NCLH - PRESTIGE INVESTOR DAY

02/25/15 11:06AM EST

CONF CALL

Frank Del Rio (President/CEO)

  • Synergies will be done by end of Q3 2015
  • Sold Oceania to Apollo for $475M 
  • Norwegian brand
    • Four 4,200 berth newbuilds on order (Q4 2015, Q2 2017, Q2 2018, Q4 2019)
      • 2018: Breakaway Plus 3 (possibly targeting China)
      • 2019: Breakaway Plus 4 (possibly targeting China)
    • Average age is 51
    • Kids comprise ~12% of passengers
  • Oceania:  new R-Class ship by 2Q 2016
    • Average age: 67
    • Cater to retired/semi-retired seasoned travelers
    • Very high repeat customers
  • Regent Seven Seas
    • Explorer to arrive in mid-2016
    • Most inclusive luxury experience
    • All-suite staterooms, 97% with baloncies
    • High net worth guests comprise 50%+ of volume
    • Average age: 68
  • Oceania: between premium and luxury segments
  • NCLH: has no internal competition within each brand segment (premium, luxury, contemporary) as opposed to RCL and CCL
  • Oceania/Regent: Destination is key
  • Cost per berth
    • Breakaway class: ~$215k
    • Sirena: ~$180k
    • O-Class Oceania: ~$525k (richer cabin mix on O-class)
    • Seven Seas Explorer: ~$600k
  • Jason Montague/Drew Madsen as brand Presidents: primarily responsible for driving occupancy
  • Revenue mgmt department:  focused solely on pricing
  • Oceania/Regent:  have highest per diem in their respective brand segments
  • Cost Synergies in 2015: $25m in the bag
    • $10.4m in consolidation of office operations
  • Revenue Enhancement opportunities
    • Optimize itineraries
    • Shore excursion sales
    • Ticket Price - Deal vs Price marketing message
      • Selling the deal (value) rather than low price
    • Leveraging relationships with Travel Partners catering to affluent travelers (occupancy)
    • Cross-utilization of past guest database (occupancy)
    • Best Practices: maximization of Norwegian's upscale offerings
      • Pride of America
      • The Haven by Norwegian
  • Cost reduction opportunities
    • Sharing of best practices/economics of scale
    • Cost of delivering product
    • Further rationalization of overhead
    • Foster culture of cost consciousness
  • 'FDR's' New Deal
    • Flawless execution of strategy in place
      • Potential of Asia and other new international source markets
    • Drive higher per diems to delivers higher yields
      • Weaving in the Prestige Go to Market Strategy
    • Leverage scale to suppress costs
  • Prestige:  carries 200k passengers/yr; 50% past guest participation on a database of 300k past guest households
  • Norwegian: carries 2.1m passengers/yr; 35% past guest participation on a database of 3.7 million past guest households
  • 'Low hanging fruit' with taking advantage of past guest databases across brands
  • Annualized contribution for Norwegian newbuild: $100m
  • Incremental increase in Norwegian ticket pricing growth necessary to achieve equivalent of newbuild net income: ~3.0% to 4.0%
  • Norwegian waiting for China to mature and waiting to replenish the Norwegian fleet to rightful capacity
  • China:  
    • Looking for China partner
    • Go/No Go decision by Spring 2016
  • Targeting additional $10m for marketing for Wave Season 2015
  • Prestige:  usually 65-75% sold for following year
  • Regent per diem: $700
    • Introduced pre-cruise hotel stay in 2011 which raised pricing
    • 2009-2014 CAGR: +6.8% net ticket yields
  • Top source markets:
    • Oceania:
      • US: 64.7%
      • Canada: 14%
      • UK: 6.2%
      • Australia: 4.0%
    • Regent:
      • US: 67.5%
      • UK: 11.6%
      • Canada: 7.4%
      • Australia: 3.7%
    • Norwegian
      • US: 73.9%
      • Canada: 7.1%
      • UK: 4.2%
      • Germany: 2.2%
    • Norwegian sources 8% in California (vs other brands sourcing 25% in Cali) - sees opportunity there
  • On March 1, 2015,  NCLH will raise bar list by 6.6%, which will generate $10m in onboard revenue with no cost implications
    • More onboard opportunities in medical center. (Norwegian brand loses money in medical center. Want to get to break even)

Drew Madsen (President/ COO)

  • The Haven: Oceania/Regent cross-marketing opportunity
  • Pride of America:  highest yielding ship with strong double digit premium to core fleet
  • Dry dock schedule 2015:
    • Norwegian Star (March)
    • Norwegian Gem (September)
    • Norwegian Epic (October)
  • Norwegian Escape (Nov 2015): largest Haven complex in fleet
© 2024 Hedgeye Risk Management, LLC. The information contained herein is the property of Hedgeye, which reserves all rights thereto. Redistribution of any part of this information is prohibited without the express written consent of Hedgeye. Hedgeye is not responsible for any errors in or omissions to this information, or for any consequences that may result from the use of this information.