Norwegian Cruise Line Holdings Outlines Ambitious Targets for Financial Growth and Sustainability

Published on May 21, 2024

Norwegian Cruise Line Holdings Ltd., together with NCL Corporation Ltd. and collectively known as “Norwegian Cruise Line Holdings,” “Norwegian,” “NCLH,” or the “Company,” is hosting its Investor Day today at the New York Stock Exchange. During the event, the Company will unveil its comprehensive “Charting the Course” strategy. This strategy introduces a renewed vision and strategic initiatives focused on four key pillars: people, product, growth platform, and performance. Additionally, the Company will outline three-year financial and sustainability targets designed to enhance shareholder returns. The Company is also raising its full-year 2024 guidance across several metrics.

The “Charting the Course” strategy presents a bold new vision: “Vacation Better. Experience More.” This vision is crafted to connect with guests of its three award-winning cruise brands—Norwegian Cruise Line, Oceania Cruises, and Regent Seven Seas Cruises—and to motivate both shipboard and shoreside team members to deliver outstanding experiences to nearly three million guests each year. This new vision positions the Company as a leader in vacation experiences, both at sea and on land.

The strategy is underpinned by four strategic pillars: People Excellence, Guest-Centric Product, Long-Term Growth Platform, and Exceptional Performance. These pillars are designed to transform the Company’s culture, direct investments towards offerings that guests value, capitalize on high-growth opportunities, and improve financial performance through operational excellence. All these efforts are supported by the Company’s Sail & Sustain sustainability strategy.

“We are thrilled to begin charting our new course with a transformational strategy that will guide our plans for future growth. Our new ’Vacation Better. Experience More.’ vision not only captures our commitment to offer our guests unforgettable vacation experiences, but focuses our over approximately 40,000 team members to deliver on that commitment through the several strategic initiatives that comprise our ‘Charting the Course’ strategy,” said Harry Sommer, president and CEO, Norwegian Cruise Line Holdings Ltd. “This strategy has already been set in motion with initiatives such as our recent announcement regarding eight transformational newbuilds for our three brands and infrastructure improvements for our private island in the Bahamas, Great Stirrup Cay. We will continue to innovate and build on our foundation of success—not just financially, but also sustainably through our Sail & Sustain program.”

The Company’s strategic initiatives are designed to drive performance and achieve its “Charting the Course” financial and sustainability targets by the end of 2026:

• Adjusted Operational EBITDA Margin: Aiming for approximately 39%, nearing historical levels.
• Adjusted EPS: Expected to reach around $2.45, reflecting a 2-year compound annual growth rate (CAGR) of over 30% from 2024 to 2026.
• Net Leverage: Targeting a reduction to mid-four turn levels, demonstrating a commitment to strengthening the balance sheet.
• Adjusted ROIC: Anticipated to achieve a record 12%, exceeding pre-2020 levels.
• Greenhouse Gas Intensity Reduction: Committed to a 10% reduction from 2019 baseline levels.

Given the current strong demand and an improved outlook for the year, the Company is raising its full-year 2024 guidance. Expectations for Net Yield growth have increased from 6.4% to 7.2%, Adjusted EBITDA is now projected to rise from $2.25 billion to $2.30 billion, and Adjusted EPS is expected to grow from $1.32 to $1.42.

“We have continued to see very strong demand and record bookings. We are now thrilled to launch this financial plan by setting long term targets with increased 2024 guidance, putting ourselves on solid footing to enhance shareholder value in the coming years,” said Mark Kempa, chief financial officer at Norwegian Cruise Line Holdings Ltd.