Fincantieri S.p.a. · MIL:FCT
Fincantieri — Kepler Cheuvreux Italian Investment Conference 2019
38 slides from Fincantieri's conference presentation, May 2019
Slide 1: Update post Q1 2019 results
FINCANTIERI Update post Q1 2019 results May 2019
Slide 2: Safe Harbor Statement
Safe Harbor Statement This Presentation contains certain forward-looking statements. Forward-looking statements concern future circumstances and results and other statements that are not historical facts, sometimes identified by the words "believes," "expects," "predicts," "intends," "projects," "pl
Slide 3: Table of Contents
Table of Contents Section 1 Description of the Group Section 2 Financial overview Section 3 Balance Sheet and Capital Structure Section 4 Strategy & Outlook Appendix Niew Statendam Holland America Line
Slide 4: Description of the Group
Section 1 Description of the Group LSS Vulcano Italian Navy
Slide 5: Fincantieri at a glance
Fincantieri at a glance #1 Western designer & shipbuilder(1) with 230 years of history & >7,000 ships built Norway • 5 shipyards 20 shipyards € 5,474 mln revenues 4 continents Romania China • 2 shipyards • 1 Joint Venture ~ € 34.3 bln total backlog(2, 3) ~ 19,300 employees • € 30.7 bln backlog ~ 80,
Slide 6: Consolidated positioning in Fincantieri's reference markets
Consolidated positioning in Fincantieri’s reference markets (1) End markets Main products Comments Revenues 2018 Backlog(2) Cruise • All cruise ships • A world leader in the design and construction (from large contemporary ships to of vessels for all segments of the cruise €3,226 small luxury and ex
Slide 7: Diversified client base with long standing relationships, unrivalled track record & technological leadership
Diversified client base with long standing relationships, unrivalled track record & technological leadership Key clients and relationships Track record Cruise (1) (2) • 87 ships delivered from 1990 to 2018 • 2 ships delivered in Q1 2019 • Proven track record of on-time, on-budget Shipbuilding delive
Slide 8: Consolidated capability to acquire new clients and develop long term partnerships
Consolidated capability to acquire new clients and develop long term partnerships Client diversification Long standing relationships Vessels delivered(1) Vessels in backlog(1) Today (2) • From 1986 67 9 76 • Up to 2025 2002 (3) • From 2007 3 10 13 • Up to 2027 • From 2007 2 2 4 • Up to 2021 • From 2
Slide 9: Ownership and Group structure
Ownership and Group structure Brief description of the Group structure Simplified ownership and Group structure • Fincantieri shares are listed on the Milan Stock Exchange Italian Ministry Italian Banking Treasury Shares since July 3, 2014 of Economy and Finance Foundations • Fincantieri’s reference
Slide 10: Creation of an international leading player with a well diversified product portfolio
Creation of an international leading player with a well diversified product portfolio 2002 2008 2010-2011 2013 2014 2017 2018 Business Plan 2018- Italian-French 2022 IPO shipbuilding alliance Diversification into Restructuring of Offshore • Presentation of a 5 Expansion in the • Launch of a French-
Slide 11: Revenue growth and operating performance
Revenue growth and operating performance Revenues & EBITDA(1) / margin € mln -0.6% 6.0% 6.8% 7.6% 6,000 Revenues +31% (+9.4% CAGR) 5,474 1000 5,020 5,000 900 4,429 4,183 800 4,000 700 600 3,000 500 400 2,000 300 414 200 1,000 341 267 100 0 0 (26) -100 FY 2015 FY 2016 FY 2017 FY 2018 n.a. 4.9 2.8 2.7
Slide 12: Key competitive strengths
Key competitive strengths Consolidated leadership in growing markets and long term visibility • Leader in fast-growing cruise market and in naval segment • Sizable order book and total backlog amounting to approximatively 6.3 years of work if compared to 2018 revenues(1) High diversification in term
Slide 13: Financial overview
Section 2 Financial overview Skandi Africa DOF Ship of the Year 2015
Slide 14: Q1 2019 Key Messages
Q1 2019 Key Messages Revenues up 13%, orders at € 6.5 bln with 11 cruise vessels, total backlog at € 34.3 bln • Total order intake at € 6.5 bn: − Record order acquisition of 11 cruise ships for 5 different brands (Oceania, Regent Seven Seas Cruises, Viking, MSC, Princess) Order intake − 1 Littoral C
Slide 15: Ongoing strategic development
Ongoing strategic development • Building on the support of the French and Italian Governments, Fincantieri and Naval Group laid the grounds for the establishment of a 50/50 joint venture, a crucial step towards the creation of a Defence industry groundbreaking industrial Alliance • Fincantieri signe
Slide 16: Backlog ramp-up and conversion of soft backlog into backlog
Backlog ramp-up and conversion of soft backlog into backlog Order intake Total backlog(1) € mln € mln 4.5x 5.4x 5.2x 6.2x 2.4x 1.5x 1.7x 1.6x 3.8x 4.1x 4.4x 4.7x 33,824 10,087 8,617 8,300 8,554 26,153 24,031 4,100 6,505 18,721 5,800 3,000 25,524 22,053 5,800 18,231 5,000 15,721 4,100 3,000 FY 2015 F
Slide 17: Q1 2019 order intake and backlog: breakdown by segment
Q1 2019 order intake and backlog: breakdown by segment Order intake Total backlog(1) € mln € mln 5.5x 6.2x 6.3x 0.9x 4.7x 4.3x 4.7x 5.6x 6,455 33,824 34,342 168 39 8,300 3,600 • Total order intake for the quarter 1,607 27,730 € 6.5 bln 920 5,900 1,638 • Record order acquisition in 987 1,196 cruise b
Slide 18: Q1 2019 backlog deployment: breakdown by segment and end market
Q1 2019 backlog deployment: breakdown by segment and end market Shipbuilding Offshore & Specialized Vessels # ship deliveries(1) # ship deliveries(1) Cruise Naval(2) • 8 units delivered in Q1 2019 and 104 ships in backlog 2019 2 6 8 2019 1 2 3 2019 5 17 22 • Cruise: 50 vessels − Deliveries up to 202
Slide 19: Q1 2019 Revenues: +13% YoY
Q1 2019 Revenues: +13% YoY Revenues breakdown by segment(1) € mln 1,385 1,226 1,226 11.3% 170 12.6% 167 12.4% 167 224 14.9% • Revenues up 13% vs Q1 2018 at 155 11.5% 155 1 18.4% 5 € 1,385 mln 5 291 292 292 − Shipbuilding revenues up 8.8% vs Q1 2018 1,023 76.1% 1,023 73.8% 1,113 69.0% 726 821 − Offsh
Slide 20: Q1 2019 EBITDA
Q1 2019 EBITDA EBITDA(1) and EBITDA margin € mln 7.3% 7.3% 6.5% • EBITDA at € 90 mln (€ 89 mln in 90 Q1 2018), EBITDA margin at 6.5% 89 89 (7.3% in Q1 2018) 9.2% 15 9.2% 15 10.3% 18 3.5% 9 11.4% 18 • Trend substantially resulting from: − Positive performance of the Shipbuilding and the Equipment, 8.
Slide 21: Balance Sheet and Capital Structure
Section 3 Balance Sheet and Capital Structure
Slide 22: Working capital dynamics
Working capital dynamics Indicative payment terms Illustrative phases of the shipbuilding process(1) Impact on net working capital Signing A First Cut B Launch C Delivery D Design / Project Hull Assembly and Outfitting and Development Pre-Outfitting Sea Trials • Increases during construction Cruise
Slide 23: Historical evolution of Net Working Capital and Net Financial Position
Historical evolution of Net Working Capital and Net Financial Position Net Working Capital(1) Net Financial Position(2) € mln 251 265 (120) 44 (438) (615) (314) (494) 2,110 2,393 2,841 2,376 432 426 368 432 (1,103) (624) (624) (263) (1,103) (453) (482) (482) (1,487) (1,433) (1,889) (601) (1,194) (26
Slide 24: Q1 2019 Net working capital and Net debt
Q1 2019 Net working capital and Net debt(1) Breakdown by main components € mln FY 2018 Q1 2019 Inventories and advances to suppliers 881 813 • Net working capital and Net debt Work in progress net of advances from customers dynamics mirror: 936 1,064 − The increase in production Trade receivables vo
Slide 25: Strategy & Outlook
Section 4 Strategy & Outlook
Slide 26: Growth strategy based on long term visibility, new horizons and markets, innovation and streamlined production
Growth strategy based on long term visibility, new horizons and markets, innovation and streamlined production Strong top line Greater efficiency and expansion and positive market consolidation as a momentum to drive a global champion in the structural increase in shipbuilding industry profitability
Slide 27: Q1 2019 Outlook
Q1 2019 Outlook • 2019 results expected to be in line with 2018 and consistent with 2018-2022 Business Plan guidelines ‒ Growth trend for revenues with an EBITDA margin confirmed to be in line with 2018 ‒ Expected increase in net debt due to working capital financing needs Shipbuilding • Delivery of
Slide 28: Short and medium term financial targets
Short and medium term financial targets +18/20% +17/21% € bln +3/6% 5.0 Revenues 2017A 2018E 2020E 2022E ~7.5% ~8.0% 8.0-9.0% 6.8% EBITDA margin 2017A 2018E 2020E 2022E 3.0-4.0% Adjusted 2.0-3.0% 1.8% 1.8-2.0% Net income(1) margin 2017A 2018E 2020E 2022E € bln 0.4-0.6 0.3 0.2-0.4 Net Debt 0-0.1 2017
Slide 29: Shipbuilding: quantifying main drivers of growth and increasing profitability
Shipbuilding: quantifying main drivers of growth and increasing profitability Cruise ships by delivery year: prototypes, sister ships and quasi-sister ships % Cruise: mix • Deliveries heavily skewed Sister ships prototypes/ and quasi- towards sister ships with sister ships and 80% 80% 80% sister shi
Slide 30: Appendix
Appendix FINCANTIERI The sea ahead | eel 30
Slide 31: VARD New organizational structure and segment review
VARD New organizational structure and segment review • Following the delisting of VARD, in December 2018, Offshore & Specialized Vessels Shipbuilding the full organizational integration with the Parent Company was launched, both for expedition cruise shipbuilding projects and the related shipyards,
Slide 32: STX France
STX France • In February 2018 Fincantieri(1) signed a share purchase agreement for the acquisition of 50% of STX France from the French State(2) • The signing follows the agreement between the Italian and French Governments to launch a joint process paving the way for the future creation of a progre
Slide 33: Q1 2019 main orders and main deliveries
Q1 2019 main orders Segment Vessel Client Number of ships Expected Delivery Oceania Cruises 2 2022-2025 Regent Seven Seas Cruises 1 2023 Cruise Ships Viking Cruises 2 2024-2025 Shipbuilding MSC Cruises 4 2023-2026 Princess Cruises 2 2023-2025 Littoral Combat Ship US Navy 1 2023 Offshore & Specialize
Slide 34: Overview of financial performance indicators
Overview of financial performance indicators(1) € mln FY 2015 FY 2016 FY 2017 FY 2018 Order intake 10,087 6,505 8,554 8,617 Total backlog 18,721 24,031 26,153 33,824 Of which backlog 15,721 18,231 22,053 25,524 Of which soft backlog 3,000 5,800 4,100 8,300 Revenues 4,183 4,429 5,020 5,474 EBITDA (26
Slide 35: Financial performance: Revenues
Financial performance: Revenues Revenues(1) € mln 5,474 5,020 5,020 651 558 558 4,429 681 4,183 676 18 495 943 22 498 960 22 1,434 1,199 12 1,212 1,212 23 1,156 4,678 4,267 1,056 3,883 3,246 3,033 3,226 2,652 2,649 2,078 1,573 (166) (272) (364) (481) (536) (3) FY 2017 FY 2017 FY 2015 FY 2016 FY 2018
Slide 36: Financial performance: EBITDA
Financial performance: EBITDA EBITDA / margin(2) € mln -0.6% 6.0% 6.8% 6.8% 7.6% 414 11.2% 73 341 341 267 11.5% 64 11.5% 64 4.4% 42 6.1% 41 12.5% 62 5.3% 51 8.5% 395 6.9% 269 6.3% 270 5.7% 185 8.4% 42 -1.3% (34) -2.9% (20) (3) (31) (34) (34) -0.2% (34) (31) (4) FY 2017 FY 2017 - FY 2015 FY 2016 FY 2
Slide 37: Financial performance: EBIT and Net result
Financial performance: EBIT and Net result EBIT / margin Net result before extraordinary and non recurring items(1) € mln € mln 108 91 60 -3.3% 3.5% 4.4% 5.1% 95 111 66 (6) (4) (3) (141) (111) 277 FY 2015 FY 2016 FY 2017 FY 2018 221 157 of which Group of which minority interests Net result € mln (13
Slide 38: Capex: FY 2018
Capex: FY 2018 Capex evolution Capex by segment € mln € mln 3.8% 5.1% 3.2% 2.9% 224 20 224 8 161 31 163 161 80 163 13 13 161 161 10 27 9 18 37 31 7 6 39 55 165 144 120 124 122 124 107 108 (1) (1) FY 2015 FY 2016 FY 2017 FY 2018 FY 2015 FY 2016 FY 2017 FY 2018 Property, plant and equipment Intangible
Fincantieri — Kepler Cheuvreux Italian Investment Conference 2019 on 6ix