Carnival Corporation has unveiled its SEA Change Program, a comprehensive three-year plan that encompasses financial and sustainability targets. The programme sets forth a roadmap for achieving key strategic goals by the end of 2026.
Under the SEA Change Program, Carnival Corporation aims to make significant strides in sustainability. The company plans to reduce carbon intensity by more than 20% compared to 2019 levels, surpassing its previously stated 2030 goal.
In addition to sustainability, the SEA Change Program focuses on financial performance. Carnival Corporation sets a target of achieving a 50% increase in adjusted EBITDA (earnings before interest, taxes, depreciation, and amortisation) per ALBD (available lower berth day) compared to the guidance provided in June 2023. This would represent the highest level in nearly two decades.
The programme also outlines a goal of achieving a 12% adjusted Return on Invested Capital (ROIC) by 2026, more than doubling the ROIC from 2023. Carnival Corporation intends to compare its adjusted ROIC against historical performance, excluding goodwill and intangibles.
To accomplish these targets, the company plans to maintain measured net capacity growth of less than 2.5% annually from 2023. This approach allows Carnival Corporation to focus on initiatives that drive net yield growth, optimise cost structures, and improve fuel efficiency. The company believes that these efforts will result in improved margins and growth in adjusted free cash flow, enabling it to gradually reduce debt over time.
Josh Weinstein, CEO of Carnival Corporation, expressed enthusiasm for the SEA Change Program, stating that it sets a course for strong profitability and investment-grade leverage metrics. He highlighted the company's momentum in meeting demand and its commitment to creating value for shareholders as they work towards the 2026 targets.
The programme's name, SEA, encapsulates its core pillars: sustainability, EBITDA per ALBD, and adjusted ROIC. Weinstein indicated that the significance of these measures will be the best seen in nearly two decades. He highlighted Carnival's goal of reducing carbon intensity by more than 20% compared to 2019 levels, achieving their 2030 decarbonisation target four years ahead of schedule.
Weinstein also talked about the company's already superior fuel efficiency and their target of a 50% increase in adjusted EBITDA per ALBD, which represents a 25% improvement over 2019 levels when adjusted for fuel price and currency.
While Carnival Corporation acknowledges that the SEA Change Program’s targets are ambitious, the company views them as measurable milestones on the path to ongoing progress and growth.