NCLH PRESTIGE INVESTOR DAY (PART 2)
Jason Montague, President and COO Prestige
- In the past, had acheived $25m total synergies off of $750m revenue base
- Oceania yields bounced back to 2008 peak yields in 2012
- Net revenue EBITDA margin should be metric to look at
- 50+ years old accounts for 80% of luxury consumers
- Prestige: Winter capacity - Asia/Austrlaia/ French Polynesia/ Caribbean
- 2015 capacity
- Regent:
- Caribbean: 10.9%
- Europe: 36.0%
- Alaska: 9.0%
- Asia/Africa/Pacific: 29.1%
- S America: 4.1%
- Other: 10.9%
- Oceania:
- Caribbean: 15.7%
- Europe: 34.1%
- Asia/Africa/Pacific: 18.8%
- Caribbean: 15.7%
- S. America: 5.9%
- World: 12.2%
- Other: 8.3%
- Prestige's visibility into future revs: 20-30% in advance of its industry peers
- Prestige: only accounted for 1% of premium brand market in terms of passengers - huge opportunity
- Sees continued double-digit international growth
Wendy Beck, CFO NCLH
- 2015 guidance excludes Prestige-merger related amortizations in backlog, and customer relations: $101m in 2015, $38m in 2016, $35m in 2017
- Pricing raised in the past few weeks
- Higher MGO grade fuel mix for 2015
- On IPO call: wanted net leverage ratio below 4x. In 2014, Norwegian brand stand-alone net leverage was 3.8x
- Longer-term goals:
- 3-4% net yield growth
- +30% ADJUSTED EBITDA margin
- <4x net leverage ratio
- Adjusted Net income growth: +30%
- Adjusted EPS of $5.00 by 2017
- From $2.80 FY 2015 (mid-point)
- $1.74 from fleet growth (including newbuilds); organic fleet should generate 2-3% growth
- $0.13: scheduled interest expense
- $0.14- voluntary debt prepayments: $350m baked in 2016 and $440m in 2017
- $0.19 - fuel hedges in 2015
- ROIC: Double from IPO level's 7% to ~14% in 2018
- Assume no share repurchases (if they use the cash to buyback shares rather than pay down debt, it will translate into additional 4 cents in EPS)
- Weighted debt cost: 3.72%
- Leverage targets (combined company)
- 2015: 4.3x
- 2016: 3.3x
- 2017: 2.3x
- ROIC targets (combined company)
- Payback of Prestige ship: 4.5-5.5yr range
- ~13% for 2017, 14% in 2018
- Fuel: Don't hedge MGO grade
- Increased fuel hedges to 77% (68% previously) for 2015 currently and 12% for 2018 currently (8% previously)
- 2014 FX exposure
- 8% Euro (1 cent change in FX results in 4.3 bps in YoY change in yield)
- 6% Pound (1 cent change in FX results in 2.0 bps in YoY change in yield)
- 2% Aussie $ (1 cent change in FX results in 2.1 bps in YoY change in yield)