have to the really continue have other markets fact off Carnival Princess was that American as sourcing in thing will absolutely and been the And markets brands,

to consumer take a European to bit into that. the that of ride We've are the very strength U.K. repositioned. we've positioned well continue So But and I think of done XXXX. the and we consumer

Jaime Katz

there of on then this And commentary Okay. call. lot a positive was obviously,

would concerns that there's if curious you I'm So there out that anything the audience? you left share with like to

Josh Weinstein

No. Great question. No. Thank you.

Operator

Our next with Truist. question comes from Patrick Scholes

Charles Scholes

going everyone. fuel ask if you I Good Josh, morning, this touching I... but time, not planning you to am on were

Josh Weinstein

Patrick. you, Thank

Charles Scholes

probably new-to-cruise, mix? that sometimes are. what it and you part the larger you costs? of typically XXX you Black margins? not, but if Monday, want just Friday, Can imagine books the revenues hear would agency direct, impact listen especially impact should to you a new-to-cruise you've and -- booking about on late, talk I what with be seen the the number to is I so, Sometimes becoming of Cyber trends saves trends commissions. call from And travel around which of on those potential your

Josh Weinstein

you. Thank

for Cyber Friday. you're the a versus that candidly, where Black our new-to-cruise Monday So quarter, I year-over-year, literally loyalists. don't up which period new-to-brand and I have brand is significantly fourth obviously do have of new-to-cruise of some don't that the I versus includes breakdown XX%. -- referencing obviously, the have

time overall the get sorry, cruised strategy, taking -- increase part is folks never of and taking demand, was that a pardon, before to allow so have pricing us over But frankly, that in part is sale sale. for, share raise I'm pipeline greater And the a -- our strategy to of that of them everybody. right? who

particular what going it cost the the a itinerary new-to-cruise themselves, With respect brand to make that most to web a guests effective. coming the new-to-cruise I always is cost Obviously, cetera. comes what's direct wouldn't characteristics is, Because categorization on depends most way. of really the in though the be et efficient. what's on length the it

lot which is for lends comfortable time, net to just more to great we more. historically, crowd, will on over-index But rely doing first that, Now a job shorter I frankly this driving curve. we've younger they're as the itself mean, catching trying the our trade I great to do will and absolutely the because relied to on they and things also been up expect them showing on And in for new-to-cruise direct. a strength out us. continue, and maybe to partners that we've of And the it where in of them for critical clearly, are well. have and speaking, they're cruises a decades done new-to-cruise on playing really decades And year-over-year, around

Operator

comes UBS. Farley with from question next Our Robin

Robin Farley

implies I per at to circle looking in to your recovery X% of XXX is guidance being Great. than less maybe guidance diem wanted levels yield points back to growth. occupancy and maybe kind just that your the basis previous to XXX

math know if clarify. So if doing I thing wrong the just there's to -- don't I'm any I there,

talked considerably books be And nicely next year yield also, then for Bernstein the in... for you've being price year, think about the higher, glossary it's the Which guidance deceleration like but just -- David higher. the on your is a would

Josh Weinstein

I'm at the Yes, I glossary. laughing going, Robin. keep

Robin Farley

in sort that correctly, think the deceleration of price glossary Be I interpreting implies a there. if I'm

Or price help the could just with on higher because lower, glossary nicely so higher to the that us you is just wrong, [indiscernible]. and maybe just onboard diem while but a -- is per So that my up growth definition brings math with rate, like maybe yield? and the considerably that is

Josh Weinstein

remarks, it said Well, pretty well. he Robin. said Thanks, I thought it David actually, in the prepared

what you you said? want . do David, So repeat to

David Bernstein

Yes.

XXXX like high range for we to occupancy. look was of were XXX% in occupancy XXXX So levels And the the keep to XXX%. in the and watermark mind historical back that

we're weren't be going solidly back be XXXX. back what high is occupancy historical watermark to So saying to we to the we're we saying levels, of but will

in So keep that mind.

mind versus we up we was for per considerably when expectation our that about we thing diem guidance, the March increases that the X.X%. last gave thought X.X%, higher in other had and The nicely about wound higher. Keep

year. And our per book considerably may what so a built is some comparison the least of that, very be basis we're of higher at a guidance. pricing a saw we But diem result in basis, half year-over-year nicely the see strong back pricing to on as looking And on position higher. into a

our built can you put you those we when understand how So factors together, guidance. X hopefully,

Josh Weinstein

add Yes. that focus our And me thing price ship one crews. is of add on to I'd its revenue be optimizing Robin, on -- most when that's combination that and a And occupancy the which possible going is, let the leaves just generating thing, relationship.

play happiest to to that you that ending can in we combine to XXXX when XXX% that magic watermark the getting in to XXX%. be. make no the with along back of high there's And XXX% we So fringes, it's pricing, point play we the sure

Robin Farley

versus the on don't -- I understood you're manage But range. that that imply that current does a nicely to once that you're up, books being up levels. that you right, certain you the that price occupancy would from expecting -- saying be a occupancy, considerably you're just what comment seem the in to deceleration

growth. just conservative, I if that's interpreting lower a rate just moving in so -- correct is the to answer considerably you're maybe of being as being but And nicely mean, I

I guess clarify. -- that's So what that's I'm trying to

Josh Weinstein

with XX.X but just which what real glossing points out over when So quarter, right? XXXX. everybody we're in came to get one is lap it through That's quick, was we We the fourth thing price. going to up stress,

go about surprisingly, to think have most booked quarter, our stout. as so the you the we If not fourth far business, the in

the larger first get which into when full we guidance. as to and So and and to take But quarter, towards year expect quarter we're over to build most we equation booked, we second the a have that have that the the just giving cycle we through thing whole we we're hurdle, do. fill

Robin Farley

guidance in about? your X-year year. think 'XX. one low each very about side, clarification. perfect and makes 'XX And being Is On 'XX, like -- expense This up 'XX in up the above talked expense single low low should probably growth implies up SeaChange year the just we digit how kind X.X%, last XXXX on then 'XX, or sense. you've That single-digit that of

single change target? In much possibly digit, would there's have how in more think your in a that your average thought SeaChange be other about how don't than you it's in should and would 'XX be the just up a but would to though that X-year suggest. to conservative, had up we would better not keep 'XX -- -- a And bit be again, you're being expense on if I words, even know 'XX low

David Bernstein

Sure.

our but I XXXX did were June, SeaChange digits, on that low guess, and in I both say yield the cost. it impacts due was about presenting we on have single talking in some were So the outsized program, fact the occupancy, we'd to when we

had that X.X occupancy also So probably this the indicated cost points I would X year. X.X%, to

that digits single So built in that low are equation was model. we into the

feel be way I of targets. towards those we're achieving as indicated, And our like where Josh So well we to positioned. on ahead expected we very are

Josh Weinstein

trying I to get Robin, looking ahead call and of at you to guidance would the didn't I without 'XX get say, 'XX.

Operator

Politzer comes Our from next Dan question Wells Fargo. with

Daniel Politzer

your and more more broadly? Or Carnival from was Or centric line? just strategy I loading just The that actually bit certainly you more. we've the of related maybe Can compression a wanted base a to quarter was really Europe that uptick mean, on to or bit maybe touch little benefiting this fourth it in revenues was America impressive. North unpack little pricing seen? of more? alternatively on the some I was

Josh Weinstein

portfolio wide. was This

pleased where you color. into want we headed I David, don't where we're very we to know quarter. any if with fourth give the So

David Bernstein

brand did No, saw mean, managing a brands, up. yield revenue and Yes. taking strength the price It you're was And our I great right. all and bookings. we job in

that, And . result. end you a so as saw result the of

Daniel Politzer

a Got parameters bookings? terms in I also, mentioned sailings And see that. some activity think premiums like hundreds or can started bit know the in amenities, of talk booking us then you return started the on you I going Grand there. you that's Bahama, I per profile at? you receiving day, give capacity Are any looking to about And you know it. those little more there of you're to release. Are CapEx there

Josh Weinstein

Yes, let that. me start with

I Line, scheme lot the things you're really short talking because mean, booking. Carnival cetera, about grand still. We -- a of that have start of it's et in -- don't has tiny which doesn't programs, Cruise

as We'll in get through amount we it's now. color tiny respect. a that So XXXX give

come that. we'll to So back

X in $X.X This investment. we have other With a that, points, do big obviously, chip, investment. only respect XXXX. your and this we've is And to XXXX, can billion is we we in said have none type of

X. this the day resources way think say, brand really the right we to Carnival ships So XX you've and and from us benefit our optimize is heard

So excited very, very that. about we are

XXXX. want to myself talk is and I And more to and to hear wants this to get job about you who really of ahead. don't want to it. I to all get good and like ahead about to in be of what not come should I disciplining Duffy, Christine really can't a listen do to Christine going wait experience for

Daniel Politzer

I that? quarter Got and it. in was, first one that quantify impact bit And any Panorama, housekeeping. quick in in think, then just little of if the the a I out fourth to could service just way there squeeze quarter. of the Is

Josh Weinstein

probably pennies. the of a it's scheme In of things, grand couple

David Bernstein

in the one fourth couple like a and in the quarter Between first. penny maybe

Josh Weinstein

Frank, last have time we for one question.

Operator

Research. have with question from Infinity We Assia a Georgieva

Assia Georgieva

guys a on great Congratulations QX.

looking we're the apologize. looking I usual the at opposed great at to the in but we're as diems to to metric, more again, deals But that better. back get X.X%, happy I a XX.X% where wanted to metrics. I just back per finally was liked So

have we fiscal well, expense that yields docks, the of a the at of terms mind so good a have and program would part I David, burdens think, including view SeaChange I you throughout we outlook, through QX debt healthy year. sort by as Given least you to XXXX? the taking trying year-end Dry modify that in understand interest of EBITDA very maybe us in QX. into and

David Bernstein

Sure.

for It our you the mind billion pay that XXXX $X.X than close less the year million So debt. XXXX. $XXX -- with release. than like The interest while down we a guidance in less to average balance expense probably keep to saw start did for in was quite of XXXX. bit press is And is

is income million. $XXX million. by cash offsetting about the declining probably savings that we in have the also mind with expense keep interest lower interest less on that will And that $XXX books. by But rates, So

on $XXX . year-over-year basis. that's about a why million net of it's decline So in a interest expense

XXXX, about $X.X be it's in think I -- I Looking at replacing debt of said in credits debt notes, on. billion take billion we scheduled level, will we at but with the $X.X of looking actually we my that this the are that maturities export

that, I debt our of that. in but -- have into as And evaluating we addition guidance. are in some we to prepayments said, built So

So do expect to we down see go in debt to XXXX.

to our expect perspective do strong deleveraging we from because EBITDA see metrics substantially. However, grows a

also will our improve. debt-to-EBITDA So

Assia Georgieva

before at if opposed to a I quick follow-up, as I Makes my looking second we perfect sense. refinancing be ask repayment? may. And just Would as the question,

David Bernstein

are we both. looking So at

expect some of we to we interest As would down. to continue prepay also But far the on which debt refinancing, as cost expect to drive deleveraging. really top look continue and the that, to -- potential at

XXXX. in take And them. opportunities sense, so we'll we'll how advantage what are of it And to see if makes us presented

Assia Georgieva

Sounds great.

I anyone so don't ask has and touched on second think if And this. can I my question,

to Eastern to the Given geopolitical off pressures used Baltics comparing have and -- of kind clearly, we are have XXXX be XXXX books. which comparing when we the been St.Petersberg,

be by Yemeni [indiscernible] been Middle an have is that I military through one come we a But . targeted and to has will on [indiscernible] Persian going is the back to Any and the , East Now have in issue will stride or... of that thoughts believe, ships Europe the with Gulf. this

Josh Weinstein

we that's mind, be need is it. should mitigation to screen, our on we safety. our on we've priority and first already in plan keep our months is got this away. Obviously, And going -- radar But

I hate right so our it to always that always something brands. say and And we'll . way, there's But is there the thing. but do something

Assia Georgieva

XX long I've been around years. enough,

something, I is So . agree Josh, always there

Josh Weinstein

right. All

end to I say holidays Have happy new think with good . that, we do you I'd thank much. very but it, have year. and to a everybody,

Operator

conference today. you disconnect a ask the for thank that conclude participation you does Thank lines. please your you. for great call Have day. and That We your

Carnival Corporation & plc (CCL) 21 Dec 232023 Q4 Earnings call transcript