Fincantieri S.p.A. · MIL:FCT
Fincantieri — Q1 2023 Earnings Presentation
68 slides from Fincantieri's earnings presentation, May 10, 2023
Slide 1: 1Q 2023 Results & 2023-2027 Strategic Plan
1Q°20 esults & 2023-2027 Strategic Plan May 10, 2023 FINCANTIERI www. fincantieri.com
Slide 2: Speakers
1Q 2023 Results & 2023-2027 Strategic Plan FINCANTIER! Speakers Pierroberto Folgiero Claudio Cisilino Bent Erik Nedrevold Giuseppe Dado Chief Executive Officer Executive VP Operations, Project Manager VARD Electro Chief Financial Officer Corporate Strategy and Innovation
Slide 3: Agenda
Slide 4: 1Q 2023 Financial & Operating Highlights
Highlights FINCANTIERI 1Q 2023 Financial & Operating Highlights Order Net Financial (€ mtn) ae mln Revenues EBITDA Intake P 909 2,922 1,764 Pt 2,531 CT 1.881 118 513 —| 87 —— Qi 2022 Qi 2023 Qi 2022 Qi 2023 Qi 2022 Qi 2023 Fy 2022 Qi 2023 e Revenues at € 1,764 mln, up by 4.9%, in line with expectati
Slide 5: Agenda
Slide 6: • • • • • • • • • • • • • •
• • • • • • • • • • • • • • • • • • • • • • • • 6
Slide 7: 1Q 2023 Order Intake & Total Backlog
Financials FINCANTIER! 1Q 2023 Order Intake & Total Backlog Order Intake breakdown by segments Total backlog breakdown by segment? (€ min) ( mln) 0.3x 0.5x 33,987 909 <—- 1,148 1,344 —— 518 Backlog Backlog 24,798 | eee 22,687 19,248 252 125 (36) Cia) (384) (416) Qi 2022 Qi 2023 Qi 2022 Qi 2023 CBook
Slide 8: 1Q 2023 Revenues & EBITDA
Financials 1Q 2023 Revenues & EBITDA Revenues breakdown by segmentt EBITDA breakdown by segment ( mln) 118 Bez: re) 8.3% (€ min) +4. 9% 1,764 1,681 ei - Sayin Shipbuilding 4,429 1,427 (432) (168) Qi 2022 Qi 2023 % of Total revenues 11.3% 13.7% 10.1% » 412.4% 51.1% 48.6% 27.6% 25.4% 1. Breakdown calc
Slide 9: 1Q 2023 Net Financial Position & Net Working Capital
Financials FINCANTIER! 1Q 2023 Net Financial Position & Net Working Capital Net Working Capital breakdown by component Net Financial Position? (€ mtn) (© min) + Net financial position at € 2,922 min, in line with production 864 schedule for the quarter 4,669 * Two cruise ships already delivered in A
Slide 10: Agenda
10 2023 Results & 2023-2027 Strategic Plan Agenda 1. 1Q 2023 Results Highlights Financials 027 St d Strategi f - Pierroberto Folgiero Stre oyment 7 Claudio Cisilino Case afi a ik Nedrevold ials and 4 : = eppe Dado uding Rema 7 ie olgiero
Slide 11: Italian Group with global footprint
FINCANTIER! Markets and Strategic Pillars @ Shipyards Italian Group with global footprint Leading player in shipbuilding with a E strong competitive positioning thanks to \ i technology, innovation and best-in-class 5% s is Romania execution * Growth led by organic diversification, global production
Slide 12: Leading shipbuilders with a comprehensive service proposition
Markets and Strategic Pillars FINCANTIER! We are leading shipbuilders with a vision to provide a comprehensive service proposition of the life-cycle of green and digital ships Shipbuilding Infrastructure Cruise Defence Offshore >40% global market share Diversified client base and complete segment co
Slide 13: Leading global positions across all business segments
Markets and Strategic Pillars FINCANTIERI Leading global positions across all business segments Underpinned by total backlog at € 34 bn, including soft backlog of € 11.3 bn in Q1 2023 een Offshore & Shipbuildin Pr P e Specialized Vessels * Offshore Wind Electronics, systems & Cruise Marine Interiors
Slide 14: Fincantieri has unique competitive strengths
Markets and Strategic Pillars FINCANTIER! Fincantieri has unique competitive strengths to meet customer needs Consolidated leadership, flexible global production network and vertical integration * Scale and cross-fertilization of competencies * Capability to address geopolitical demand enabling the
Slide 15: Ready to exploit opportunities driven by market macro-trends
Markets and Strategic Pillars FINCANTIER! Ready to exploit opportunities driven by market macro-trends Current business outlook underpins potential to accelerate growth and global market share Cruise market rebounding Military market in a Offshore market driven by Growth and volatility in Sector wit
Slide 16: Cruise: passenger rate to grow ~6% annually until 2030
Markets and Strategic Pillars FINCANTIER! Cruise: passenger rate to grow ~ 6% annually until 2030, with new ships needed from 2023 - 2024 Cruise Market Passengers 50 a] = With a substantial resumption in cruise activities, cruise passengers in 2022 o - ae amounted to 20 million! - ’ ! + 38 mln passe
Slide 17: Defence: foreign accessible markets opportunities
Markets and Strategic Pillars FINCANTIER! Defence: foreign accessible markets opportunities ey for € 20 bn in 2023 - 2027 Global defence budget * Geopolitical context and foreign policy impact industrial defense sector Programs 2023-2027 and demand for larger fleets with more advanced technological
Slide 18: Naval: supporting the Italian Navy fleet renewal
Markets and Strategic Pillars FINCANTIERL Naval: supporting the Italian Navy fleet ay renewal and expansion Italian Navy + Fincantieri is the strategic partner of the Italian Navy with more than 50 deliveries since 1990 and the reference player for the design and construction of naval vessels, inclu
Slide 19: Offshore & Specialized Vessels: expansion in offshore wind
Markets and Strategic Pillars FINCANTIER! Offshore & Specialized Vessels: expansion in offshore wind with significant attention to renewable energies Wind Offshore Offshore wind: total capacity by 2030 * Offshore wind farms: total installed capacity expected to rise from 59.2 GW to c. 269 183.0 269.
Slide 20: Future vessel requirements in 2030-2040-2050
Markets and Strategic Pillars FINCANTIER! Future vessel requirements in 2030-2040-2050 Customer needs undergoing a complete transformation for a full service proposition Sensor & data analytics All vessel equipment will be monitored, optimized & maintained through sensor data collection & analysis G
Slide 21: Capitalizing upon additional competitive advantages
Markets and Strategic Pillars FINCANTIER! Capitalizing upon additional competitive advantages With an ambition to create long term customer value as a life cycle partner Focused on increasing efficiency and productivity Distinctiveness is the name of the game * Global industrial excellence across th
Slide 22: New strategy deployed in 5 pillars
Markets and Strategic Pillars FINCANTIER! Our new strategy deployed in a set of key projects aggregated in 5 pillars Aimed at strengthening existing global leadership and preparing the Group for extending its leadership in the long term Focus on Core Business Review product portfolio, maximize effic
Slide 23: Focused on core business: Cruise, Naval and Offshore
Markets and Strategic Pillars FINCANTIER! Focused on core business: Cruise, Naval and Offshore Actions Group Revenues EBITDA Margins Maintain leadership in cruise Execute backlog Strengthen commercial effort on refitting business Strong commercial push, capturing domestic and foreign markets Enhance
Slide 24: Cross-fertilization of expertise across core business
Markets and Strategic Pillars FINCANTIERI Cross-fertilization of expertise, top-notch competences and best-practices throughout the core business, accelerated by green and digital transition. va / 4 Green Cruise Naval Offshore Digital Defining clear targets to reach net-zero emissions by 2035, inclu
Slide 25: Repositioning of ESS unit
Markets and Strategic Pillars FINCANTIER! Supported by repositioning of ESS unit to support green and digital journey ESS reorganised as enabler for comprehensive life-cycle service offering Electrical, electronic and digital services Area of Activities Group Companies Delivering Marine systems and
Slide 26: Technological leadership in electronic and digital systems
Markets and Strategic Pillars Technological leadership in complex electronic and digital systems to enhance Fincantieri offering FINCANTIER! Platform Automation & Integration Cybersecurity Maritime Platform system automation and optimized integration with key mission support and combat subsystems Fo
Slide 27: ESG & Sustainability integrated in the Strategic Plan
Markets and Strategic Pillars FINCANTIER! ESG & Sustainability fully integrated in the Strategic Plan 2023-2027 Group Sustainability Plan based on 3 pillars and 15 material topics T 4 > > < ¢ ’ Innovation Inclusion Integrity Innovative and technological development Protection, inclusion and developm
Slide 28: Refocus and de-risk the Infrastructure business unit
Markets and Strategic Pillars FINCANTIER! Decisive actions to refocus and de-risk the Infrastructure business unit Fully committed to reduce riskiness and restore profitability to foster strategic optionality + Structural steel components iviti * Maritime works Infrastructure Activities + Technical
Slide 29: Revenues growth driven by naval and offshore
Markets and Strategic Pillars Revenues at c. € 10 bn in 2027, mainly driven by growth in naval and offshore Higher margins leading to net profit from 2025 and significant deleveraging FINCANTIER! FY 2019! FY 2022 FY 2023 FY 2024 FY 2025 FY 2027 Revenues 5.8 bn 74 bn ~7.6 bn ~8.0 bn ~8.8 bn ~9.8 bn E
Slide 30: Pierroberto Folgiero
Pierroberto Folgiero
Slide 31: Strategy Deployment: strategic pillars to support delivery
Strategy Deployment 5 strategic pillars to support delivery of 2023-2027 targets Positioning Fincantieri for long term opportunities FINCANTIER! Successfully delivering 2023-2027 Targets Focus on Core Business Financial Discipline Xie KA coo Industrial Sustainability Life-Cycle Management System Int
Slide 32: Strategic projects underpinning the 5 strategic pillars
Strategy Deployment FINCANTIER! 10 strategic projects underpinning the 5 strategic pillars 10 Working Teams fully committed to successfully reaching milestones and targets Successfully delivering 2023-2027 targets © % ae a eg Laying the foundation for the next industrial cycle Targets Focus on Core
Slide 33: Pillar Initiatives: Focus on Core Business
Strategy Deployment Pillar 1 Initiatives Key Initiatives FINCANTIER! 1. Operations Excellence Speeding up new technologies adoption and maximize efficiency to bolster productivity: + Industrial efficiency through automation of low value-added activities * Digitalization of shipyards adopting of stat
Slide 34: Digitalization of Shipyards: the Shipyard of the Future
Strategy Deployment FINCANTIER! Pillar 1 - Digitalization of Shipyards: the Shipyard of the Future © 4 l> “¥ ~~ ae 77s 6 2.Design — 3.Digital Manufacturing e kod 4.Hull O Digitalized Detail Design with full Control tower for digitally aided 0 y High efficiency, high quality and E2E integration from
Slide 35: Digitalization of Shipyards is a key priority
Strategy Deployment FINCANTIER! Pillar 1 - Digitalization of Shipyards is a key priority © Example of ongoing initiatives to improve productivity and efficiency Initiative: Initiative: Initiative: Cooperative Welding robot Hololens Unmanned vehicles Welding robot vehicle consisting of an Augmented r
Slide 36: Pillar Key Initiatives: Financial Discipline
FINCANTIER! Pillar 2 — . Key Initiatives oI Turning every stone to mitigate risks via close attention to costs management and optimization of Cash Flows Strategy Deployment * Optimize purchasing expenditure, secure supply chain and reduce risks + Sharing of best practices on should cost and design t
Slide 37: Pillar Key Initiatives: Industrial Sustainability
Strategy Deployment FINCANTIER! Pillar 3 — Key Initiatives Ma + Defining a clear roadmap of product development in order to achieve the net-zero emissions target in all business segments: + Enable and integrate onboard new technologies and new fuels 7. Green transitioning towards net-zero + Implemen
Slide 38: Road Map to Net Zero for a large cruise vessel
Strategy Deployment FINCANTIER! Pillar 3 — Road Map to Net Zero for a large cruise vessel nos OT ‘ a loos Fe 2030 MM 70.35 First Local First LNG Minimal . First LNG High zero emissions vessel zero emissions in Net zero with Milestone High efficiency vessel with efficievey LNG small vessel emissions
Slide 39: Fincantieri pioneering on industrial sustainability
Strategy Deployment FINCANTIER! Pillar 3 — Fincantieri pioneering on industrial sustainability ‘is Discussions with leading cruise operators are ongoing with significant progress and agreement on the way forward Le Commandant Charcot Viking Neptune Prima Plus Class Ponant Viking Ocean Cruises Norweg
Slide 40: Key technologies needed and identified
Strategy Deployment Pillar 3 — Key technologies needed and identified FINCANTIER! Xe Net-Zero achievement needs internal and external technologies which have been identified and are available & ts Cruse Noval Ofshae Internal Technologies Make Buy External Technologies Thruster shutter 1 10 Internal
Slide 41: Key ESG Targets
Strategy Deployment Pillar 3 — Key ESG Targets FINCANTIER! De Top Managers variable compensation linked to ESG KPIs and ESG ratings Target 2023-2027 Objectives Innovative and \> bea technological development for energy and digital transition Industrial excellence Protection, inclusion and developmen
Slide 42: Pursuing a new business model
Strategy Deployment Pillar 4 - Pursuing a new business model Long term opportunity by transitioning from Capex to Opex, with a full service offering that maximizes operating efficiency throughout the lifecycle of the ship FINCANTIER! wn = a 9. Cruise digital offering + Pushing the boundaries of data
Slide 43: Already developed capabilities within our ecosystem
Strategy Deployment FINCANTIER! Pillar 4 — Already developed capabilities within our ecosystem no Possible cross-fertilization between different businesses Automation / YARD (eet 7 ON \ VARD Data Science FINCANTIER! } sean Data Platform FINCANTIER! , (@CETENA Application 7 Fincantieri pplication 7 s
Slide 44: A new digital service business positioning for Navies
Strategy Deployment Pillar 4 — A new digital service business positioning for Navies FINCANTIER! Xie Offering an integrated fleet digital support solution with a complete service proposition throughout the ship’s life cycle Digitally-enabled Digital asset management mn Training & Simulation Cybersec
Slide 45: Naval integration capabilities to be enhanced
Strategy Deployment FINCANTIER! Pillar 5 — Naval integration capabilities to be enhanced Enhance status as prime contractor in all defense programs by reinforcing combat system capabilities Status Quo . ce . A naval vessel and main system components * Fincantieri is already prime contractor on some
Slide 46: Case Study
Slide 47: The Armada Series
© Remote Vessel Operation : The Armada Series i ee ee oie . i 5 Cee
Slide 48: Case Study: Ocean Infinity - The Project
Case Study: Ocean Infinity FINCANTIER! The Project + Part of the Armada series for Ocean Infinity + 14 Vessels in total, built in Vietnam, commissioned in Norway * Top-side and remote solution finalized in Norway * Two types of design, 78m vessel and 86m vessel * Flexible deck layout for multi use o
Slide 49: Case Study: Ocean Infinity - Green Transition
Case Study: Ocean Infinity FINCANTIER! Green Transition * Optimized hull design + Efficient MGO usage + Battery hybrid * Fuel ready (Ammonia) notation + Fuel-cell prepared * Hybrid electric propulsion system 49
Slide 50: Case Study: Ocean Infinity - Digitalization
FINCANTIER! Study: Ocean Infinity Digitalization The digital strategy of Finca is moving to reality by this project. Remote Support Dee GOA) Greener & Safer Navigation Operations Safety Situational awareness AUTOMATED ROBOTICS Periodically Unmanned Bridge Automated Operations &. Autonomous > THE FUT
Slide 51: SeaQ Remote Control Center
FINCANTIER! SeaQ Remote Control Center
Slide 52: Seafincantieri
Seakincantier “=
Slide 53: Case Study: Ocean Infinity - Plan moving forward
Case Study: Ocean Infinity FINCANTIER! Plan moving forward Delivery ist Remote Remote Fleet Autonomous Vessel Navigation Operations Operations Operations | | | | | i ! ! i i i Remote Potential on board i i f Engineering Engineering crew reduction f f i i i I ' 2023 2024 2025 2026 2027 Achieving full
Slide 54: We are what we do
We are what we do We exjolore We take action We become experts a Fincantieri company
Slide 55: Concluding Remarks
onclud ing Remarks
Slide 56: Key Assumptions for the Business Plan - Top Line
Financials & Guidance Key Assumptions for the Business Plan — Top Line FINCANTIER! Shipbuilding Offshore & Specialized Vessels Equipment, Systems and Services Healthy Market Prospects Across all Sectors Strategic Focus on Growth and Profitability High Quality Backlog and Visibility on Revenues Order
Slide 57: Key Assumptions for the Business Plan - Margins & Leverage
Financials & Guidance FINCANTIER! Key Assumptions for the Business Plan — Margins & Leverage De-risking and Financial Discipline Key Cost Item and Financial Management Mitigation of Risk Profile + Reviewing the core business portfolio and structural assessment of risk, strategic and value-based para
Slide 58: Solid Order Book with Strong Visibility up to 2029
Financials & Guidance FINCANTIER! Solid Order Book with Strong Visibility up to 2029 with 89 ships in portfolio Consolidated backlog of € 22.7 bn at Q1 2023 equating to 3.0x 2022 Revenues Soft Backlog of € 11.3 bn equating to further 1.5x 2022 Revenues Shipbuilding - Cruise Segment Shipbuilding - Na
Slide 59: Shipbuilding Segment Evolution
Financials & Guidance FINCANTIER! & & Shipbuilding Segment Evolution Solid Revenue growth, particularly in Naval segment, coupled with a gradual increase in profitability Historical Trends * Cruise order intake rebounded in 2022as per improved sector outlook * Record revenues in 2021 and 2022 reflec
Slide 60: Offshore & Specialized Vessels Targets
• • 1.1-1.2 1.2-1.4 0.9-1.0 • 0.8 2022 2023 2024 2025 • • ~5.0% ~6.0% ~6.5% 2.9% • 2022 2023 2024 2025 60
Slide 61: Mechanical components and Electronics; Infrastructure
Mechanical components and Electronics Infrastructure • • 1.1-1.2 1.4-1.5 1.3-1.4 0.9 • ~0.6 0.7-0.8 ~0.8 0.6 ~0.6 ~0.6 ~0.6 0.3 2022 2023 2024 2025 • • ~7.0% ~6.0% 2022 ~5.0% • ~8.5% ~9.0% ~7.0% 4.5% 2022 ~1.0% ~2.0% ~3.5% 2023 2024 2025 • -47.9% - 10.5% 61
Slide 62: Group Revenues and EBITDA Margin Targets
• • ~8.8 ~9.8 7.4 ~7.6 ~8.0 • 2022 2023 2024 2025 2027 • • ~7.0% ~8.0% ~5.0% ~6.0% 3.0% 2022 2023 2024 2025 2027 62
Slide 63: Net Financial Position and NFP/EBITDA Targets
• • 1.3 1.2 • 0.9 0.9 0.7 • 2022 2023 2024 2025 2027 • 11.5x 7.0-7.5x 6.0-7.0x 4.5-5.5x 2.5-3.5x 2022 2023 2024 2025 2027 63
Slide 64: Financials & Guidance
Financials & Guidance FINCANTIERI 2023 2024 2025 2027 Revenues ~7.6 bn ~8.0 bn ~8.8 bn ~9.8 bn Strong Revenues thanks to backlog and robust order intake to 2027 streamlining Fincantieri’s undisputed market leadership position EBITDA Margins ~ Bio ~ 6% ~ 7% ~ 8% Margin factor in inflation volatility
Slide 65: Agenda
Slide 66: Business, Financials, ESG & Sustainability
• • Business • • • • Financials • • • ESG & • Sustainability • 66
Slide 67: Q&A
Slide 68: 2023-2027 Strategic Plan
2023-2027 Strategic Plan FINCANTIERI