Fincantieri S.p.a. · MIL:FCT
Fincantieri — Banca IMI Roadshow 2019 - Milan
41 slides from Fincantieri's conference presentation, Mar 18, 2019
Slide 1: Update post FY 2018
FINCANTIERI Update post FY 2018 March 2018
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 Carnival Vista Carnival Cruise Lines “ECO Notation” by Lloyd‘s Register for exceeding environmental standards
Slide 4: Description of the Group
Section 1 Description of the Group FREMM “Alpino” Italian Navy Best in class in terms of endurance
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 ~ € 33.8 bln total backlog(2) ~ 19,300 employees • € 25.5 bln backlog ~ 80,000
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 • 7 ships delivered in FY 2018 • Proven track record of on-time, on-budget Shipbuilding delive
Slide 8: Consolidated capability to acquire new clients and develop solid partnerships
Consolidated capability to acquire new clients and develop solid partnerships Client diversification Long standing relationships Vessels delivered(1) Vessels in backlog(1) Today (2) • From 1986 67 7 74 • Up to 2022 2002 (3) • From 2007 3 10 13 • Up to 2027 • From 2007 2 2 4 • Up to 2021 • From 2008
Slide 9: Solid ownership and Group structure
Solid 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 ref
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: 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(1) covering approximatively 6.2 years of work if compared to 2018 revenues High diversification in terms of
Slide 12: Financial overview
Section 2 Financial overview Skandi Africa DOF Ship of the Year 2015
Slide 13: FY 2018 Key Messages: Solid financial and operating performance
FY 2018 Key Messages: Solid financial and operating performance • Robust order intake at €8.6 bln with orders for 27 new vessels − 14 new cruise ships for 8 different shipowners Order intake − Acquisition of a new important client: TUI Cruises (RCL Group) • Record-high Total backlog(1) with 116 unit
Slide 14: FY 2018 Key Messages: Ongoing strategic development
FY 2018 Key Messages: 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 Allian
Slide 15: Backlog ramp-up to record-high level in 2018
Backlog ramp-up to record-high level in 2018 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 FY 2016 FY 2017
Slide 16: 2018 order intake and backlog: breakdown by segment
2018 order intake and backlog: breakdown by segment Order intake Total backlog(1) € mln € mln 5.2x 6.2x 1.7x 1.6x 4.4x 4.7x • Record-high total backlog at €33.8 8,617 8,300 bln, covering 6.2 years of work if 8,554 ,1.00 573 6 1,638 compared to 2018 revenues 471 4,100 987 913 1,186 595 • Total backlo
Slide 17: 2018 backlog deployment: breakdown by segment and end market
2018 backlog deployment: breakdown by segment and end market Shipbuilding Offshore & Specialized Vessels # ship deliveries(1) # ship deliveries(1) Cruise Naval(2) • 35 units delivered in FY 2018, 98 ships in backlog 2018 7 2018 6 2018 22 • Cruise: 41 vessels − Deliveries up to 2027 2019 8 2019 3 201
Slide 18: Solid revenue growth and operating performance
Solid revenue growth and operating performance Revenues & EBITDA(1) / margin € mln -0.6% 6.0% 6.8% 7.6% 6,000 +31% (+9.4% CAGR) 1000 5,474 5,020 900 5,000 4,429 800 4,183 700 4,000 600 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 Revenues EBITDA EBI
Slide 19: Revenues: record-high level with a growth of +9% YoY
Revenues: record-high level with a growth of +9% YoY Revenues breakdown by segment(1) € mln 5,474 5,020 10.8% 651 • Record-high revenues at €5,474 10.1% 558 mln (+9% vs FY 2017) 11.3% 681 12.3% 676 - 18 − Shipbuilding revenues up 9.6% vs - 22 FY 2017 1,434 1,212 − Offshore & Specialized Vessels reve
Slide 20: 2018 EBITDA: healthy operating performance
2018 EBITDA: healthy operating performance EBITDA(1) and EBITDA margin € mln • EBITDA at €414 mln (up 21% vs FY 6.8% 7.6% 2017), EBITDA margin at 7.6% (vs 6.8% of FY 2017) 414 • Strong performance in 11.2% 73 Shipbuilding both from cruise 341 projects and naval business 11.5% 64 6.1% 41 • Higher vol
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: 2018 Net working capital
2018 Net working capital(1) Breakdown by main components € mln FY 2017 FY 2018 Inventories and advances to 881 suppliers 835 • Growth of production volumes in 648 936 cruise and naval implies increase of Work in progress net of advances from customers Work in progress and Trade payables 909 749 Trad
Slide 25: 2018 Net financial position
2018 Net financial position(1) Breakdown by main components € mln – Net cash / (Net debt) FY 2017 FY 2018 63 17 Non-current financial receivables 123 677 35 Current financial receivables • Increase of net debt consistent with 274 Cash & cash equivalents the cruise business dynamics showing higher pr
Slide 26: Strategy & Outlook
Section 4 Strategy & Outlook
Slide 27: 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 28: Outlook
Outlook • 2019 results expected to be in line with 2018 and consistent with 2018-2022 Business Plan guidelines ‒ Further growth of revenues and EBITDA margin in line with 2018 ‒ Expected increase in net debt due to working capital financing needs Shipbuilding • Expected delivery of 11 units, of whic
Slide 29: 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 30: 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 31: Appendix
Appendix FINCANTIERI The sea ahead | el 31
Slide 32: 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 33: 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 34: FY 2018 main orders
FY 2018 main orders Sector Vessel Client Number of ships Expected Delivery Viking Cruises 2 2022-2023 Silversea Cruises 1 2021 Norwegian Cruise Line 2 2026-2027 Cruise Ships Cunard Line 1 2022 Virgin Cruises 1 2023 Shipbuilding TUI Cruises 2 2024-2026 Ponant 2 2020 Expedition Cruise Vessels Hapag-Ll
Slide 35: FY 2018 main deliveries
FY 2018 main deliveries Sector Vessel Client Shipyard Carnival Cruise Line Cruise ship “Carnival Horizon” Monfalcone (Carnival Corporation) Riva Trigoso – Muggiano/ Oceanographic vessel “Kronprins Haakon” Institute of Marine Research Vard Langsten Cruise ship “Seabourn Ovation” Seabourn Cruise Line
Slide 36: FY 2018 main deliveries
FY 2018 main deliveries Carnival Horizon Seabourn Ovation MSC Seaview Viking Orion Shipbuilding HAL Nieuw Statendam Ponant Le Champlain Ponant Le Laperouse Kronprins Haakon FREMM Martinengo LCS 11 Sioux City LCS 13 Wichita Offshore & Specialized Vessels Module Carrier Vessel (x12) LPG Carrier Jorge
Slide 37: 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 38: 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 39: 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 40: 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 41: Capex
Capex 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 assets %