Investor Presentation • Jul 31, 2020
Investor Presentation
Open in ViewerOpens in native device viewer
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," "plans," "estimates," "aims," "foresees," "anticipates," "targets," and similar expressions. The forward-looking statements contained in this Presentation, including assumptions, opinions and views of the Company or cited from third party sources, are solely opinions and forecasts reflecting current views with respect to future events and plans, estimates, projections and expectations which are uncertain and subject to risks. Market data used in this Presentation not attributed to a specific source are estimates of the Company and have not been independently verified. These statements are based on certain assumptions that, although reasonable at this time, may prove to be erroneous. By their nature, forward-looking statements involve a number of risks, uncertainties and assumptions that could cause actual results or events to differ materially from those expressed or implied by the forward-looking statements. If certain risks and uncertainties materialize, or if certain underlying assumptions prove incorrect, Fincantieri may not be able to achieve its financial targets and strategic objectives. A multitude of factors which are in some cases beyond the Company's control can cause actual events to differ significantly from any anticipated development. Forward-looking statements contained in this Presentation regarding past trends or activities should not be taken as a representation that such trends or activities will continue in the future. No one undertakes any obligation to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise. Market data used in this Presentation not attributed to a specific source are estimates of the Company and have not been independently verified. Forward-looking statements speak only as of the date of this Presentation and are subject to change without notice. No representations or warranties, express or implied, are given as to the achievement or reasonableness of, and no reliance should be placed on, any forward-looking statements, including (but not limited to) any projections, estimates, forecasts or targets contained herein.
Fincantieri does not undertake to provide any additional information or to remedy any omissions in or from this Presentation. Fincantieri does not intend, and does not assume any obligation, to update industry information or forward-looking statements set forth in this Presentation. This presentation does not constitute a recommendation regarding the securities of the Company.
Pursuant to art. 154-BIS, par. 2, of the Unified Financial Act of February 24, 1998, the executive in charge of preparing the corporate accounting documents at Fincantieri, Felice Bonavolontà, declares that the accounting information contained herein correspond to document results, books and accounting records.
| • No cancelled orders thanks to effective backlog preservation strategy |
|
|---|---|
| COVID-19 | • Slowdown of the production schedule and postponement of deliveries has impacted revenues (-15.6% YoY) |
| update | • 3 cruise ships scheduled for delivery from Italian shipyards in 2H 2020 |
| 20th, • Production activities gradually resumed in all the Italian shipyards starting from April 2020 |
|
| 30th • As of June , 90% of production staff safely back at work |
|
| Business update |
• 10 ships delivered from 7 shipyards, among which 3 cruise ships, 1 fishery and 1 naval vessel • Ongoing diversification strategy: • in infrastructures, electronics, and cyber security, as well as complete accommodation in the cruise segment, contributing to revenue growth in the ESS (1H 2020 revenues +5.7%) • new orders acquired in the renewable energy sector (1 Service Operation Vessel), 2 fishing vessels, 1 order and 1 agreement for the Port of Rapallo and the «Renato Dall'Ara» Stadium respectively • Total backlog(1) with 117 units at €37.9 bln: backlog at ~ €28 bln and soft backlog(2) €9.9 bln |
| Financials | 2019(3) • Revenues at €2,369 mln (down 15.6% vs 1H ): €790 mln shortfall in revenues due to production downtime 2019(3) • EBITDA at €119 mln (€227 mln in 1H ) and EBITDA margin at 5.0% (8.1% in 1H 2019): shortfall in EBITDA contribution of €65 mln • Adjusted net result €(29) mln and net result €(137) mln, with COVID-19 related extra-ordinary costs of €114 mln • Net debt(4) at €980 mln mainly due to the postponed delivery of one cruise vessel to 2H |
| Sum of backlog and soft backlog |
(2) 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 (3) Restated following the disposal of small fishery and aquaculture support vessels business and the closure of the Aukra yard, as well as the riallocation of VARD Electro
from the Offshore and Specialized Vessels segment to the Shipbuilding
(4) Excluding Construction loans
(1) Carbon Disclosure Project is a British organization whose goal is to improve the management of environmental risks. In 2019, Fincantieri obtained the B rating on a scale ranging from D (minimum) to A (maximum)
| Segment | Vessel | Client | # of ships |
Expected Delivery |
|---|---|---|---|---|
| Shipbuilding | FFG(X) first-in-class frigate | US Navy | 1 | 2026 |
| Offshore & Specialized Vessels |
Fishing vessel | Framherij | 1 | 2022 |
| Fishing | Nergard Havfiske | 1 | 2022 | |
| Service operation vessel |
Ta San Shang Marine |
1 | 2022 |
| Segment | Vessel | Client | Shipyard |
|---|---|---|---|
| Shipbuilding | Cruise ship "Seven Seas Splendor" | Regent Seven Seas Cruises | Ancona |
| Cruise ship "Scarlet Lady" | Virgin Cruises | Genova | |
| Littoral Combat Ship "St. Louis" (LCS 19) |
US Navy | Marinette | |
| Expedition cruise vessel "Le Bellot" | Ponant | Vard Soviknes | |
| Fishing vessel | Finnmark Havfiske |
Vard Soviknes | |
| Offshore & Specialized Vessels |
Fishing vessel | Nergard Havfiske | Vard Brattvaag |
| OSCV | Island Offshore XII Ship | Vard Langsten | |
| Ferry | Boreal Sjø | Vard Langsten | |
| Aqua | Remøybuen | Vard Langsten | |
| Ferry | Boreal Sjø | Vard Langsten |
Source: Congressional Research Service. Navy Frigate (FFG[X]) Program: Background and Issues for Congress. Updated June 26, 2020
(2) The contract also involves post-delivery availability support and crew training
In 2018, FMM was awarded a \$15 mln contract for the study of a customized version of its FREMM project
Seven Seas Splendor (Regent) Scarlet Lady (Virgin Voyages) Le Bellot (Ponant)
LCS 19 "St. Louis" (US Navy) Ferry (Boreal Sjø) Island Victory (Island Offshore)
(1) Sum of backlog and soft backlog
(2) 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
(3) Restated following the riallocation of VARD Electro from the Offshore and Specialized Vessels segment to the Shipbuilding
(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) Offshore & Specialized Vessels business generally has shorter production times and, as a consequence, shorter backlog and quicker order turnaround than Cruise and Naval
:
(1) Breakdown calculated on total revenues before eliminations
(2) Restated following the disposal of small fishery and aquaculture support vessels business and the closure of the Aukra yard, as well as the riallocation of VARD Electro from the Offshore and Specialized Vessels segment to the Shipbuilding
(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
(2) Restated following the disposal of small fishery and aquaculture support vessels business and the closure of the Aukra yard, , as well as the riallocation of VARD Electro from the Offshore and Specialized Vessels segment to the Shipbuilding
• EBITDA at € 119 mln (-47.5% YoY) and EBITDA margin at 5.0% (8.1% in 1H 2019)
Adjusted Net result(1)
(1) Net result before extraordinary and non-recurring items
| € mln | FY 2019 | 1H 2020 |
|---|---|---|
| Inventories and advances to suppliers |
828 | 876 |
| Work in progress net of advances from customers |
1,415 | 981 |
| Trade receivables | 677 125 |
1,083 |
| Other current assets and liabilities Construction loans |
(811) | 86 (1,001) |
| Trade payables Provisions for risks & charges |
(2,270) | (1,982) |
| (89) | (69) | |
| Net working capital | (125) | (26) |
(1) Construction loans are committed working capital financing facilities, treated as part of Net working capital, not in Net financial position, as they are not general purpose loans and can be a source of financing only in connection with ship contracts
14
• Increase of net debt (+244 mln vs FY 2019) mainly due to the postponement of one unit from 1H to 2H, partially offset by lower production volumes
(1) Net financial position does not account for construction loans as they are not general purpose loans and can be a source of financing only in connection with ship contracts
Caterina Venier-Romano +39 040 319 2229 [email protected]
Valentina Fantigrossi +39 040 319 2243 [email protected]
Q&A
(1) First-in-class guided missile frigate of the "FFG(X)" program for the U.S. Navy
(3) "Seven Seas Splendor" for Regent Seven Seas Cruises; "Scarlet Lady" for Virgin Voyages; "Le Bellot" for Ponant
(4) LCS 19 "St. Louis" for the US Navy
(2) Lengthening project Norwegian Cruise Line
| Profit & Loss statement (€ mln) |
FY 2019 | 1H 2019(5) | 1H 2020 |
|---|---|---|---|
| Revenues | 5,849 | 2,808 | 2.369 |
| Materials, services and other costs | (4,497) | (2,063) | (1,810) |
| Personnel costs | (996) | (504) | (432) |
| Provisions(1) | (36) | (14) | (8) |
| EBITDA | 320 | 227 | 119 |
| Depreciation, amortization and impairment | (167) | (77) | (65) |
| EBIT | 153 | 150 | 54 |
| Finance income / (expense) | (134) | (60) | (63) |
| Income / (expense) from investments | (3) | (3) | (3) |
| Income taxes(2) | (87) | (40) | (17) |
| Adjusted Net result(3) | (71) | 47 | (29) |
| Attributable to owners of the parent | (64) | 51 | (27) |
| Extraordinary and non recurring items(4) | (67) | (27) | (139) |
| Tax effect on extraordinary and non recurring items | 14 | 5 | 31 |
| Net result from continuing operations |
(124) | 25 | (137) |
| Attributable to owners of the parent | (117) | 29 | (135) |
| Net result from discontinued operations |
(24) | (13) | - |
| Net result | (148) | 12 | (137) |
| Attributable to owners of the parent |
(141) | 16 | (135) |
| Cash flow statement (€ mln) | FY 2019 | 1H 2019 | 1H 2020 |
| Beginning cash balance | 677 | 677 | 520 |
| Cash flow from operating activities | 209 | (2) | (177) |
| Cash flow from discontinued operations | (22) | (12) | - |
| Cash flow from investing activities | (310) | (118) | (123) |
| Cash flow from financing activities | (173) | 137 | 820 |
| Net cash flow for the period | (296) | 5 | 520 |
| Exchange rate differences on beginning cash balance | 1 | 2 | (5) |
| Ending cash balance | 382 | 684 | 897 |
(1) The line "Provisions and impairment" has been modified in "Provisions" and includes provisions and reversal for risks and writedowns. It excludes impairment of Intangible assets and Property, plant and equipment, which is included in "Depreciation, amortization and impairment" (previously "Depreciation and amortization"). This change had no effect on the comparative information.
(2) Excluding tax effect on extraordinary and non recurring items
(3) Net results before extraordinary and non recurring items
(4) Extraordinary and non recurring items gross of tax effect
(5) Restated following the disposal of small fishery and aquaculture support vessels business and the closure of the Aukra yard
| Balance sheet (€ mln) | FY 2019 | 1H 2019 | 1H 2020 |
|---|---|---|---|
| Intangible assets | 654 | 621 | 623 |
| Right of use | 90 | 85 | 81 |
| Property, plant and equipment | 1,225 | 1,152 | 1,230 |
| Investments | 75 | 74 | 105 |
| Other non-current assets and liabilities | (79) | (14) | (93) |
| Employee benefits | (60) | (59) | (59) |
| Net fixed assets | 1,905 | 1,859 | 1,887 |
| Inventories and advances |
828 | 807 | 876 |
| Construction contracts and advances from customers | 1,415 | 969 | 981 |
| Construction loans | (811) | (492) | (1,001) |
| Trade receivables | 677 | 647 | 1,083 |
| Trade payables | (2,270) | (1,824) | (1,982) |
| Provisions for risks and charges | (89) | (80) | (69) |
| Other current assets and liabilities | 125 | 76 | 86 |
| Net working capital | (125) | 103 | (26) |
| Net assets (liabilities) held for sale and discontinued operations |
6 | - | 6 |
| Net invested capital | 1,786 8636 |
1,962 | 1,867 858 |
| Equity attributable to Group |
1,019 | 1,216 | 858 |
| Non-controlling interests in equity | 31 | 22 | 29 |
| Equity | 1,050 | 1,238 | 887 |
| Cash and cash equivalents | 382 | 683 | 897 |
| Current financial receivables | 2 | 12 | 18 |
| Non-current financial receivables | 91 | 72 | 98 |
| Short term financial liabilities | (399) | (670) | (1,008) |
| Long term financial liabilities | (812) | (821) | (985) |
| Net debt / (Net cash) | 736 | 724 | 980 |
| Sources of financing | 1,786 | 1,962 | 1,867 |
Building tools?
Free accounts include 100 API calls/year for testing.
Have a question? We'll get back to you promptly.