Fincantieri S.p.a. · MIL:FCT
Fincantieri — Borsa Italiana - Digital Italian Equity Week, Industrial & Healthcare Day 2020
37 slides from Fincantieri's conference presentation, Sep 15, 2020
Slide 1: Borsa Italiana - Digital Italian Equity Week Industrial & Healthcare Day
FINCANTIERI Borsa Italiana - Digital Italian Equity Week Industrial & Healthcare Day 15th September 2020
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
Slide 4: Description of the Group
Section 1 Description of the Group
Slide 5: Fincantieri at a glance
Fincantieri at a glance We are an Italian Group with a global footprint € 5.8 bn FY19 revenues(1) 48% of our employees are based in Italy(2) and 82% of revenues Our come from international clients(1) figures € 37.9 bn Total backlog(2,3) 18 shipyards 4 Our continents global reach ~ 20,000 employees >
Slide 6: Products, clients and backlog
Products, clients and backlog Diversified product portfolio with a wide client base and strong backlog Main products Key clients Revenues 2019(1) Backlog(2) (4) (5) Cruise • All cruise ships: Luxury/Niche(3) Upper Premium €3,574 mln Premium Contemporary 55.6% Naval € 26,333 mln Shipbuilding
Slide 7: Markets and positioning
Markets and positioning Leadership in high-potential reference markets and solid track record End markets Market Trend Main Drivers Track record Cruise • World leader in the design and • Record order levels in 2019 construction of vessels for all • To be reviewed once the effects of segments of the
Slide 8: Focus: cruise client portfolio
Focus: cruise client portfolio Consolidated capability to acquire new clients and diversify product portfolio…. Today Luxury / Niche 2002 Upper Premium Premium Premium Contemporary Carnival brands Contemporary Norwegian Cruise Lines brands Royal Caribbean brands 8
Slide 9: Key competitive strengths
Key competitive strengths Consolidated leadership, high diversification and flexible global production network Consolidated leadership in diversified markets and High diversification in terms of end market, geography 1 2 sizeable backlog and client portfolio • Leader in cruise market and in naval se
Slide 10: Ownership and Group structure
Ownership and Group structure A listed company with strong reference shareholders 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 Econo
Slide 11: Financial overview
Section 2 Financial overview
Slide 12: 1H 2020 Key Messages
1H 2020 Key Messages No order cancellation and record-high total backlog up to almost €38 bln • No cancelled orders thanks to effective backlog preservation strategy • Slowdown of the production schedule and postponement of deliveries has impacted revenues COVID-19 (-15.6% YoY) update • 3 cruise shi
Slide 13: 1H 2020 Key Messages: Continuing focus on strategic developments
1H 2020 Key Messages Continuing focus on strategic developments • FMM prime contractor within the FFG(X) program: awarded a nearly $800 mln contract for the design and FFG(X) construction of the first-in-class guided missile frigate for the US Navy. The contract also includes options for 9 program a
Slide 14: 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 5.4x 5.2x 6.2x 5.6x € mln 1.5x 1.7x 1.6x 1.5x 4.1x 4.4x 4.7x 4.9x 33,824 32,690 8,300 4,100 8,554 8,617 8,692 26,153 24,031 4,100 6,505 5,800 8,300 28,590 25,524 22,053 5,800 18,231 4,100 3,000 FY 2016 FY
Slide 15: 1H 2020 Order intake and backlog
1H 2020 Order intake and backlog Breakdown by segment Order intake Total backlog(1) € mln 2.3x 0.7x € mln 6.1x 5.6x 6.5x 5.4x 4.9x 4.8x 6,627 37,912 349 52 9,900 33,127 32,690 3,600 4,100 1,604 1,736 1,951 881 888 744 • Order intake at € 1.7 bln • Total backlog with 117 units at € 37.9 bln, approxim
Slide 16: Backlog deployment
Backlog deployment Breakdown by segment and end market Shipbuilding Offshore & Specialized Vessels # ship deliveries # ship deliveries Cruise Naval(1) • 10 units delivered in 1H 2020 2020 4 4 8 2020 1 5 6 2020 5 4 9 and 92 ships in backlog • Cruise: 42 vessels − Deliveries up to 2027 2021 8 2021 7 2
Slide 17: 1H 2020 Revenues
1H 2020 Revenues Revenues breakdown by segment(1) € mln 2,837 2,808 12.0% • Revenues down 15.6% YoY, with an 371 12.1% 371 2,369 estimated shortfall of €790 mln 10.1% 314 7.6% 234 10 10 14.8% 392 due to the production downtime 8.6% 228 1 − Shipbuilding revenues down 723 723 17.5% vs 1H 2019 (Cruise
Slide 18: 1H 2020 EBITDA
1H 2020 EBITDA EBITDA(1) and EBITDA margin € mln 7.6% 8.1% • EBITDA at € 119 mln (-47.5% YoY) and EBITDA margin at 5.0% (8.1% 215 227 in 1H 2019) 10.5% 39 39 10.6% 5.0% • COVID-19 related reduced EBITDA contribution of € 65 mln − Shipbuilding segment lags 119 behind performance due to 246 239 6.0% 2
Slide 19: 1H 2020 Net result
1H 2020 Net result Adjusted Net result(1) € mln 1.7% -1.2% 47 51 (4) (27) (2) (29) • Increased extraordinary and non 1H 2019 1H 2020 recurring items − €114 mln COVID-19 related Attributable to owners of the parent Attributable to non-controlling interests Adjusted Net income margin costs € mln 1H 20
Slide 20: Balance Sheet and Capital Structure
Section 3 Balance Sheet and Capital Structure
Slide 21: 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 22: 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 265 (120) 44 (125) (615) (314) (494) (736) 3,045 2,660 2,376 2,393 757 432 475 368 (678) (624) (632) (811) (453) (482) (485) (399) (1,433) (1,889) (1,984) (264) (2,359) (530)
Slide 23: 1H 2020 Net working capital
1H 2020 Net working capital(1) Breakdown by main components € mln FY 2019 1H 2020 Inventories and advances to suppliers 828 876 • Main drivers include: Work in progress net of 981 − Reduced production advances from customers 1,415 activities at Italian premises as a consequence of suspension 1,083 o
Slide 24: 1H 2020 Net financial position
1H 2020 Net financial position (1) Breakdown by main components € mln – Net cash / (Net debt) FY 2019 1H 2020 98 18 Non-current financial receivables 91 897 2 382 Current financial receivables • Increase of net debt (+244 mln vs FY 2019) mainly due to the Cash & cash equivalents (399) postponement o
Slide 25: Strategy & Outlook
Section 4 Strategy & Outlook
Slide 26: Cruise industry outlook
Cruise industry outlook Cruise • Results of a survey on cruise traveler sentiment shows 32% of respondents are already looking to book their travelers next cruise and 37% said that they are likely to book a future cruise once restrictions ease(1) Cruise • Major cruise operators are disposing of olde
Slide 27: Company outlook
Company outlook Production • Production volumes are expected to come back to pre-Covid levels in the second half of the year volumes • Second-half 2020 revenues are expected to be broadly in line with second-half 2019 revenues Cruise • 3 units scheduled for delivery from Italian shipyards in the sec
Slide 28: Appendix
Appendix FINCANTIERI | el
Slide 29: 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 30: Deep-dive: Vard
Deep – dive: Vard Ongoing integration and alignment to Group best practices What we did What we are working on Vard full integration process: Delisting of the subsidiary in December 2018 Change in management Additional efforts to align industrial management Operational reorganization of bo
Slide 31: 1H 2020 main orders and deliveries
1H 2020 main orders Segment Vessel Client # of ships Expected Delivery Shipbuilding FFG(X) first-in-class frigate US Navy 1 2026 Fishing vessel Framherij 1 2022 Offshore & Specialized Fishing vessel Nergard Havfiske 1 2022 Vessels Service operation vessel Ta San Shang Marine 1 2022 1H 2020 main deli
Slide 32: Overview of financial performance indicators
Overview of financial performance indicators(1) € mln FY 2016 FY 2017 FY 2018(2) FY 2019 Order intake 6,505 8,554 8,617 8,692 Total backlog 24,031 26,153 33,824 32,690 Of which backlog 18,231 22,053 25,524 28,590 Of which soft backlog 5,800 4,100 8,300 4,100 Revenues 4,429 5,020 5,416 5,849 EBITDA 2
Slide 33: Financial performance: Revenues
Financial performance: Revenues Revenues(1) € mln 5,849 5,474 5,416 899 5,020 651 651 558 440 4,429 681 623 11 676 18 18 495 22 960 1,503 1,434 1,434 12 1,212 5,088 1,156 4,678 4,678 4,267 3,574 3,246 3,033 3,226 3,226 2,078 (272) (481) (536) (536) (578) FY 2016 FY 2017 FY 2018 Reported FY 2018 Rest
Slide 34: Financial performance: EBITDA
Financial performance: EBITDA EBITDA / margin(2) € mln 6.0% 6.8% 7.6% 7.8% 5.5% 414 421 320 341 11.2% 73 11.2% 73 10.0% 90 267 11.5% 64 41 12.5% 62 6.1% 5.3% 51 8.5% 395 8.5% 395 7.4% 375 6.3% 5.7% 270 185 -2.9% (20) -2.1% (13) -24.2% (31) (34) (34) (34) (107) (38) FY 2016 FY 2017 FY 2018 Reported F
Slide 35: 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 91 114 3.5% 4.4% 5.1% 2.6% 60 95 117 66 (6) (4) (3) (64) (7) (71) FY 2016 FY 2017 FY 2018 FY 2019 285 of which Group of which minority interests 221 157 153 Net result € ml
Slide 36: Capex: historical trend
Capex: historical trend Capex evolution Capex by segment € mln € mln 3.8% 5.1% 3.2% 2.9% 279 279 21 224 61 224 30 20 6 8 80 163 161 31 163 161 27 13 55 37 18 9 7 6 218 222 165 144 108 124 120 124 FY 2016 FY 2017 FY 2018 FY 2019 FY 2016 FY 2017 FY 2018 FY 2019 Property, plant and equipment Intangible
Slide 37: Capital expenditures
Capital expenditures Capex € mln 3.5% 5.2% 122 102 25 22 • Capex mainly dedicated to: 80 97 − Improving Italian yards for 1H 2019 1H 2020 higher efficiency − Adjusting Vard Tulcea and Tangible Intangible % of Revenues Braila production capacity Capex by segment € mln − Enhancing safety and environme
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