Financial press releases

EBITDA at euro 276 million, +60% vs9M 2022

EBITDA margin at 5.1%, improving when compared to 9M 2022 results (3.2%)

Revenues at euro 5,383million, up by 1.3%vs9M 2022

Negative Net financial position at euro 2,705 million in line with FY 2023 outlook

Guidance on revenues, EBITDA and Net financial position confirmed

86 ships in portfolio with deliveries up to 2030 and solid backlog at euro 22.2 billion

Order intake at euro 4.0 billion vs euro 3.3 billion in 9M 2022, supported by a strong contribution from Defence and Wind Offshore

Solid commercial pipeline withstrong growth in Offshore (orders +64% vs9M 2022)

Euro 800 million "Sustainability linked" financing, 70 percent guaranteed by SACE, further strengthening the Group's financial structure

Signed in October a Memorandum of Understanding in the underwater domain fostering the strategic partnership with Leonardo

Delivery of the Business Plan 2023-2027 well on track

Consolidated 9M 2023 results¹

▪    9M 2023 results confirm 2023 guidance

▪    Revenues at euro 5,383 million, in line with 9M 2022 (euro 5,315 million)

▪    EBITDA² ateuro 276 million (euro 172 million in 9M 2022)with an EBITDA margin at 5.1% (vs 3.2% in 9M 2022)

▪    Net financial position negative at euro 2,705 million (negative at euro 2,531 million on December 31, 2022), in line with the production activity and capital expenditures over the period

Operations

▪    Total backlog³ at euro 32.6 billion, approximately 4.4 times 2022 revenues, of which:

-         Backlog: euro 22.2 billion (euro 23.8 billion on December 31, 2022) and 86 ships to be delivered up to 2030

-         Soft backlog:approximatelyeuro 10.4 billion (euro 10.5 billion on December 31, 2022)

▪    Order intake for euro 4.0 billion, of which euro1.9 billion in the third quarter, with a book to bill ratio above 1x

▪    Solid commercial pipeline in all businesses, with significant contracts finalized in October

▪    Cruise: order for two hydrogen-powered ships ordered by MSC to join Explora Journeys fleet and a contract with the Region of Sicily for the construction of a new hybrid-powered (diesel and liquefied natural gas) Ropax ferry which will serve routes between Sicily and the islands of Lampedusa and Pantelleria finalized in October

▪    Naval:

-         Fourth unit of the Constellation programme (FFG-62) for the US Navy awarded to the US subsidiary FMM in June

-         Contracts signed in the third quarter: i) the third submarine of the U212NFS (Near Future Submarine) programme for the Italian Navy, ii) 3 OPVs (Offshore Patrol Vessel), plus 3 additional units under option, for the Italian Navy assigned to the JV with Leonardo, Orizzonte Sistemi Navali and iii) the mid-life upgrade of the Italian and French Horizon-class frigates, awarded to Naviris, the 50/50 owned joint venture by Fincantieri and Naval Group, and eurosam, a JV by MBDA and Thales

• Offshore: orders for 8 Commissioning Service Operation Vessels (CSOVs) units in the first half of the year, with an additional order for the design and construction of two hybrid CSOVs signed in October
• Equipment, Systems and Infrastructure: positive operating performance of the Infrastructure segment with high volumes in the period
• Strategic initiatives: signed in October a Memorandum of Understanding in the underwater domain with Leonardo to define initiatives and further developments related to systems, including underwater drones, for the protection of critical underwater infrastructure
• Delivered 17 ships from 10 shipyards, including the first MSC Explora and the second Prima class vessel for Norwegian Cruise Line in the third quarter of the year, and two more cruise ships to be delivered in the fourth quarter

Sustainability

▪    Sustainable finance: signed and granted in October, a 5-year tenor 800 million euro "sustainability linked" financing, 70% SACE- guaranteed, intertwined with the achievement of KPIs set in the 2023-2027 Sustainability Plan

▪    Decarbonisation: signed an agreement between Fincantieri and RINA for a feasibility study for nuclear ship propulsion

▪    Work FOR Future: signed an important and innovative agreement with trade unions on the new organizational model encompassing smart working as its first important objective. The new model is part of a wider set of transitional projects defined in the Group Industrial Plan fostering a cultural change and highlighting accountability and empowerment of its people

Rome, November 14, 2023– The Board of Directors of FINCANTIERI S.p.A. (“Fincantieri” or the “Company”), chaired by General Claudio Graziano, has approved the nine months financial information at September 30, 2023.

Pierroberto Folgiero, Fincantieri Chief Executive Officer, commented: “The results achieved in the first nine months of 2023 prove a positive progression towards the operational, economic and financial targets of our 2023-2027 Business Plan. The production performance was particularly satisfactory: thanks to the expertise and the commitment of our people, we delivered 17 ships from 10 shipyards, even though they had been designed during Covid and built in a macroeconomic environment marked by a steady rise in raw materials inflation and some challenges in labour supply.

EBITDA up by 60% in absolute value demonstrates that the operating performance is also reflected in an improvement of marginality, which stands at 5.1%, in line with the guidance provided to the market.

In the first nine months the order intake stands at euro 4 billion, up by 23.0% compared to the same period of 2022, confirming the growth expectations outlined in the Business Plan even in the naval and offshore wind sectors as well as in the cruise business”.

Folgiero concluded: “The Group is well on track with the delivery of the 2023-2027 Business Plan, thanks to the implementation of strategic initiatives to further pursue our leadership role in bringing innovation to the shipbuilding sector, progressing in the creation of green and increasingly technological ships, along with operational excellence in backlog execution, also through the modernization of our shipyards”.

ECONOMIC DATA

Revenues at euro 5,383 million for the first nine months of 2023, up by 1.3% compared to the same period in 2022, confirming FY 2023 outlook. As per forecast, the overall increase is mainly driven by the revenue growth of the Offshore and Specialized Vessels business, up by 28.2%, and of the Equipment, Systems and Infrastructure business, improving by 35.3%. These results more than offset the expected decrease in Shipbuilding revenues, ending the first nine months of 2023 with a -5.3% when compared to the same period of 2022. Net of elimination, Shipbuilding accounts for 74% (80% in the first nine months of 2022), Offshore and Specialized Vessels for 12% (10% in the first nine months of 2022) and Equipment, Systems and Infrastructure for 14% (10% in the first nine months of 2022) of total Group revenues.

The margin recovery continued also in the third quarter, resulting in an EBITDA for the first nine months at euro 276 million (euro 172 million in the first nine months of 2022), with an EBITDA margin of 5.1% (3.2% as of September 30, 2022 and 3.0% as of December 31, 2022). As well known, 2022 was significantly impacted by inflation, the lower margin recorded by the Infrastructure business due to the review perused by the management and the write-down of work in progress to reflect the re-assessment of a client credit rating. 2023 EBITDA at 5% is confirmed.

Order intake stands at euro 4.0 billion, up by 23.0% compared to September 30, 2022 (euro 3.3 billion), mainly supported by a strong contribution from the offshore wind sector, with a book to bill ratio above 1 in the third quarter.

Shipbuilding

9M 2023 Shipbuilding revenues stand at euro 4,354 million, down by 5.3% compared to the same period of 2022, in line with expectations. Cruise business accounts for euro 2,890million (euro 3,031 million as of September 30, 2022) and Naval for euro 1,421 million (euro 1.515 million as of September 30, 2022). The remaining 43 millionrevenues refer to Ship Interiors business area with external clients (euro 54 million as of September 30, 2022). Cruise and Naval account respectively for 49% and 24% of the Group revenues, with a lower contribution when compared to the same period of 2022 (respectively 53% and 26%).

Cruise revenues in the first nine months of 2023 decreased by 4.6% compared to the same period of 2022, reflecting the positive effect related to the consolidation of production volumes of the Groups’ Italian shipyards, as well as Vard's backlog in the Cruise business. As detailed in the following section, this shortage is fully offset by a strong demand in the offshore wind.

The Naval revenues, down by 6.2%, is in line with the development of the backlog in Italy, reflecting the progress in the Italian Navy's fleet renewal program with the delivery of the third Multipurpose Offshore Patrol Vessel (PPA) in September 2023, as well as the program for the Qatar Ministry of Defense, with the delivery of the fourth and last corvette in May 2023. U.S. shipyards record increasing production volumes, underpinned by the development of the Constellation FFG-62 and the Foreign Military Sales programs between the U.S. and Saudi Arabia for the supply of the Littoral Combat Ship (LCS), as well as the commercial business (LNG barge).

Shipbuilding EBITDA stands at euro 256 million as of September 30, 2023 (euro 288 million as of September 30, 2022). EBITDA margin at5.9%, improving compared to December 31, 2022 (EBITDA margin 5.3%) and in line with 2023 target. EBITDA margin at 6.3% as of September 30, 2022 was not affected by the cruise ships’ whole-life costs adjustment, carried out in the fourth quarter of 2022 due to the further increase in raw material inflation, especially energy. Marginality is also impacted by lower production volumes in the naval business and higher incidence of overhead costs on the related construction activities, along with the write down of work in progress reflecting the re-assessment of a client credit rating.

Shipbuilding orders intake, at euro 2,752 million and up 12.6% compared to the same period of 2022, is driven by the naval business and in particular: i) the fourth unit of the Constellation program (FFG-62) for the US Navy, ii) the third submarine of the U212NFS (Near Future Submarine) program for the Italian Navy (MMI), iii) 3 OPVs, plus another three under option, for the Italian Navy awarded to the JV with Leonardo, Orizzonte Sistemi Navali, and iv) the mid-life upgrade of the Italian and French Horizon class frigates assigned to Naviris and Eurosam.

Offshore and Specialized vessels

Offshore and Specialized vessels revenues in the first nine months of 2023 stand at euro 710 million, spiked by 28.2% when compared to 9M 2022. This entails the contribution of the production activities carried out in the Romanian shipyards, previously included in Shipbuilding and which since 2023 are part of Offshore and Specialized vessels. Net of the latter, revenues stand at euro 581 million, up by 5% compared to the same period of the previous year (euro 554 million), and does not yet benefit from the significant order intake secured in the period.

Offshore EBITDA as of September 30, 2023 amounts to euro 31 million (euro 15 million as at September 30, 2022), with an EBITDA margin of 4.3% (2.7% at September 30, 2022), and is in line with Vard's marginality recovery path. As stated in the Business Plan, in the following years it is expected a further growth, underpinned by the positive momentum of the offshore wind market.

Order intake in the Offshore and Specialized Vessels is equal to euro 887 million, up by 64.0% compared to the same period of the previous year, furthering the increase of the Group order intake, mainly thanks to the strong contribution from the offshore wind.

Equipment,Systems and Infrastructure

Revenues from Equipment, Systems and Infrastructure amount to euro 789 million, up by 35.3% compared to the same period of 2022. The increase is mainly sustained by Infrastructure, up by 158.6% compared to the first nine months of 2022 (euro 145 million), and mostly reflects the further development of the production activities of the Miami terminal for MSC. Mechatronics revenues are impacted by the postponement of some programs, with a drop of about 5.6% compared to September 30, 2022.

Segment EBITDA as of September 30, 2023 stands at euro 21 million, significantly improving versus the first nine months of 2022, with an EBITDA margin at 2.7% (negative for 17.2% as of September 30, 2022). The thorough review of the Infrastructure production activities carried out last year let the marginality hold steadily, closing at break-even, despite the significant increase in volumes during the period.

Electronics, on the other hand, reflects the product portfolio review and the related commercial strategy, launched in the third quarter, with a moderate acquisition of new projects as well as a delay to 2024 of some public tenders scheduled for 2023. These effects resulted in a lower overhead cost coverage. Mechatronics records a positive margin of 8.5%, with an upward performance compared to the previous quarters.

Order intake in the Equipment, Systems and Infrastructure segment increased to euro 667 million, up by 43.1% when compared to September 2022, mainly driven by Infrastructure business.

BALANCE SHEET

Net fixed capital at euro 2,528 million as of September 30, 2023, increasing by euro 29 million compared to December 31, 2022 (euro 2,449 million) mainly driven by investments over the period.

Net working capital is positive for euro 710 million (positive for euro 618 million as of December 31, 2022) with an increase of euro 92 million related to the increase of construction contracts and clients’ advances (euro 96 million) as an effect of the volumes generated in the period.

Consolidated Net financial position is negative at euro 2,705 million (euro 2,531 million as of December 31, 2022). The increase is mainly due to the capital expenditures of the period. Consolidated Net financial position is still influenced by the strategy of the deferrals granted to clients after the COVID-19 pandemic outbreak. The Group has in place, as of September 30, 2023, non-current financial receivables granted to its clients for euro 94 million. Net financial position as of September 30, 2023 is in line with 2023 forecast.

OTHER INDICATORS

 DELIVERIES

BUSINESS OUTLOOK

The Cruise sector recorded passenger volumes above pre-covid levels during the summer, confirming the rebound of the cruise industry's long-term growth path. This trend, in combination with the rising interest in green and increasingly technological products, is the key driver for the recovery of new cruise ships’ demand in a still volatile and high interest rates scenario.

With regard to Defense, the geopolitical pressures that are dominating the world scene continue to support investments, including the maritime. In particular, the underwater domain is becoming increasingly important due to the presence of critical infrastructure, resources and assets. This, in combination with defense budgets that have been revised upward, is opening up new potential opportunities for Fincantieri.

As per the Offshore industry, despite high inflation and rising interest rates impact on costs and the timing of wind farm investments, the underlying fundamentals supporting long-term growth in the offshore wind sector are confirmed, especially for the floating. Investments in new generation units characterized by high efficiency levels, flexibility and increasingly lower environmental impact are driven by Government policies sustaining offshore wind and also fostered by the high level of activity in Oil&Gas limiting the shift of assets between the two segments.

The Group continues its activities to pursue operational excellence in the execution of the backlog.

To achieve this goal, the Group is implementing specific actions have to ensure the strengthening of the workforce and the supply chain, in line with the needs of production activities while managing operational risks.

In particular, in the first nine months of 2023 the Group set out the initiatives aiming at:

• increasing operational efficiency and modernising shipyards, including the launch of production, maintenance and logistics automation projects
• containing procurement costs of materials and services, as well as production costs, developing the partnership model with the supply chain as presented during the Supplier Summit
• following thoroughly the path set by the sustainability targets, along with the energy and digital transition

For 2023 Fincantieri confirms business volume expectations with revenues substantially in line with 2022 levels, while ensuring a marginality of approximately 5%.

The Net financial position for 2023 is expected to be in line with the 2022 and reflects both cruise dynamics and the cash absorption from some Offshore and Specialized vessels and Infrastructure projects to be delivered in early 2024.