Specialist
Former executive at MSC Cruises (USA) Inc
Agenda
- Phasing of recovery in 2021 by region, as well as bookings environment in 2022
- EBITDA margins in 2021 and post-coronavirus
- CAPEX requirements in 2021-23
- Ship valuations and consolidation expectations post-coronavirus
Questions
1.
When is a realistic reopening date for MSC’s ships and how does that differ by geography? We are hearing mixed messages from the company and the market.
2.
How many MSC ships could realistically run in the period up to Q4 2021 and then from Q4 onwards, based on demand?
3.
You referenced the CDC [Centers for Disease Control and Prevention] and regulations in the US. Could you elaborate on the expected regulatory outcomes?
4.
What has changed around capacity limits or broader regulations in Europe since our previous Interviews [see MSC Cruises – 2021 Recovery Scenarios – 12 February 2021; MSC Cruises – Ongoing Coronavirus Challenges – 21 October 2020]?
5.
How much pent-up demand is there for MSC’s offering in European regions where its ships are likely to operate first, so north Europe, UK and the Mediterranean?
6.
What does pent-up demand mean for occupancy? What occupancy do you expect on ships that restart in Q3 2021?
7.
What about the pricing environment? What are the ASPs for H2 2021?
8.
What are your pricing expectations for 2022?
9.
What is your best estimate for MSC’s top-line revenue in 2021 vs 2019, based on the occupancy and pricing trends we discussed?
10.
What is your outlook for MSC’s 2022 bookings? You mentioned that bookings usually start 12 months in advance, so you would hope that the company will soon start to receive bookings for summer 2022.
11.
When do you think cash will start flowing into MSC for its 2022 bookings?
12.
What are MSC’s opportunities to renegotiate contracts with travel agents in Europe around payment dynamics to take more cash at the deposit stage?
13.
What percentage of MSC’s bookings typically come through travel agents vs direct?
14.
You said the final payment is 45-60 days before the departure date. What change do you expect to that payment term in 2021? Will customers be willing to make the final payment ahead of a trip in 60 days’ time, given the uncertainty around whether it will run? What dynamics do you expect there?
15.
How much cash do you expect to flow into MSC for H2 2021 – so bookings in 2021 from summer onwards – given factors such as the relative share of new bookings vs re-bookings and low occupancy levels?
16.
Can you expand on your CAPEX assumptions? You mentioned that MSC was smart in managing the order backlog for the fleet build programme in 2020. What should we expect the company to do in 2021?
17.
You expect CAPEX to be less than or equal to 2020 levels, but how challenging is it to delay maintenance CAPEX – or any CAPEX that was cut in 2020 – to 2022?
18.
To what extent do you think CAPEX that has been cut will be permanent vs repaid in 2022 or 2023?
19.
How well-invested would you say MSC’s fleet is, given the CAPEX delays? What is the quality of the offer vs peers? How good are the ships?
20.
What market consolidation do you expect? What part could MSC play in acquiring ships during the downturn? You mentioned ship valuations in our previous discussions and highlighted the selling challenges.
