MARKET GOING? CDU Conference (19 September 2013) PETER LITTLE VICE - - PowerPoint PPT Presentation

WHERE IS THE DOMESTIC CRUISING MARKET GOING?

CDU Conference (19 September 2013)

PETER LITTLE – VICE PRESIDENT FLEET OPERATIONS

• A 22 year veteran with the organization
• Held various technical positions onboard up to Chief Engineer
• Moved from ship to shore in 2003 covering roles in

Compliance, Assurance and Operations

• Joined the Carnival Australia leadership team in 2008 heading

up the Fleet Operations division

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GREAT DOMESTIC POTENTIAL

DYNAMICS OF A SUCCESSFUL MARKET

• Australia’s economic performance = strong consumer

balance sheet

• Conditions have remained robust over the past 5

years

• Unemployment approx 5.5% for last 3 years
• Interest rates slowly declining
• A$ retreated slightly

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DYNAMICS OF A SUCCESSFUL MARKET

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Infrastructure Fuel Costs Port Fees

UNPRECEDENTED CAPACITY GROWTH

• Market size has almost doubled in 4 years

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Source: 2011 ICCA Annual Cruise Market Report & internal estimates 1 2 3 4 5 6 7 8 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014

ALBD (Millions)

Australia & New Zealand Home Port Deployed Capacity ALB

P&O Cruises Princess Carnival Holland America Costa Cunard Royal Caribbean Celebrity Other

YoY (%) Growth 21 6 15 77 28 4 17 23 22 2

PASSENGER NUMBERS FORECAST TO EXCEED 700K BY END OF 2013: AN INCREASE OF +200% SINCE 2008

125 116 122 140 160 207 255 329 456 498 31 42 64 82 91 97 86 109 133 160

+1% +18% +18% +14% +21% +12% +28% +34% +12%

100 200 300 400 500 600 700 800 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012

Australian Passenger Cruise Growth 2003-12

Fly-Cruise Homeport

• Passenger numbers grew to 660k in 2012, a two fold increase since 2008 and

expected to reach +1 million by 2016

• The economic contribution of the cruise sector was A$830m in 2010-11 and

expected to grow to over A$3.2b by 2020 NOTE 1

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200% increase in pax numbers since 2008 Source: ICCA Annual Market Report 2012 (excludes river cruising passenger numbers) NOTE 1: Deloitte Access Economic Report March 2012

MARKET PENETRATION RATES APPROACHING US LEVELS: DOUBLING IN UNDER 5 YEARS

0.5% 1.5% 2.5% 3.5% 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 Penetration Rate Germany United Kingdom USA Australia & New Zealand

• Penetration rate at 2.8% in 2012 and forecast to reach 2.9% in 2013
• Australia second most penetrated market globally remaining ahead of Germany and

now surpassing the UK

Source: PSA and CLIA Australia annual reports & internal estimates

COASTAL POPULATION WITH EASY ACCESS TO HOMEPORTS: POTENTIAL FOR THE PENETRATION RATE TO GROW WELL BEYOND THE US

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4.5m (17%)

3.3%

7.3m (27%)

4.1%

5.6m (21%)

2.0%

0.5m (2%)

2.0%

1.6m (6%)

2.1%

2.3m (9%)

2.6%

0.2m (1%)

0.9%

4.4m (15%)

1.1%

Australia/New Zealand population Brisbane Auckland Homeports Sydney Melbourne Fremantle 2012 penetration by State

Source: ABS & CLIA 2012 annual report

HOME PORTED SHIPS REGIONAL CALLS

P&O Cruises Princess Carnival HAL

Pacific Jewel Pacific Dawn Pacific Pearl Sun Princess Dawn Princess Sea Princess Spirit Legend Oosterdam Volendam Diamond Princess

^Seasonal deployment from Oct-14

Queen Mary 2 Queen Victoria Queen Elizabeth

Cunard Princess

Ocean Princess Pacific Princess

HAL

Amsterdam

Costa P&O Cruises UK Seabourn

Soujourn Odessey Aurora Arcadia Costa Deliziosa Cost Neo Romantica

CRUISE BRANDS SHORTENING ITINERARIES: HOLIDAY TRENDS SUGGEST MORE FREQUENT SHORTER TRIPS AND FEWER LARGER HOLIDAYS

5 7 9 11 13 15 17 19 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 Average Duration Financial Year

Average Cruise Duration Over Time

Carnival P&O Cruises Princess

18 domestic sailings in

2010 rising to 39 in 2014

Annual average

growth

rate of 22%

• ver the

past 5 years

THE GROWTH OF P&O’S DOMESTIC CRUISING MARKET

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Only cruise line with one-stop short cruises Food & wine, comedy and lifestyle themed cruises 2-5 night cruises Meet Luke Mangan Over 30 cruises

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Only Australian Open Tennis cruises 3 ships in Sydney Harbour for Australia Day 2014 Still the best way to experience the Melbourne Cup Christmas cruises Mothers Day cruises New Year cruises

MORETON ISLAND

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Visit Kangaroo islands, Australia’s Galapagos Cruise from every Australian mainland state 18 cruises on 5 unique itineraries

EDEN – A REGIONAL OPPORTUNITY

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Australia Day cruises NZ Natural ice cream

• nboard

Kids stop-motion film classes Moreton island

• ne-stop short cruise

Celebrity chef restaurant Salt grill by Luke Mangan Live NRL & AFL

• n the Big Screen

Dedicated Papua New Guinea cruises F1 and V8 car simulators

• nboard

Australian Open Tennis cruises

FUEL PRICE ON UPWARD TREND AGAIN

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400.00 500.00 600.00 700.00 800.00 900.00 1,000.00 May June July Aug Sept Oct Nov Dec Jan Feb Mar Apr May June July Aug Sept Oct Nov Dec Jan Feb Mar Apr May June July Aug Sept Oct Nov Dec Jan Feb Mar Apr May June July Aug 2010 2011 2012 2013 US$ Fuel Price per MT Sydney Singapore Source: Sydney prices from CAU actual lifting’s Singapore prices from Corporate forecast

CRUISING HUBS KEY TO SHORT CRUISE SUCCESS

P&OSEAASIA

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12 nt cruises rndtrip Fremantle to Indonesia 12-16 night cruises visiting up to 5 countries in one holiday

AUSTRALIA VS ASIA

Australia Day cruises

CRUISE V CONTAINER

THANK YOU