SUMMARY & BUSINESS UPDATE
Executive summary
Revenues up by 28% and EBITDA +65%, Backlog at €36 bn, 2021 guidance fully confirmed
• FY 2021 guidance fully confirmed with revenues expected to reach +25-30% YoY and EBITDA margin over 7%
• Total backlog with 110 units at €36.0 bn, 6.9x 2020 revenues: backlog with 92 units at €26.6 bn and soft backlog at €9.4 bn
• Order intake at €2.3 bn
• Record-high production volumes with 12.3 mln production hours at Italian sites, +34% YoY
• 13 ships successfully delivered from 10 different shipyards, of which 3 cruise ships delivered in July
• Operating cash flow more than compensates Capex needs, also after €350 mln repayment of construction loans
• COVID-19 managed effectively
Business update
Positive business operating performance across all segments
Sustainable strategy
Tireless effort to become a model of excellence
Green Finance
• Group’s first trade finance credit line to support the construction of custom-built green cable layer for a Van Oord vessel to operate in offshore wind farms with low gas emissions
Decarbonization
• MoU with ENI to develop decarbonization projects in the fields of energy, transports, and circular economy
Green Hydrogen
• Agreement with Enel Green Power Italia for the production, supply, management and use of green hydrogen for port areas and long-range maritime transport
ESG Awards
Hydrogen-Powered Ships
• MoU with MSC and SNAM for a feasibility study to design and build the first oceangoing hydrogen-powered cruise ship
(1) Rating related to the engagement of the supply chain on sustainability and climate change topics
New orders
New orders across all segments amount to € 2.3 bn
Main deliveries
13 ships successfully delivered from 10 different shipyards in 3 different continents
Backlog deployment
Well-balanced visibility both in Cruise and Naval, 4 new orders in Offshore and Specialized Vessels in 3Q


(1) Articulated Tug Barge (ATB) is an articulated unit consisting of a barge and a tug, thus being counted as two vessels in one unit
(2) The Offshore & Specialized Vessels business generally has shorter production times and, as a consequence, shorter backlog and quicker order turnaround than Cruise and Naval
9M 2021
FINANCIAL RESULTS
Order intake and backlog
Solid order intake and hefty soft backlog


• No orders cancellation
• Sizeable order intake at € 2.3 bn, thanks to the positive impact of Offshore & Special Vessels and ESS
• Soft backlog includes the agreement of Fincantieri as prime contractor for the supply of 6 frigates to the Indonesian Navy
• Total backlog represents 6.9x 2020 revenues
(1) Total backlog is the sum of backlog and soft backlog
(2) Order intake/revenues
(3) Soft backlog represents the value of existing contract options and letters of intent as well as contracts in advanced negotiation, none of which yet reflected in the order backlog
Revenues
Revenue growth in line with 2021 guidance, with positive contribution across all segments


Revenues excluding pass-through activities are up 28.3% YoY thanks to record-high production volumes in the 9M 2021 (12.3 mln production hours)
Shipbuilding up 28.5% YoY thanks to the programmed production ramp-up
Offshore & Specialized Vessels up 15.3% YoY
Equipment, Systems & Services up 29.1% YoY mainly related to the complete accommodation business area
88% of revenues from international clients
(1) Breakdown calculated before eliminations
EBITDA
Remarkable increase in volumes and margins


EBITDA margin at 7.3% excluding pass-through activities mainly thanks to the positive contribution from Shipbuilding despite the impact from increased steel prices
Shipbuilding EBITDA is up €112 mln YoY with margin at 7.6%
Offshore EBITDA is up €6 mln YoY thanks to the effective repositioning strategy in more promising sectors
ESS EBITDA is up €15 mln YoY despite the lower Ship Repair and Conversion margins
(1) EBITDA is a Non-GAAP Financial Measure. The Company defines EBITDA as profit/(loss) for the period before (i) income taxes, (ii) share of profit/(loss) from equity investments, (iii) income/expense from investments, (iv) finance costs, (v) finance income, (vi) depreciation and amortization (vii) expenses for corporate restructuring, (viii) accruals to provision and cost of legal services for asbestos claims, (ix) other non recurring items
EBITDA growth
Better operating margin thanks to higher production volumes and improved margins


Shipbuilding: EBITDA improvement driven by higher production volumes and improved operating margin
Offshore and Specialized Vessels: increased EBITDA thanks to higher operating margins
ESS: positive effect brought about by higher production volumes and better margins
Capex
Significant investments creating further efficiencies in engineering and production scenarios


• Capex up 50% vs 9M 2020 to support shipyards upgrade and further efficiencies to address new productive scenarios
• Investments breakdown as follows:
- Intangible activities for €33 mln, in line with 9M 2020
- Tangible activities for €225 mln
• Solid coverage of industrial fixed costs structure, allowing greater cash generation and progressive deleveraging
Net working capital and net financial position
NFP in line with expectations with 2 cruise units to be delivered in 4Q


• NWC negative at €398 mln, - € 196 mln vs FY 2020, mainly due to the deliveries in the period
• Net debt at €1,059 mln in line with FY 2020 and FY 2021 expectations
• NFP still affected by the strategy of deferrals granted to clients (€ 298 mln), with cash-in to occur in 4Q and in 2022
• Operating cash flow more than compensates the Capex needs, allowing also €350 mln repayment of construction loans
(1) Construction loans are comlnitted working capital financing facilities, treated as part of Net working capital, not in Net debt, as they are not general purpose loans and can be a source of financing only in connection with ship contracts
OUTLOOK
Update on cruise
Around 57% of the global fleet in service with 65 brands already operating by the end of October
Business outlook
Confirmed FY 2021 guidance
Expected Financial Performance in 2021
• Revenues +25%-30% YoY and EBITDA margin over 7.0% despite the surge in commodity and energy prices
• FY 2021 net debt to be in line with FY 2020 levels
Medium to Long Term Expectations
• Backlog preservation with production activities at full speed, thanks to the solid coverage of industrial fixed costs structure, allowing greater cash generation and progressive deleveraging
• Increased commodity prices mitigated by the positive effect of planning and design processes’ revision, by the important Capex plan in both production and technology and by human capital investments
Focus on ESG
• Development of technological solutions able to satisfy clients’ needs, while reducing emissions and raising energy efficiencies
• Promotion of growth, enhancement and training of human capital, with a particular focus on highly motivated people, in particular youth, able to spread an inclusive and innovative company culture
• Reduction of CO2 and other pollutant emissions in order to fight against climate change also by purchasing energy from renewable sources