NCLH unveils ‘Charting the Course’ strategy and updated 2026 financial targets

2024-05-28T20:39:42+00:00 May 28th, 2024|Finance|

Norwegian Cruise Line Holdings (NCLH) recent Investor Day held at the New York Stock Exchange discussed the new comprehensive ’Charting the Course’ strategy.

This included a refreshed vision; strategic initiatives centred around four pillars encompassing people, product, growth platform and performance; and three-year financial and sustainability targets geared at enhancing shareholder returns.

In conjunction with the new strategy announcement, the Company also raised its guidance for full year 2024 across several metrics.

NCLH’s ‘Charting the Course’ starts with the vision to ‘Vacation Better. Experience More.’ This aims inspire team members, both shipboard and shoreside, to deliver on this vision to the nearly 3 mill guests that sail on NCLH’s brands each year.

This new vision is backed by strategic initiatives under the four pillars—People Excellence, Guest-centric Product, Long-term Growth Platform and Exceptional Performance.

These aim to transform the company’s culture, target investments towards offerings that guests value, capitalise on high growth opportunities, and drive the company’s financial performance through operational excellence, all underpinned by its ‘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, NCLH’s President and CEO (pictured).

“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’ programme,” he said.

These initiatives  are also aimed at driving performance to achieve its ‘Charting the Course’ financial and sustainability targets, by the end of 2026:

  • Adjusted operational EBITDA margin of around 39%, approaching historical levels.
  • Adjusted EPS of about $2.45, representing a two-year CAGR from 2024 to 2026 of over 30%.
  • A reduction of net leverage to the mid-four turn levels, continuing its commitment to strengthening its balance sheet.
  • Record adjusted ROIC of 12%, exceeding pre-2020 levels.
  • Renewing its commitment to a 10% greenhouse gas intensity reduction from 2019 baseline levels.

Based on current strong demand and an improved outlook for the year, NCLH has increased its full year 2024 guidance, raising expectations for net yield growth from 6.4% to 7.2%, increasing adjusted EBITDA from $2.25 bill to $2.30 bill and raising its adjusted EPS 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,” added Mark Kempa, NCLH’s CFO.