Norwegian Cruise Line Holdings Ltd.

Good morning and welcome to the Norwegian Cruise Line Holdings first quarter 2024 earnings conference call. My name is Joe and I will be your operator. At this time, all participants are in listen-only mode. Later, we will conduct a question and answer session and instructions for the session will follow at that time. If anyone should require operator assistance during the conference, please press star then zero on your touch-tone telephone. As a reminder to all participants, This conference call is being recorded. I would now like to turn the conference over to your host, Sarah Inman. Ms. Inman, please proceed.

Thank you, Joe, and good morning, everyone. Thanks for joining us for our first quarter 2024 earnings and business update call. I'm joined today by Harry Sommer, President and CEO of Norwegian Cruise Line Holdings, and Mark Kempa, Executive Vice President and CFO. As a reminder, this conference call is being simultaneously webcast on the company's investor relations website at www.nclhltd.com backslash investors. Throughout the call, we will refer to a slide presentation that can be found on our investor relations website. Both the conference call and presentation will be available for replay for 30 days following today's call. Before we begin, I would like to cover a few items. Our press release with first quarter 2024 results was issued this morning and is available on our investor relations website. This call includes forward-looking statements that involve risks and uncertainties that could cause our actual results to differ materially from such statements. These statements should be considered in conjunction with the cautionary statement contained in our earnings release. Our comments may also refer to non-GAAP financial measures. a reconciliation to the most directly comparable GAAP financial measure, and other associated disclosures are contained in our earnings release and presentation. With that, I'd like to turn the call over to Harry Sommer. Harry?

Thank you, Sarah, and good morning, everyone. Thank you all for joining us today for our first quarter 2024 earnings call. It's such an exciting time for our company with wonderful new product available across all three of our award-winning brands, strong demand, and some recent noteworthy announcements that have solidified our trajectory for years to come. The demand for cruise vacations continues to be at all-time high, as evidenced by record booking, record book position, and record advance ticket sales, as the continued innovation and service delivery on board our ships lead to exceptional guest satisfaction scores. The combined effect is strong financial performance in the quarter, and an even brighter outlook for the year ahead. Today, it's my pleasure to discuss some of our Q1 milestones, including the recent new-built ship announcement and peer development, our strong performance in the quarter, and the exciting booking trends that are driving our improved guidance for the remainder of 2024. I'll also be diving into the significant progress we've made on our global sustainability program, Sail and Sustain. Later in the call, I'll turn it over to Mark who will provide more color on our first quarter performance and update guidance for 2024. We kicked off the year with impressive momentum, carrying forward several positive trends from the end of 2020-23. As you can see on slide four, we sustained strong demand throughout the quarter, achieving record bookings in this period, which led to our most successful wave season ever. As a result, our 12-month forward book position remains at all-time high. In terms of financial results, adjusted EBITDA nearly doubled during the first quarter compared to the last year on the back of stronger pricing and higher occupancy levels. Our margins also noticeably improved during the period, with our core costs essentially flat year over year, leading to a robust growth in adjusted operational EBITDA margin, which is adjusted EBITDA divided by adjusted gross margin, now approaching 33% for the trailing 12 months. As a result, we reduced our leverage by a full turn during the quarter when compared to the end of 2023, ending the first quarter at 6.3 times net leverage, marking an important milestone in our journey to strengthen our balance sheet and well on our path for the one and a half turn improvement in net leverage we guided for the year. These strides were recognized by S&P, which upgraded both our issuer credit rating and issue level ratings during the quarter. While we'll give more details later in the call, I can't help but share that we have exceeded essentially all of our guidance metrics for the first quarter of 2024, and consequently raised guidance on our key metrics for the full year, including net yield, adjusted EBITDA, adjusted net income, and adjusted EPS. Another key milestone during the first quarter was our historic new build order, which we shared on our last conference call during CJ Cruise Global. Encompassing eight new ships across all three of our award-winning brands, this is the most transformative new build program in our company's history. We also announced the construction of a two-ship pier at Great Sturb K, which will enhance our existing infrastructure on the private island, making it an even more attractive destination for our guests. I am thrilled about our future, as I know we're paving the way for our continued growth in the next decade and beyond. Our first quarter successes are due to our continued focus on our near-term priorities, which are detailed on slide five. We successfully grew capacity 8% compared to 2023, while achieving a record 12-month forward book position, all while increasing price and reducing our net leverage by a full term. And we're seeing strong results across the board. Turning to slide six, we have shown you frequently in the past I want to once again emphasize our long-term strategy of delivering measured capacity growth and optimizing our fleet to drive strong financial returns. Our new build pipeline increased from 5 to 13 chips in the quarter, representing a capacity CAGR of 6% from 2023 to 2028 and 4% from 2023 to 2036. Historically, capacity growth has driven outsized revenue and adjusted EBITDA growth, and we expect this trend to continue with the incorporation of larger and more efficient state-of-the-art vessels to our fleet. Turning our attention to the current booking environment shown on slide 7, we are witnessing robust and resilient consumer demand across all three of our brands in all of our markets. As a result, during the first quarter of this year, we noted record bookings, culminating a record wave season, leading to a continued record book position for the next 12 months, extending into 2025. We continue to see healthy demand across all markets, brands, and products, including Europe and Alaska, which continue to perform very well and make up the majority of our deployment over the summer. All of this strength is despite the cancellation and rerouting of our itineraries that we announced in the middle of East, and Red Sea earlier this year. We also recently announced the cancellation of all Red Sea sailings across all three of our brands for the spring of 2025, and replacement sailings are already on sale. By adjusting these sailings well in advance, we can assure a full sales cycle for the replacement itineraries and no impact to our 2025 yields. Overall, we are encouraged by the strength in our book position for the next 12 months which remains at all-time highs with commensurate higher pricing. As a result, yield growth is strong. During the first quarter, yield growth exceeded guidance, coming in at 16.2% on a constant currency basis, up 70 basis points from the guidance we provided just two months ago in late February. 2024 is shaping up to be a strong year, and as a result, we are raising our full-year yield guidance 100 basis points from 5.4%, to approximately 6.4% on a constant currency basis on the back of a strong first quarter and strong demand for the remainder of 2024. Please note that our occupancy guidance remains unchanged, as we are essentially already guiding to full ships, so the entire increase in our guidance is on the back of stronger pricing. Onboard revenue also remains a highlight, with strength seen across the board. This is a positive sign that our target consumer remains healthy and resilient. We continue to absorb strong demand from pre-cruise purchases, which were up 16% compared to 2023. Pre-selling of packages of four cruise typically leads to a higher overall spending during a guest cruise journey. Turning to slide eight, to continue cementing our leading industry position beyond 2024, I'm excited to announce that this first quarter reached an all-time high in advance ticket sales. This success was driven by robust pricing, a dynamic deployment mix, coupled with increased pre-sale packages and capacity growth. Our advanced ticket sales balance rose 13% year on year, reaching a record $3.8 billion. Over the past quarter, we have taken considerable strides in our sustainability efforts through our Sale and Sustain program, which you can see on slide nine. We kicked off the year seeking out government grants to support our green initiatives, by applying to the EU Innovation Fund with the goal of accelerating the transition of our sixth FEMA-class vessel from being methanol-ready to being fully methanol-capable. We continue to be committed to our short- and long-term decarbonization goals. We're also proud to announce that 50% of our company-wide fleet is now equipped with short-sight technology, achieving our year-end 2024 target well ahead of schedule. This is key to our journey to minimizing emissions during port stays and contributing to cleaner air in the port communities we visit. Our proactive approach to environmental impacts didn't go unnoticed. CDP Climate gave us a notable B rating in recognition of the steps we've taken to measure and manage our risk and opportunities related to climate change. This acknowledgement endorses our efforts and pushes us to continue enhancing our sustainability initiatives. Our commitment to operating ethically and with integrity also gained us recognition in the equity markets. Just Capital, in their restaurant and leisure category of America's most just companies index, named us as a top five company. This recognition is a testament to our dedication to fair and equitable operation and the prioritization of our stakeholders' well-being. Also, we completed the purchase of 3 million carbon offsets invested in renewable energy products. These offices not only support our decarbonization journey, but invest in cleaner energy sources and local job creation in the communities where these projects are located. Finally, we were recently honored with being one of Forbes' Best Employers for Diversity in 2024. This award is a testament to our dedicated efforts in fostering an inclusive workforce where diverse backgrounds are represented, are represented, engaged, and empowered to generate and execute on innovative ideas. I want to express my gratitude to our entire team for their efforts in making our company a welcoming place for all of our talented team members. This recognition motivates us to continue creating a workplace where every individual feels valued and empowered. This progress underscores our unwavering commitment to environmental sustainability, ethical business practices, and the wellbeing of all of our stakeholders. These accomplishments serve as building blocks in our ongoing journey towards a more sustainable and responsible future. I couldn't be more proud of our entire team for all of these impressive accomplishments. With that, I'll turn it over to Mark to walk you through our financial results and outlook. Mr. Kempa.