Carnival Plc Q4 FY2024 earnings call

• Strong finish to 2024 with seventh consecutive quarter of record revenues, net income improved by over $250M YOY, full-year revenues at all-time high of $25B, cash from operations almost $6B. - New ships in 2024 but most yield growth from existing ships. - Strong booking trends for 2025 and 2026, North American and European segments at record advanced booking windows. - Marketing campaigns across brands, including new creatives for Princess, Cunard, etc. - Destination strategy with Celebration Key opening in 2025 and enhancements to Half Moon Key. - Sustainability progress with ~17.5% reduction in greenhouse gas emissions intensity vs 2019. - Debt reduction, paying down over $8B of debt since 2023 peak, improving leverage metrics.

No detailed breakdown of product segments by revenue contribution provided in the transcript.

• 2025 yield growth expected over 4%, net income guidance over $2.3B, an improvement of over $400M vs 2024. - Cruise costs without fuel per ALBD expected up ~3.7% for 2025. - 2025 EBITDA per ALBD expected to achieve SeaChange target early, ROIC near 2026 target of 12%. - Celebration Key to impact costs by ~half a point, dry dock days increase to 687 in 2025, impacting costs by ~three-quarters of a point.

• Uncertainty around Mexico passenger charges, not factored in 2025 guidance. - Variability in cost efficiencies and inflation impacts on cruise costs. - Potential impact of Red Sea disruptions on 2025 comps, with 2025 not seeing a huge springback from 2024's Red Sea issues.

Q: Could you elaborate on the foundation that's positioned the company to capitalize on current demand and initiatives for 2025 and beyond?

A: Restructuring, right leaders in place, commercial focus on revenue management, marketing, portfolio management; continuation of commercial efforts, investment in people and tools, destination strategy, onboard spending progress.

Q: Break down net cruise cost ex-fuel components and yield vs cruise cost multiyear?

A: 3.7% cruise cost ex-fuel includes Celebration Key impact, dry dock days increase, one-time items in 2024, inflation, higher advertising; yield improvement has leverage over cost improvement as a point of yield is worth almost double a point of cost.

Q: Awareness of Celebration Key product?

A: Still ramping, bookings shaping up well but early days, will take off once operating and guests enjoy experiences.

Q: Enhanced destination strategy?

A: Turning own destinations into appealing experiences to tilt vacation decisions to cruise, Celebration Key and Relax Away Half Moon Key examples, raising awareness of exclusive destinations.

Q: Yield guidance for 2025, makeup and conservatism?

A: Guidance based on what's known, 4% yield includes price and some occupancy, goal to meet and exceed, more stable than last year with strong onboard spends.

Q: SeaChange targets, long-range financial targets?

A: EBITDA per ALBD expected in 2025, ROIC near 2026 target, longer-term targets to be laid out when appropriate.

Q: Celebration Key impact on yield and EPS guidance on debt?

A: Celebration Key 2025 sailings at 5% of total, potential interest savings from debt refinancings but not factored fully in guidance.

Q: Organic turnaround, sustainability?

A: Industry mainstreaming helps, same ship yields strong, price to experience ratio skewed in favor of cruise, self-help efforts contributing to organic growth.

Q: Mexico passenger charges, impact on itineraries?

A: Not a done deal, engaged in conversations, no impact factored in 2025 guidance, less than 5% of 2025 itineraries affected if tax goes into place.

Q: Cost side variability, leverage target?

A: Cost variability from efficiency timing and inflation, leverage target is investment-grade metrics (3.5 times net debt to EBITDA), not targeting two-time leverage ratio.

Q: Wave season, booking curve, Red Sea impact?

A: Brands optimizing booking curve, Red Sea impact in 2025 not a huge springback as 2024 had world cruises affected, 2026 vs 2025 will be apples-to-apples.