Fincantieri — Earnings Release 2017

Nov 10, 2017

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, Carlo Gainelli, declares that the accounting information contained herein correspond to document results, books and accounting records.

9M 2017 Key Messages

• 9M 2017 results in line with Business Plan 2016-2020 targets: revenues up 10.7% vs 9M 2016 and EBITDA margin at 6.5% vs 5.7% 9M 2016
• Total backlog(1) at € 25.3 bln covering ~6 years of work if compared to 2016 revenues:
• − Backlog at € 20.3 bln (97 ships) up from € 19.0 bln in 9M 2016 thanks to the conversion of soft backlog into firm orders
• − Soft backlog(2) at € 5.0 bln (€ 2.8 bln in 9M 2016)
• Further commercial developments in cruise business with the conversion into order of a MoA for one cruise ship for the Princess Cruise brand, an order with Silversea for one cruise ship, a MoA with Carnival for one cruise ship for the luxury brand Cunard, for a total of 14 cruise ships (including options) acquired in 2017, in addition to a contract for the lengthening of the Silver Spirit ship
• Good operating performance confirmed with the delivery of nine units in the Shipbuilding segment:
• − Four cruise ships: "Viking Sky", "Majestic Princess", "Silver Muse" and "Viking Sun"
• − Three naval vessels: FREMM "Rizzo", submarine "Romeo Romei" for Italian Navy and the LCS 9 for US Navy
• − Two ATB units (Articulated Tug and Barge) for the transport of goods in the chemical/petroleum sector
• The cooperation agreement reached between the Italian and French governments will lead to the creation of a global leader in civil and military shipbuilding

9M 2017 main orders

Orders acquired in Q3

	Vessel		Client	Delivery
	TBU	4 cruise ships	Norwegian Cruise Line	2022-2025
		1 cruise ship	Holland America Line (Carnival Corporation)	2021
Shipbuilding		1 cruise ship (sixth "Royal Princess" class vessel)	Princess Cruises (Carnival Corporation)	2022
		1 cruise ship	Silversea Cruises	2020
		1 krill fishing vessel	Aker BioMarine	2018
		1 live fish transportation vessel	Fjordlaks Aqua	2018
Offshore		1 research expedition vessel	Rosellinis Four-10 (wholly-owned by the industrialist Kjell Inge Røkke)	2020
		1 expedition cruise vessel	Coral Expeditions	2019

9M 2017 main deliveries (1/2)

Deliveries in Q3

	Vessel		Client	Delivery
Shipbuilding		Cruise ship "Viking Sky"	Viking Ocean Cruises	Ancona
		Cruise ship "Majestic Princess"	Princess Cruises (Carnival Corporation)	Monfalcone
		Cruise ship "Silver Muse"	Silversea Cruises	Sestri Ponente
		FREMM "Rizzo"	Italian Navy	Muggiano
		Submarine "Romeo Romei"	Italian Navy	Muggiano
		Cruise ship "Viking Sun"	Viking Ocean Cruises	Ancona
		Littoral Combat Ship "Little Rock" (LCS 9)	US Navy	Marinette

9M 2017 main deliveries (2/2)

Deliveries in Q3

	Vessel		Client	Delivery
Offshore		OSCV "Skandi Buzios"	Techdof	Vard Søviknes
		OSCV "Far Superior"	Farstad	Vard Vung Tau
		OSCV "Skandi Vinland"	DOF	Vard Langsten
		2 Module Carrier Vessels	Topaz Energy and Marine	Vard Vung Tau
		2 Module Carrier Vessels	Kazmortransflot	Vard Braila

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
• (3) For comparison purposes, 9M 2016 figures are restated following the redefinition of operating segments. Following the operational reorganization carried out in November 2016, the repair & conversion services, cabins & public areas business, as well as integrated systems business, all previously included in the Shipbuilding segment, have been relocated to the Equipment, Systems & Services segment starting from FY 2016 results.

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

(2) Breakdown calculated on total revenues before eliminations

(3) For comparison purposes, 9M 2016 figures are restated following the redefinition of operating segments. Following the operational reorganization carried out in November 2016, the repair & conversion services, cabins & public areas business, as well as integrated systems business, all previously included in the Shipbuilding segment, have been relocated to the Equipment, Systems & Services segment starting from FY 2016 results. (4) Other costs

Shipbuilding

(1) For comparison purposes, 9M 2016 figures are restated following the redefinition of operating segments. Following the operational reorganization carried out in November 2016, the repair & conversion services, cabins & public areas business, as well as integrated systems business, all previously included in the Shipbuilding segment, have been relocated to the Equipment, Systems & Services segment starting from FY 2016 results.

Offshore

Revenues				Comments
€ mln	723	666		• Revenues: € 666 mln, down 8% vs 9M 2016 − Reduction of workload at Norwegian and Brasilian yards − Positive effect of NOK/EUR exchange rate (€ 10 mln) • EBITDA: € 33 mln, with margin at 4.9% − Margins still do not yet fully benefit from the
	9M 2016	9M 2017		business diversification initiatives • Capex: € 28 mln
EBITDA € mln				− Upgrades at Tulcea yard
	37	5.1% 33	4.9% % of Revenues	• Orders: € 486 mln vs € 1,084 mln in 9M 2016 − 3 fishing vessel (1 for Aker BioMarine, 1 for Fjordlaks Aqua; 1 for Rosellinis Four-10) − 2 Car- and Passenger Ferries for Torghattan Nord − 1 Pelagic Trawler for Research Fishing Company
	9M 2016	9M 2017		− 1 Expedition Cruise Vessel for Coral Expeditions
Capex				• Backlog: € 1,300 mln vs € 1,501 mln in 9M 2016
€ mln	19	28 2.6%	4.2% % of Revenues	• Deliveries: 7 ships − "Skandi Buzios" for Techdof − "Far Superior" for Farstad − "Skandi Vinland" for DOF − "Topaz Amur" and "Topaz Belaya" for Topaz Energy and Marine
	9M 2016	9M 2017		− "Barys" and "Berkut" for Kazmortransflot

Equipment, Systems and Services

(1) For comparison purposes, 9M 2016 figures are restated following the redefinition of operating segments. Following the operational reorganization carried out in November 2016, the repair & conversion services, cabins & public areas business, as well as integrated systems business, all previously included in the Shipbuilding segment, have been relocated to the Equipment, Systems & Services segment starting from FY 2016 results.

Net working capital and net debt(1)

Breakdown by main components Comments

Net debt

€ mln	FY 2016	9M 2017	• Net working capital and net debt dynamics related to the production
Inventories and advances to suppliers			volumes in cruise and the cash-in of
Work in progress net of advances from customers	590	814	the final installments for the cruise ships delivered during the period
Trade receivables	604	1.136	• Construction loans at € 868 mln of which € 615 mln related to VARD and
Other current assets and liabilities	1.123 59	598 51	€ 253 mln related to Fincantieri
Construction loans	(678)	(868)	• Most of the Group's debt is related to the financing of current assets
Trade payables Provisions for risks & charges	(1.307) (126)	(1.526)	associated with cruise ships construction and therefore consistent with net working capital changes
		(134)
Net working capital	265	71

• dynamics related to the production volumes in cruise and the cash-in of the final installments for the cruise ships delivered during the period
• Construction loans at € 868 mln of which € 615 mln related to VARD and € 253 mln related to Fincantieri
• Most of the Group's debt is related to the financing of current assets associated with cruise ships construction and therefore consistent with net working capital changes

(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

615 501

Outlook

Shipbuilding

• Further increase of revenues in the last quarter of 2017
• ‒ Delivery of a prototype for MSC, the largest ship ever built in Italy
• ‒ Italian Navy's fleet renewal program fully operational
• ‒ Full swing of design activities related to the Qatari order

Offshore

• Crisis persisting in the Oil&Gas sector, although the first signs of a recovery in E&P investments

2017 Guidance

• VARD continues to implement the diversification actions already begun, as well as focusing on the products with greatest potential in its reference markets

Equipment, Systems & Services

• Further increase of revenues in the last quarter of 2017
• Deployment of the significant backlog related to the Italian Navy's fleet renewal program and to the Qatari order
• Commercial and organizational actions will be implemented to ensure stronger foothold and development of the after sales business in the cruise ship segment and in the most important geographical areas

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