Viking Holdings Ltd

Good morning. My name is Paul, and I will be your conference operator today. At this time, I would like to welcome everyone to Viking's fourth quarter and full year 2024 earnings conference call. As a reminder, this call is being recorded. All lines have been placed on mute to prevent any background noise. After the speaker's remarks, there will be a question and answer session. If you would like to ask a question at that time, please press star 1 on your telephone keypad. If you wish to remove yourself from the queue, please press star 2. Thank you. I would now like to turn the program to your host for today's conference, Vice President of Investor Relations, Carola Mangolini.

Good morning, everyone, and welcome to Vikings' fourth quarter and full year 2024 earnings conference call. I am joined by Tor Hagen, Chairman and Chief Executive Officer, and Leah Talaktak, President and Chief Financial Officer. Also available during the Q&A session is Lynn Vaughan, Executive Vice President of Finance. Before we get started, please note our cautionary statement regarding forward-looking information. During the call, management may discuss information that is forward-looking and involves known and unknown risks uncertainties, and other factors, which may cause the actual results to be different than those expressed or implied. Please evaluate the forward-looking information in the context of these factors, which are detailed in today's press release as well as in our filings with the SEC. The forward-looking statements are as of today and we assume no obligation to update or supplement these statements. We may also refer to certain non- IFRS financial metrics, which are reconciled and described in our press release, posted on our investor relations website at irviking.com. Tora and Leah will provide a strategic overview of the company, a recap of our fourth quarter and full year results, and an update of the current booking environment. We will then open the call for your questions. To supplement today's call, we have prepared an earnings presentation that is also available on our investor relations website. With that, I'm pleased to turn the call over to Tor.

Thank you, Corolla. Good morning, everyone, and thank you for joining us today. In our previous earnings calls, we have shared that Viking has certain unique points of differentiation which have been behind our success. You can see these on slide three. Our 2024 performance was quite remarkable, and I believe that reflects what makes us different. The focus on our core guest demographic, the power of our one Viking brand, the value of our well-defined product, and the efficiency and appeal of our fleet. While it is not in the Viking spirit to be boastful, I do think that we have much to be proud of, and I will highlight a few metrics of this great year. As you can see on slide four, our results were driven by 6.3% growth in capacity and a very healthy demand from our customers, which was reflected in a net yield increase of 7.4%. This led to a 14% year-over-year increase in our adjusted gross margin to more than $3.5 billion. This strong top-line result, coupled with our disciplined approach to expenses and focus on operational efficiency, enabled us to achieve an adjusted EBITDA of $1.3 billion, up 23.7% from the year before. We also managed our balance sheet well, ending the year with a 40.8% return on investment capital and a net leverage of 2.4 times. We also finished the year with record guest satisfaction scores and great operational metrics. On slide five, we are highlighting a repeat guest rate of 53%, our direct bookings being north of 50%, and our leading market share position, 52% for rivers and 24% for our ocean segment. We take great pride in these results, as they demonstrate our ability to grow our capacity while we at the same time improve margins and continue to deliver an exceptional product. Moreover, during 2024, we also accomplished other important milestones. If we look at the next slide, number six, on May 1, we became a publicly traded company on the New York Stock Exchange. This was a historic moment, which I consider a natural step to solidify our position as a leader in the travel industry. To cap this achievement, we received the 2024 North America IPO of the Year Award from the International Financing Review magazine. Overall, I believe that our successful IPO is a testament to the strength of our business model and our great execution. The IPO award was the latest in a series of accolades we received during 2024. We were also ranked number one by Conde Nast Traveler across the rivers, oceans, and expeditions for the second consecutive year. And we were recognized as the world best by Travel and Leisure. Our commitment to providing a great customer experience continues to be recognized year after year which is a rare feat for a travel company. We're genuinely proud of these achievements. In 2024, we also celebrate the historic return to China, offering our English-speaking guests itineraries along the Chinese coast. We really enjoy welcoming people to this phenomenal part of the world. And we also made some scientific discoveries this year. One of the most noteworthy occurred in Antarctica. Our team on the Viking Octantis discovered a new colony of penguins not previously known to science. This, I dare say, makes us real explorers. With that, I will turn to Leah to discuss our financials. But before I do, I want to congratulate her on the appointment as president. Leah, thank you very much for your dedication to Viking over the past 20 years. and for your leadership as we embark on this next chapter.