F-1/A: Viking Holdings Eyes NYSE Listing with 53 Million Share IPO

Viking Holdings Ltd is set to launch its initial public offering, offering 53 million ordinary shares with an anticipated price range of $21.00 to $25.00 per share.

Summary

• Viking Holdings Ltd is planning an initial public offering of 53 million ordinary shares.
• The offering includes 11 million shares from the company and 42 million from selling shareholders.
• The anticipated IPO price is between $21.00 and $25.00 per share.
• Viking has approved its ordinary shares for listing on the New York Stock Exchange (NYSE) under the symbol VIK.
• Norges Bank Investment Management has shown interest in purchasing up to $100 million in ordinary shares at the IPO price.
• The company will not receive any proceeds from the sale of shares by the selling shareholders.
• Viking has two classes of shares: ordinary shares (one vote per share) and special shares (10 votes per share).
• Post-IPO, the principal shareholder will hold approximately 86.9% of the voting power.
• Viking intends to rely on certain controlled company exemptions under NYSE corporate governance rules.
• The company generated $4.7 billion in total revenue and $1.1 billion in Adjusted EBITDA in 2023.
• Viking had $1.5 billion in cash and cash equivalents and $5.4 billion of Total Debt as of December 31, 2023.

Sentiment

Score: 7

Explanation: The document presents a mixed sentiment. While the company highlights its strong brand, growth, and market position, it also acknowledges significant debt and a recent net loss. The IPO is a positive step, but the risks associated with the business and industry temper the overall outlook.

Positives

• Viking has a strong brand reputation and has been rated #1 for Rivers, Oceans, and Expeditions by Cond Nast Traveler.
• The company has experienced rapid growth, with total revenue growing at a CAGR of 14.4% from 2015 to 2023.
• Viking has a loyal customer base, with a repeat guest percentage of 51% for the 2023 season.
• The company has a young and fuel-efficient fleet, designed to meet future environmental regulations.
• Viking has a seasoned and proven management team committed to long-term shareholder value.
• The company has industry-leading early booking rates, creating strong revenue visibility.
• The company has a data-driven marketing platform that drives demand and significant direct bookings.
• The company has a fuel-efficient fleet designed to meet future environmental regulations.

Negatives

• The company had a net loss of $1.9 billion for the year ended December 31, 2023.
• The company has a high level of indebtedness, with $5.4 billion of Total Debt as of December 31, 2023.
• The company is a controlled company, which may limit shareholder influence on key matters.
• The company is exposed to various risks, including economic and political instability, adverse weather conditions, and disease outbreaks.

Risks

• Changes in the general worldwide economic and political environment could reduce the demand for cruises.
• Adverse weather conditions or other natural disasters, including high or low river water levels, may require us to alter our itineraries or cancel existing cruises.
• Adverse incidents involving cruise ships may adversely affect our business, financial condition and results of operations.
• Disease outbreaks or pandemics have had, and in the future could have, a significant impact on the travel industry generally and on our business and results of operations.
• The threat of terrorist attacks, wars, acts of piracy and other events affecting the safety and security of travel can reduce the demand for cruises or require us to cancel existing bookings.
• Changes in fuel prices would affect the cost of our cruise ship operations and our hedging strategies may not protect us from increased costs related to fuel prices.
• Increased labor costs or our inability to recruit or retain employees may adversely affect our business, financial condition and results of operations.
• Increases in inflation could adversely affect our business, financial condition and results of operations.
• Fluctuations in foreign currency exchange rates could affect our financial results.
• An increase in cruise capacity without a corresponding increase in demand and infrastructure could adversely affect our business, financial condition and results of operations.
• Our success is substantially dependent on the continued service of our senior management.
• Our expansion into new products may be unsuccessful.
• Conducting business internationally may result in increased costs and risks.
• If we experience delays in ship construction or ship repairs, maintenance or refurbishments or changes in costs, our business, financial condition and results of operations could be adversely affected.
• Lack of continuing availability of attractive, convenient and safe port destinations could adversely affect our business, financial condition and results of operations.
• We rely on travel agencies to generate a material portion of our sales.
• Reductions in the availability of and increases in the prices for the services and products provided by our vendors could adversely affect our business and revenues.
• We rely on scheduled commercial airline services to transport our guests to or from the cities where our cruises embark and disembark.
• Credit card processing terms and requirements, adverse changes in guest payment policies, and consumer protection legislation or regulations could negatively affect our financial condition.
• The Viking name and brand are integral to the success of our business.
• Breaches in data security or other disturbances to our information technology systems and networks and operations could adversely affect our business, financial condition and results of operations.
• We are highly leveraged. We have substantial indebtedness and we may not be able to generate sufficient cash to service all of our indebtedness or to obtain additional financing if necessary.
• We are subject to complex laws and regulations, including environmental laws and regulations.
• Amendments to existing tax laws, rules or regulations or enactment of new unfavorable tax laws, rules or regulations could have an adverse effect on our business and financial performance.

Future Outlook

The company has ordered 24 new ships for delivery through 2028 and is exploring new markets and products for future growth.

Management Comments

• We view going public as a natural move to further solidify our position as a great company.
• We will continue to obsess over our guests.
• We will continue to treat all Viking employees as part of a family.
• We will continue to be contrarian.
• We will continue to do what is right when it comes to the environment.

Industry Context

Viking is positioning itself as the only pure-play luxury public cruise line, targeting an underserved demographic of affluent travelers aged 55 and over. The company is expanding its fleet to capitalize on the growing demand for luxury travel experiences.

Comparison to Industry Standards

• Viking's total revenue per passenger was $7,251 for the year ended December 31, 2023.
• Viking's North American outbound river market share was 51%, its luxury ocean market share was 26%, its Antarctic expedition market share was 12% and its Mississippi river market share was 20% for the 2023 season.
• Viking River has more than four times the total brand awareness of our nearest competitor in the North American outbound river market, and nearly two times the total brand awareness of our nearest competitor in the Mississippi river market.
• Viking's total brand awareness for ocean cruises is comparable to the large public cruise lines.
• Viking's contracted capacity represents approximately 42% of new comparable supply in the luxury ocean market.
• Viking's average age for our fleet available for operations was 6.5 years, which is younger than the average age for the large public cruise lines.

Related Party Transactions

• The company provides certain finance, accounting and management services to our principal shareholder and its affiliates.
• In 2020, we entered into the China JV Investment with a subsidiary of China Merchants Group to build a cruise line servicing the Mandarin-speaking populations in China.

Stakeholder Impact

• Shareholders: The IPO will provide increased financial flexibility and create a public market for the company's shares.
• Employees: The company is committed to providing training, skills, and resources for its employees to excel.
• Customers: The company aims to continue providing high-quality travel experiences and cultural enrichment.
• Suppliers: The company relies on various suppliers for essential services and products.
• Creditors: The company has substantial indebtedness and is subject to covenants and restrictions in its debt agreements.

Next Steps

• The company will proceed with the IPO process, including pricing and allocation of shares.
• The company will list its ordinary shares on the NYSE under the symbol VIK.
• The company will use a portion of the net proceeds from this offering to satisfy tax withholding and remittance obligations related to the RSU Net Settlement.
• The company will use the remaining net proceeds from this offering for general corporate purposes, including working capital, operating expenses and capital expenditures.
• The company will enter into a $375 million secured revolving credit facility.

Key Dates

Keywords

IPO, cruise line, Viking Holdings, luxury travel, river cruises, ocean cruises, expedition cruises, travel industry, financial performance