Fincantieri

Investor Presentation • Jul 27, 2018

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," "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.

Declaration of the Manager responsible for preparing financial reports

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.

1H 2018 Key Messages

• 1H 2018 revenues up 10% vs 1H 2017, EBITDA at €183 mln (+25%), EBITDA margin at 7.3% (up 16% compared to 6.3% in 1H 2017); Adjusted profit of €39 mln (+39%)
• Total backlog(1) at record €29.8 bln amounting to ~ 6 times 2017 revenues:
• − Backlog at €22 bln (99 ships) up from €20.4 bln in 1H 2017, with scheduled deliveries until 2026
• − Soft backlog(2) at €7.8 bln (€5.1 bln in 1H 2017)
• Commercial success with the acquisition, in the first six months of the year, of firm orders and options for 9 cruise ships
• In July 2018, a new order from Tui Cruises for two LNG propelled cruise ships was acquired, an MOA with Princess Cruises for two LNG fuelled ships was signed and an option for two additional Leonardo Class ships for NCL was exercised. In addition, VARD acquired orders for three additional expedition cruise vessels
• Sound operating performance in Shipbuilding with the delivery of six units (four cruise and two naval vessels)
• VARD's shareholders approved the delisting of the company
• Signed a share purchase agreement with the French state for the acquisition of 50% (+1% loan) of the share capital of STX France
• Net debt at €264 mln (vs €314 mln at FY17)

1H 2018 main orders

Orders acquired in Q2

		Vessel		Client	Delivery
			2 Cruise ships	Viking Ocean Cruises	2022-2023
Shipbuilding			1 Cruise ship	Silversea Cruises	2021
	Offshore		2 Expedition cruise vessels	Ponant	2020
			1 Cable laying vessel	Prysmian	2020
			3 Offshore Patrol Vessels	Norwegian Defence Materiel Agency	2022-2024

1H 2018 main deliveries

Deliveries in Q2

	Vessel		Client	Delivery
		Cruise ship "Carnival Horizon"	Carnival Cruise Line (Carnival Corporation)	Monfalcone
		Oceanographic vessel "Kronprins Haakon"	Institute of Marine Research	Riva Trigoso - Muggiano
		Cruise ship "Seabourn Ovation"	Seabourn Cruise Line	Sestri Ponente
Shipbuilding		Cruise ship "MSC Seaview"	MSC Cruises	Monfalcone
		Cruise ship "Viking Orion"	Viking Ocean Cruises	Ancona
		FREMM "Martinengo"	Italian Navy	Muggiano
		10 Module Carrier Vessels	9 for Topaz Energy and Marine; 1 for Kazmortransflot	Vard Braila Vard Vung Tau
Offshore		Expedition cruise vessel "Le Laperouse"	Ponant	Vard Ålesund

Order intake and backlog – by segment

(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

Backlog deployment – by segment and end market

(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) Ships with length > 40 m

(3) Offshore business generally has shorter production times and, as a consequence, shorter backlog and quicker order turnaround than Cruise and Naval

Revenues – by segment and end market

Breakdown by segment and end market(1)

(1) Breakdown calculated on total revenues before eliminations

Comments

• Shipbuilding

• − Growth of revenues in cruise, standing at 46.4% of Group's total (4 units delivered and 9 units under construction vs. 3 units delivered and 11 units under construction in 1H 2017)
• Offshore
• − Ongoing implementation of diversification strategy, which generated an increase in production volumes especially in Romanian yards; 25.9% increase vs 1H17
• − Negative effect of NOK/EUR exchange rate (€25 mln)
• Equipment, Systems and Services
• − 41.4% increase vs 1H17 thanks to workload related to the Italian Navy fleet renewal program and the Qatari Ministry of Defense order

EBITDA(1) by segment

(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) extraordinary wages guarantee fund – Cassa Integrazione Guadagni Straordinaria, (viii) expenses for corporate restructuring, (ix) accruals to provision and cost of legal services for asbestos claims, (x) other non recurring items

Net result

Adjusted net result (1) Comments

€ mln	1H 2017	1H 2018
A Net result before extraordinary and non recurring items(1)	28	39
Attributable to owners of the parent	30	45
B Extraordinary and non recurring items gross of tax effect	(22)	(32)
C Tax effect on extraordinary and non recurring items	5	8
A + B + C Net result	11	15

• The result before extraordinary and non recurring items reflects
• − Improvement of operating performance and margin
• − Increased finance expenses at €52 mln (vs €39 mln in 1H 2017), due to increased unrealized foreign exchange losses (€9 mln), mostly related to a Vard Promar loan in Brazil, and to the uptick in production volumes
• − Extraordinary and non recurring items gross of tax effect at €32 mln including: provision for litigation (€33 mln), of which €32 mln for asbestos claims (vs. €19 mln in 1H 2017), and costs for VARD restructuring measures (€3 mln); such costs were partially offset by an extraordinary event which brought in €4 mln

Capital expenditures

Net working capital(1)

Breakdown by main components Comments

Net working capital	(120)	(198)
Provisions for risks &
	(1,748)	(1,595)
Construction loans
Other current assets and liabilities	(624)	(488)	€136 mln) entirely attributable to VARD
Trade receivables	909	601	• Construction loans at €488 mln (down
		584	due to the cash-in of final payments for the cruise ships delivered in the period
Work in progress net of			• Decrease of Trade receivables mainly
	835		advances from customers, due to the deliveries occurred in the period
Inventories and advances to			• Decrease of Work in progress net of
	FY 2017	(198) 1H 2018	• Net working capital at €(198) mln, from €(120) mln in FY 2017
	suppliers advances from customers Trade payables charges	648 1 (141)	852 3 (155)

• €(120) mln in FY 2017
• Decrease of Work in progress net of advances from customers, due to the deliveries occurred in the period
• Decrease of Trade receivables mainly due to the cash-in of final payments for the cruise ships delivered in the period
• Construction loans at €488 mln (down €136 mln) entirely attributable to VARD

(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

Net financial position(1)

(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

Outlook

2018 Guidance

Business

Plan Guidance Shipbuilding • Full year results expected to be in line with 2018-2022 Business Plan targets

• Expected delivery of 5 units, of which 1 cruise ship and 4 naval vessels
• Italian Navy's fleet renewal program fully operational
• Start of production activities related to the Qatari order

Offshore

• Continuation of Vard's construction activities related to the backlog acquired as a result of the diversification strategy
• Continued focus on execution aimed at recovering margins in the medium term
• Persisting crisis of the Oil&Gas sector could impact on order intake and backlog

Equipment, Systems & Services

• Confirmation of the growth trend, thanks to:
• ‒ Backlog deployment related to the Italian Navy's fleet renewal program and to the Qatari order
• ‒ Higher volumes for the production of cabins and public areas driven by growth of the cruise sector

• 2018 guidance confirmed

• ‒ Revenue increase 3-6% vs. 2017
• ‒ EBITDA margin approx. 7.5%
• ‒ Net debt at approx. €0.4-0.6 bln

Investor Relations contacts

Investor Relations Team

Cristiano Pasanisi – VP Group Treasury, Corporate Finance & Investor Relations +39 040 319 2375 cristiano.pasanisi@fincantieri.it

Matteo David Masi – Head of Investor Relations +39 040 319 2334 matteodavid.masi@fincantieri.it

Alberta Michelazzi +39 040 319 2497 alberta.michelazzi@fincantieri.it

Institutional Investors

investor.relations@fincantieri.it

Individual Shareholders

azionisti.individuali@fincantieri.it

www.fincantieri.com

Q&A

Appendix

1H 2018 results by segment

Shipbuilding

Offshore

Equipment, Systems and Services

Shipbuilding

• Revenues: €1,892 mln, up 7.7 % vs 1H 2017
• − Growth of volumes in cruise reaching 46.4 % of total Group revenues (4 units delivered and 9 units under construction vs. 3 units delivered and 11 units under construction in 1H 2017)
• EBITDA: €160 mln, margin at 8.5 %
• − Further improvement due to the construction of cruise ships at higher margins and to the positive contribution of Italian Navy's fleet renewal program
• Capex: €27 mln
• Orders: €1,132 mln vs €3,872 mln in 1H 2017
• − 2 cruise ships for Viking Ocean Cruises
• − 1 cruise ship for Silversea Cruises
• Backlog: €19,496 mln vs €18,512 mln in 1H 2017
• Deliveries: 6 ships
• − "Carnival Horizon" for Carnival Cruise Line
• − Oceanographic vessel "Kronprins Haakon" for Norwegian Institute of Marine Research
• − "Seabourn Ovation" for Seabourn Cruise Line
• − "MSC Seaview" for MSC Cruises
• − "Viking Orion" for Viking Ocean Cruises
• − FREMM "Martinengo" for the Italian Navy

Offshore

Comments

• Revenues: €564 mln, up 25.9% vs 1H 2017
• − Despite negative effect of EUR/NOK exchange rate (€25 mln)
• − Ongoing implementation of diversification strategy, which generated an increase in production volumes especially in Romanian yards
• EBITDA: €7 mln, with margin at 1.2 %
• − Reflects the continuing process of adjustment of the production structure to the challenges of the portfolio diversification efforts
• Capex: €9 mln
• Orders: €1,106 mln vs €379 mln in 1H 2017
• − 2 expedition cruise vessels for Ponant
• − 1 cable laying vessel for Prysmian
• − 3 OPVs for Norwegian Defence Materiel Agency
• Backlog: €1,990 mln vs €1,403 mln in 1H 2017
• Deliveries:
• − 10 Module Carrier Vessels: 9 for Topaz Energy and Marine, 1 for Kazmortransflot
• − 1 PSV unit to Island Offshore Shipping AS
• − 1 OSCV unit to Dofcon Navegação
• − 1 expedition cruise vessel to Ponant
• − 1 fishing unit to Nordland Havfiske AS

Equipment, Systems and Services

Profit & Loss and Cash flow statement

Profit & Loss statement (€ mln)	FY 2017	1H 2017	1H 2018
Revenues	5,020	2,295	2,527
Materials, services and other costs	(3,742)	(1,671)	(1,855)
Personnel costs	(909)	(462)	(482)
Provisions(1)	(28)	(16)	(7)
EBITDA	341	146	183
Depreciation, amortization and impairment	(120)	(58)	(65)
EBIT	221	88	118
Finance income / (expense)(2)	(83)	(39)	(52)
Income / (expense) from investments	(5)	(1)	1
Income taxes(3)	(42)	(20)	(28)
Net result before extraordinary and non recurring items	91	28	39
Attributable to owners of the parent	95	30	45
Extraordinary and non recurring items(4)	(49)	(22)	(32)
Tax effect on extraordinary and non recurring items	11	5	8
Net result for the period	53	11	15
Attributable to owners of the parent	57	13	21
Cash flow statement (€ mln)	FY 2017	1H 2017	1H 2018
Beginning cash balance	220	220	274
Cash flow from operating activities	532	122	99
Cash flow from investing activities	(168)	(81)	(35)
Cash flow from financing activities	(299)	(110)	278
Net cash flow for the period	65	(69)	342
Exchange rate differences on beginning cash balance	(11)	(7)	2
Ending cash balance	274	144	618

(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) Includes interest expense on construction loans for € 7 mln in 1H 2017, € 24 mln in FY 2017 and € [●] mln in 1H 2018
• (3) Excluding tax effect on extraordinary and non recurring items
• (4) Extraordinary and non recurring items gross of tax effect

Balance sheet

Balance sheet (€ mln)	FY 2017	1H 2017	1H 2018
Intangible assets	582	583	625
Property, plant and equipment	1,045	1,049	1,031
Investments	53	55	51
Other non-current assets and liabilities	122	42	72
Employee benefits	(59)	(58)	(58)
Net fixed assets	1,743	1,671	1,721
Inventories and advances	835	575	852
Construction contracts and advances from customers	648	1,594	584
Construction loans	(624)	(970)	(488)
Trade receivables	909	449	601
Trade payables	(1,748)	(1,426)	(1,595)
Provisions for risks and charges	(141)	(130)	(155)
Other current assets and liabilities	1	114	3
Net working capital	(120)	206	(198)
Assets held for sale including related liabilities	-	-	-
Net invested capital	1,623	1,877	1,523
Equity attributable to Group	1.237	1,165	1,201
Non-controlling interests in equity	72	81	58
Equity	1,309	1,246	1,259
Cash and cash equivalents	(274)	(144)	(618)
Current financial receivables	(35)	(34)	(30)
Non-current financial receivables	(123)	(128)	(130)
Short term financial liabilities	482	418	733
Long term financial liabilities	264	519	309
Net debt / (Net cash)	314	631	264
Sources of financing	1,623	1,877	1,523