Sanlorenzo — Interim / Quarterly Report 2021

Sep 13, 2021

H1 2021 FINANCIAL RESULTS

13 SEPTEMBER 2021

H1 2021 RESULTS KEEPING ON OVERPERFORMANCE PATH

STRONG H1 RESULTS, PROVING ONCE AGAIN THE SOUNDNESS OF SANLORENZO'S BUSINESS MODEL. UPWARD REVISION OF 2021 GUIDANCE TARGETING HIGH DOUBLE-DIGIT GROWTH OF ALL METRICS

• NET REVENUES NEW YACHTS AT €263.6M, +43.2% YOY, GROWING ACROSS ALL DIVISIONS AND REGIONS
• ADJUSTED EBITDA AT €40.4M, +56.8% YOY, 15.3% MARGIN ON NET REVENUES NEW YACHTS
• GROUP NET PROFIT AT €21.2M, MORE THAN DOUBLED YOY, 8.1% MARGIN ON NET REVENUES NEW YACHTS
• INVESTMENTS FOR €12.0M, OF WHICH €6.9M DEDICATED TO R&D, PRODUCT DEVELOPMENT AND SUSTAINABILITY
• STRONG CASH GENERATION, WITH €26.4M NET CASH, COMPARED TO €25.9M NET DEBT AS OF 31 MARCH 2021
• BACKLOG AS OF 31 AUGUST 2021 OVER €1.0BN, COMPARED TO €810.7M AS OF 30 JUNE 2021
• UPWARD REVISION OF GUIDANCE, SUPPORTED BY STRONG BACKLOG

NEW SL120 ASYMMETRIC (YACHT DIVISION) RECENTLY PRESENTED AT CANNES YACHTING FESTIVAL

FINANCIAL HIGHLIGHTS STRONG H1 2021

263.6 184.1 H1 2021 H1 2020 NET REVENUES NEW YACHTS (€M) ADJUSTED EBITDA (€M AND MARGIN AS % OF NET REVENUES NEW YACHTS) +43.2% 40.4 25.8 H1 2021 H1 2020 +56.8% 14.0% 15.3% 12.0 12.4 H1 2021 H1 2020 CAPEX (€M AND % OF NET REVENUES NEW YACHTS) NET CASH/(NET DEBT) (€M) -3.6% 26.4 -23.5 H1 2021 H1 2020 +€49.9M EBIT (€M AND MARGIN AS % OF NET REVENUES NEW YACHTS) 29.8 15.9 H1 2021 H1 2020 +86.9% 8.7% 11.3% GROUP NET PROFIT (€M AND MARGIN AS % OF NET REVENUES NEW YACHTS) 21.2 10.5 H1 2021 H1 2020 +101.4% 5.7% 8.1% 6.8% 4.6%

NET REVENUES NEW YACHTS

€145.6M IN Q2

SX AND SD LINES

BY STEEL LINE

+23.1% YOY

OPERATING AND NET MARGINS FURTHER INCREASE IN PROFITABILITY

COMMENTARY			EBITDA1 ADJUSTED			EBIT
	EBITDA1 ADJUSTED €40.4M: +56.8% YOY AT	(€M) 60	+56.8%	15.3%	(€M) 60	+86.9%
	(14.0% IN H1 2020) EBITDA MARGIN 15.3% AT	50	14.0%	40.4	50		11.3%
	INCREASED EFFICIENCY THANKS TO OPTIMISATION OF 	40			40	8.7%	29.8
	NEW PRODUCTION CAPACITY AND HIGHER ABSORPTION	30	25.8		30
	OF FIXED COSTS	20			20	15.9
	SHIFT IN PRODUCT MIX TOWARDS LARGER YACHTS 	10			10
	PROGRESSIVE INCREASE OF SELLING PRICES OFFSETTING 	0			0 0		0
	THE INCREASE IN COSTS OF CERTAIN RAW MATERIALS		H1 2020	H1 2021		H1 2020	H1 2021
	€29.8M: +86.9% YOY EBIT AT		PRE-TAX	PROFIT		GROUP	NET PROFIT
	(8.7% IN H1 2020), DESPITE EBIT MARGIN 11.3% AT 11.2% INCREASE D&A DUE CAPEX IN TO	(€M) 40 35	+96.1%	11.1%	(€M) 40 35		+101.4%
	PRE-TAX PROFIT €29.2M: +96.1% YOY, ALSO AT THANKS	30	8.1%	29.2	30		8.1%
	43.5% REDUCTION TO IN NET FINANCIAL EXPENSES	25			25		21.2
	GROUP NET PROFIT YOY MORE THAN DOUBLED	20	14.9		20	5.7%
	NET PROFIT MARGIN 8.1% (5.7% IN H1 2020) AT	15 10			15 10	10.5
		5			5
		0			0 0		0
			H1 2020	H1 2021		H1 2020	H1 2021
						MARGIN	(AS % OF NET REVENUES NEW YACHTS)

1. Defined as EBIT + D&A, excluding non recurring items, linked to COVID-19 related expenses and non-monetary costs of the stock incentive plans (€444k in H1 2021 and €679k in H1 2020).

CAPEX INVESTMENTS IN NEW PRODUCTION CAPACITY PLANNED IN H2

COMMENTARY		YOY COMPARISON
INVESTMENTS €12.0M: -3.6% YOY AT 	(€M AND % OF THE TOTAL FOR THE PERIOD)
INCIDENCE NET REVENUES NEW YACHTS 4.6% (6.8% IN H1 ON AT  2020)	20	-3.6% 9%
R&D, SUSTAINABILITY €6.9M: AT AND PRODUCT DEVELOPMENT  +4.8% YOY, WITH NEW MODELS AND RANGES REPRESENTING A DRIVER FOR FUTURE GROWTH	6.8%	7%
INVESTMENTS €2.3M: IN ADDITIONAL PRODUCTION CAPACITY AT  -31.9% YOY	15 12.4	4.6% 5% 12.0
ACQUISITIONS EXECUTED/PLANNED OF NEW FACILITIES ALREADY IN  €17.9M1 H2 2021 FOR SUPPORTING EXPECTED A TOTAL OF GROWTH: REVENUE	1.0 (7.8%) 10	3% 1.4 (11.5%) 1%
ACQUISITION VIAREGGIO SUPERYACHTS JULY OF SHIPYARD IN FOR  €4.8M1	6.6 (52.7%)	6.9 (57.4%) -1%
AWARD OF TENDER FOR THE ACQUISITION OF NEW FACILITY IN  €11.6M1, CLOSING MASSA SEPTEMBER FOR IN	5 1.6 (12.5%)	1.4 -3% (12.1%)
AWARD LA OF TENDER FOR THE ACQUISITION OF NEW FACILITY IN  €1.5M1, CLOSING SPEZIA SEPTEMBER FOR IN	3.4 (26.9%) 0	2.3 (19.4%) -5%
	H1 2020	H1 2021
	OTHERS	R&D AND PRODUCT DEVELOPMENT

CAPEX AS % OF NET REVENUES NEW YACHTS

NET WORKING CAPITAL EFFICIENT OPERATING CAPITAL MANAGEMENT

COMMENTARY	YOY COMPARISON
(€31.3M 30 JUNE 2020) NET WORKING CAPITAL €5.4M AS OF AT 	(€M)
INCIDENCE LTM NET REVENUES NEW YACHTS 1.0% (7.2% IN ON AT  H1 2020), INCREASING EFFICIENCY	300 250		20%
EVOLUTION NET WORKING CAPITAL OF CONSISTENT WITH BUSINESS  SEASONALITY AND GROWTH IN VOLUMES	7.2% 200	4.2%	10% 1.0%
INVENTORIES €80.5M (€82.2M 31 DECEMBER 2020 AND AT AS OF  €81.8M 30 JUNE 2020) AS OF	31.3 150	19.3 66.8	0% 5.4
(€31.0M 31 DECEMBER 2020), FINISHED €21.8M PRODUCTS AT AT  TRADE-IN INCLUDING YACHTS ALREADY SOLD AT THE CLOSE OF THE	40.7 100		43.9 -10%
€6.2M PERIOD TO BE DELIVERED IN THE FOLLOWING MONTHS FOR	81.8 50	82.2	80.5 -20%
	21.8 0	17.2	12.1
BREAKDOWN INVENTORIES 30 JUNE 2021 OF AS OF €7.2M	-50 -103.4	-137.2	-30% -126.6 -40%
8.9% RAW MATERIALS AND CONSUMABLES	-100 -9.6 -150	-9.7	-4.5 -50%
WORK IN PROGRESS AND €21.8M SEMI-FINISHED PRODUCTS 27.1%	30-JUN-20	31-DEC-20	30-JUN-21
€51.5M FINISHED PRODUCTS 63.9%	OTHERS INVENTORIES	NET ASSETS/(LIABILITIES) CONTRACT TRADE PAYABLES
	TRADE RECEIVABLES	NWC AS % OF LTM NET REVENUES NEW YACHTS

NET FINANCIAL POSITION STRONG CASH GENERATION

Note: pursuant to Consob communication no. DEM/6064293/2006, the calculation of Net Financial Position was adjusted to reflect the updates in the ESMA document 32-382-1138, 4 March 2021. The adjustments had no significant impact on the periods considered.

1. Excluding credit lines for reverse factoring and confirming.

ORDER BACKLOG AS OF 30 JUNE 2021 ROBUST ORDER INTAKE IN Q2

ORDER BACKLOG AS OF 31 AUGUST 2021 BEFORE BOAT SHOWS ACCELERATION DRIVEN BY SUPERYACHTS

MARKET UPDATE HIGH POTENTIAL FOR THE LUXURY YACHTING SECTOR

GROWING TARGET CUSTOMERS AND INCREASING WEALTH IN KEY GEOGRAPHIES, TOGETHER WITH A PENETRATION RATE OF LUXURY YACHTING OF ~3%, LEAVE ROOM FOR FURTHER MARKET EXPANSION, FAVOURED BY THE WILLINGNESS OF CUSTOMERS TO ENJOY INTIMATE AND SAFE STAYS

Source: Deloitte Boating Market Monitor (May 2019 and May 2021), World Wealth Report 2021 – Capgemini, Company information. 1. Ultra-HNWIs are defined as HNWIs with investable assets of \$30 million or more.

NEW MODELS – 2021 MULTIPLE LEVERS FOR PROFITABLE GROWTH

FOUR NEW MODELS RECENTLY LAUNCHED AT CANNES YACHTING FESTIVAL, AN UNPRECEDENTED EFFORT MADE POSSIBLE THANKS TO THE DEVELOPMENT AND PRODUCTION WORK CARRIED OUT DURING THE MOST DIFFICULT MOMENTS OF THE PANDEMIC

SL120 ASYMMETRIC – YACHT DIVISION BG72 – BLUEGAME

SD118 – YACHT DIVISION SL90 ASYMMETRIC – YACHT DIVISION

NEW RANGES – 2022 MULTIPLE LEVERS FOR PROFITABLE GROWTH

THREE NEW PRODUCT RANGES TO BE LAUNCHED IN 2022, ENTERING NEW MARKET SECTORS, ALL OFFERING NOVEL AND CROSS-SEGMENT FEATURES, HIGHLY INSPIRED BY SUSTAINABILITY PRINCIPLES

SP ("SMART PERFORMANCE") – YACHT DIVISION

X-SPACE – SUPERYACHT DIVISION

BGM (BLUEGAME MULTI-HULL) – BLUEGAME

NEW RANGES – SP110 MULTIPLE LEVERS FOR PROFITABLE GROWTH

• A STUNNING DESIGN COMBINING THE LISSONI INDOOR STYLE TOGETHER WITH THE ZUCCON OUTDOOR LINES MARKS THE ENTRY OF SANLORENZO IN THE SEGMENT OF SPORT COUPÉS
• CARBON SANDWICH LAMINATION BY INFUSION TO MAXIMIZE THE STRENGTH AND REDUCE THE TOTAL WEIGHT OF THE CONSTRUCTION
• FRACTIONED ENGINES POWER PACK TO REACH THE BEST PERFORMANCES AT THE LOWEST FUEL RATE
• SCR EXHAUST SYSTEM TO REDUCE NOX EMISSIONS
• HULL DESIGN AND WATER JET PROPULSION FOR BEST SEA KEEPING, TOP EFFICIENCY AND MANOEUVRABILITY AT ALL RANGE OF SPEED
• SOLAR PANELS POWER SUPPLY FOR THE LITHIUM BATTERY PACK TO RUN THE HOTEL LOADS

LESS WEIGHT. LESS POWER. LESS CONSUMPTION. SMART PERFORMANCE

NEW RANGES – X-SPACE MULTIPLE LEVERS FOR PROFITABLE GROWTH

• A LENGTH OF 44 METRES, FIVE DECKS AND A TONNAGE OF 495GT, EXTRAORDINARY VOLUMES FOR A YACHT OF THIS SIZE
• POSITIONED BETWEEN CLASSIC NAVETTAS (SD LINE YACHT DIVISION) AND EXPLORERS (SUPERYACHT DIVISION), X-SPACE IS DESIGNED FOR EXPERT OWNERS WHO LOVE TO EXPLORE FARAWAY DESTINATIONS, WITHOUT RELINQUISHING THE ELEGANCE OF SANLORENZO'S LINES
• ENTRY LEVEL OF THE SUPERYACHT DIVISION, TARGETED AT NEW SEGMENT OF POTENTIAL OWNERS

NEW RANGES – BGM: ULTIMATE SUSTAINABILITY PLATFORM MULTIPLE LEVERS FOR PROFITABLE GROWTH

MULTIPLE LEVERS FOR SUSTAINABLE GROWTH – RESPONSIBLE DEVELOPMENT EXCLUSIVE PARTNERSHIP WITH SIEMENS ENERGY

COLLABORATION WITH A WORLD LEADER IN ENERGY TO DEVELOP NEW SOLUTIONS TO REDUCE ENVIRONMENTAL IMPACT OF THE YACHTS, FIRST OF ITS KIND IN THE SECTOR

METHANOL FUEL CELL SYSTEMS FOR GENERATING ELECTRICITY ON BOARD	EXCLUSIVE 24-80M AGREEMENT FOR THE JOINT DEVELOPMENT OF SOLUTIONS FOR THE INTEGRATION OF FUEL CELLS IN THE  YACHTING SECTOR INNOVATIVE SECTOR, ALLOWING SOLUTION FOR THE THE VESSEL TO GENERATE ELECTRICITY WHEN THE ENGINES AND GENERATORS ARE  OFF, SIGNIFICANTLY EXTENDING THE TIME SPENT AT ANCHOR AND MANOEUVRING WITHOUT CONSUMING DIESEL FUEL OBJECTIVE "NET-ZERO GHG EMISSION" SYSTEM IS THE CREATION OF A COMPATIBLE WITH THE LIMITED SPACE AVAILABLE ON BOARD  FIRST 50M SUPERYACHT, DELIVERY 2024 PROTOTYPE TO BE INSTALLED ON A HYBRID EXPECTED IN 
NEW GENERATION DIESEL ELECTRIC PROPULSION SYSTEMS FOR YACHTS 50M OVER	AIMED GHG EMISSIONS AT REDUCING AND FUEL CONSUMPTION  SIGNIFICANT TECHNOLOGY, ALREADY MEGA-YACHTS, IN EVOLUTION OF THE CURRENT USED ON TERMS OF ENERGY EFFICIENCY AND  REDUCTION OF OVERALL DIMENSIONS TO AND, IN BE INTEGRATED WITH THE LATEST GENERATION OF LITHIUM BATTERIES AND HOTEL UTILITY MANAGEMENT SYSTEMS THE  FUTURE, ALSO WITH FUEL CELLS FOR THE GENERATION OF ELECTRICITY FIRST 50 TO 70 METRES, DELIVERY 2024 SIGNED ORDER COVERING THE APPLICATION ON THREE UNITS FROM EXPECTED BETWEEN  2025 AND
NEW GENERATION HYBRID PROPULSION SYSTEMS 50M FOR YACHTS BELOW	AIMED GHG EMISSIONS AT REDUCING AND FUEL CONSUMPTION  SIGNIFICANT TECHNOLOGY, ALREADY SUPERYACHTS, IN SIZE, COSTS EVOLUTION OF THE CURRENT USED ON TERMS OF AND EASE OF USE  TO AND, IN BE INTEGRATED WITH THE LATEST GENERATION OF LITHIUM BATTERIES AND HOTEL UTILITY MANAGEMENT SYSTEMS THE  FUTURE, ALSO WITH FUEL CELLS FOR THE GENERATION OF ELECTRICITY FIRST SD90S MODEL, DELIVERY 2022 SIGNED ORDER COVERING THE APPLICATION ON THE NEW EXPECTED IN 

2021 GUIDANCE UPWARD REVISION TARGETING HIGH-DOUBLE DIGIT GROWTH

(€M AND % OF NET REVENUES NEW YACHTS) MARGIN AS	2020 ACTUAL	2021 GUIDANCE AS OF	4 MAY 2021	2021 GUIDANCE REVISED
NET REVENUES NEW YACHTS	457.7	530 – 540	~+17%	565 – 575	~+25%
ADJUSTED EBITDA	70.6	86 – 88	~+23%	92 – 94	~+31%
ADJUSTED EBITDA MARGIN	15.4%	16.2% – 16.3%	~+85bps	16.2% – 16.3%	~+86bps
GROUP NET PROFIT	34.5	43 – 44	~+26%	47 – 48	~+36%
INVESTMENTS	30.8	42 – 44	~+40%	45 – 47	~+49%
NET FINANCIAL POSITION	3.8	14 – 16	~+11	20 – 22	~+17

NOTES:

EXCLUDING THE CONTRIBUTION FROM BUSINESS COMBINATIONS, SUCH AS THE POTENTIAL ACQUISITION OF PERINI NAVI

REFER TO NOTES IN THE APPENDIX REGARDING FORWARD-LOOKING STATEMENTS

UPDATE ON PERINI NAVI

• PERINI NAVI DECLARED BANKRUPT ON 29 JANUARY 2021, EFFECTIVELY SHUT-DOWN WITH REDUNDANCY MEASURES FOR EMPLOYEES ("CASSA INTEGRAZIONE") IN PLACE SINCE APRIL 2020
• FENIX S.R.L. (PREVIOUS OWNER OF PERINI NAVI) FILED AN APPEAL AGAINST THE BANKRUPTCY, REJECTED BY THE COURT ON 30 APRIL 2021
• SALE OF SHIPYARD IN TURKEY AWARDED AT THE END OF APRIL FOR €30.6M
• SANLORENZO AND FERRETTI GROUP ESTABLISHED A 50-50 JOINT VENTURE – RESTART S.P.A. – IN ORDER TO JOIN FORCES FOR THE POTENTIAL ACQUISITION OF PERINI NAVI'S BRAND AND ITALIAN ASSETS
• FIRST AUCTION ON 30 JULY 2021, €62.5M TOTAL STARTING PRICE, NO BIDS SUBMITTED
• NEW AUCTION ON 30 SEPTEMBER 2021, €56.25M TOTAL STARTING PRICE
• FERRETTI GROUP AND SANLORENZO STILL INTERESTED IN THE POTENTIAL TRANSACTION AT A REASONABLE PRICE, ALSO CONSIDERING THE SIGNIFICANT RESOURCES REQUIRED TO IMPLEMENT A LONG-TERM RECOVERY PLAN

"MALTESE FALCON", 88 METRES YACHT, FIRST OWNER: TOM PERKINS

SUPERIOR BUSINESS MODEL

~60 YACHTS PER YEAR

SOPHISTICATED CUSTOMERS, «CONNOISSEURS», «SANLORENZO CLUB», ~900 OWNERS BELONGING TO THE WORLD'S WEALTHIEST FAMILIES

RIGOROUSLY «MADE TO MEASURE»

TIMELESS DESIGN WITH THE UTMOST CARE FOR DETAILS

FLEXIBLE COST STRUCTURE, ~2,600-UNIT WORK FORCE, ~560+ DIRECT1 VS. ~2,000+ INDEPENDENT SPECIALIZED ARTISANS

UNIQUE DIRECT DISTRIBUTION, BRAND REPRESENTATIVE NETWORK, MOSTLY MONOBRAND2

INDUSTRY LEADER FOR INNOVATION WITH TRADITION (40ALLOY, 52STEEL, EXPLORER, SX LINE, SL102 ASYMMETRIC)

STRONG BOND WITH ART AND DESIGN (MILAN DESIGN WEEK, ART BASEL, ARCHISTARS: DORDONI, URQUIOLA, LISSONI, PAWSON, LIAIGRE)

EXPERIENCED AND PASSIONATE MANAGEMENT TEAM (MORE THAN 25 MANAGERS WITH TOTAL COMBINED ~600 YEARS OF EXPERIENCE)

APPENDIX

STRONG HERITAGE

IN LINE WITH

ITS LOYAL CUSTOMERS

FINANCIAL HIGHLIGHTS FY 2016-2020

ADJUSTED EBITDA

GROUP NET PROFIT

(€M)

(€M)

CAPEX

NET DEBT/(NET CASH)

RECLASSIFIED CONSOLIDATED INCOME STATEMENT

(€'000)		Six months ended 30 June	Change
	2021	% Net Revenues New Yachts	2020	% Net Revenues New Yachts	2021 vs. 2020	2021 vs. 2020%
Net Revenues New Yachts	263,624	100.0%	184,145	100.0%	79,479	+43.2%
Net revenues from pre-owned boats, maintenance and other services	58,379	22.1%	23,219	12.6%	35,160	+151.4%
Other income	2,160	0.8%	1,989	1.1%	171	+8.6%
Operating costs	(283,765)	(107.6)%	(183,596)	(99.7)%	(100,169)	+54.6%
Adjusted EBITDA	40,398	15.3%	25,757	14.0%	14,641	+56.8%
Non-recurring costs	(444)	(0.1)%	(679)	(0.4)%	235	-34.6%
EBITDA	39,954	15.2%	25,078	13.6%	14,876	+59.3%
Depreciation and amortisation	(10,167)	(3.9)%	(9,140)	(5.0)%	(1,027)	+11.2%
EBIT	29,787	11.3%	15,938	8.7%	13,849	+86.9%
Net financial expense	(616)	(0.2)%	(1,091)	(0.6)%	475	-43.5%
Adjustments to financial assets	1	-	30	-	(29)	-96.7%
Pre-tax profit	29,172	11.1%	14,877	8.1%	14,295	+96.1%
Income taxes	(7,825)	(3.0)%	(4,600)	(2.5)%	(3,225)	+70.1%
Net profit	21,347	8.1%	10,277	5.6%	11,070	+107.7%
Net (profit)/loss attributable to non-controlling interests	(108)	-	271	0.1%	(379)	-139.9%
Group net profit	21,239	8.1%	10,548	5.7%	10,691	+101.4%

RECLASSIFIED CONSOLIDATED STATEMENT OF FINANCIAL POSITION

(€'000)	30 June	31 December	30 June	Change
	2021	2020	2020	30 June 2021 vs 31 December 2020	30 June 2021 vs 30 June 2020
USES
Goodwill	8,667	8,667	8,667	-	-
Intangible assets with a finite useful life	41,410	36,434	35,596	4,976	5,814
Property, plant and equipment	112,832	112,491	105,692	341	7,140
Other equity investments and other non-current assets	437	412	409	25	28
Net deferred tax assets	6,221	6,538	5,020	(317)	1,201
Non-current employee benefits	(942)	(845)	(821)	(97)	(121)
Non-current provisions for risks and charges	(1,159)	(1,389)	(991)	230	(168)
Net fixed capital	167,466	162,308	153,572	5,158	13,894
Inventories	80,504	82,214	81,830	(1,710)	(1,326)
Trade receivables	12,095	17,233	21,794	(5,138)	(9,699)
Contract assets	88,186	112,938	110,167	(24,752)	(21,981)
Trade payables	(126,567)	(137,238)	(103,399)	10,671	(23,168)
Contract liabilities	(44,331)	(46,156)	(69,423)	1,825	25,092
Other current assets	33,990	30,434	32,261	3,556	1,729
Current provisions for risks and charges	(14,608)	(12,679)	(9,911)	(1,929)	(4,697)
Other current liabilities	(23,863)	(27,492)	(31,998)	3,629	8,135
Net working capital	5,406	19,254	31,321	(13,848)	(25,915)
NET INVESTED CAPITAL	172,872	181,562	184,893	(8,690)	(12,021)

SOURCES
Equity	199,306	185,391	161,387	13,915	37,919
(Net financial position)	(26,434)	(3,829)	23,506	(22,605)	(49,940)
TOTAL SOURCES	172,872	181,562	184,893	(8,690)	(12,021)

CONSOLIDATED CASH FLOW STATEMENT AND NET FINANCIAL POSITION

RECLASSIFIED CASH FLOW STATEMENT NET FINANCIAL POSITION1

(€'000)	30 June 2021	30 June 2020
EBITDA	39,954	25,078
Taxes paid	(13,389)	-
Changes in inventories	1,710	(19,519)
Change in net contract assets and liabilities	22,927	27,703
Change in trade receivables and advances to suppliers	8,638	(1,771)
Change in trade payables	(10,671)	(48,790)
Change in provisions and other assets and liabilities	(3,012)	16,090
Operating cash flow	46,157	(1,209)
Change in non-current assets (investments)	(11,998)	(12,446)
Business acquisitions and other changes	636	-
Free cash flow	34,795	(13,655)
Interest and financial charges	(684)	(1,091)
Other changes in equity	(11,506)	303
Change in net financial position	22,605	(14,443)
Net financial position at the beginning of the period	3,829	(9,063)
Net financial position at the end of the period	26,434	(23,506)

(€'000)	30 June 2021	31 December 2020	30 June 2020
Cash	116,956	94,359	80,716
Cash equivalents	-	-	-
Other current financial assets	-	647	171
Liquidity	116,956	95,006	80,887
Current financial debt	(4,609)	(2,560)	(22,176)
Current portion of non-current financial debt	(21,320)	(25,872)	(28,644)
Current financial indebtedness	(25,929)	(28,432)	(50,820)
Net current financial indebtedness	91,027	66,574	30,067
Non-current financial debt	(64,593)	(62,745)	(53,573)
Debt instruments	-	-	-
Non-current trade and other payables	-	-	-
Non-current financial indebtedness	(64,593)	(62,745)	(53,573)
Net financial position	26,434	3,829	(23,506)

1. Pursuant to Consob communication no. DEM/6064293/2006, the calculation of Net Financial Position was adjusted to reflect the updates in the ESMA document 32-382-1138, 4 March 2021. The adjustments had no significant impact on the periods considered.

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The director in charge of preparing the corporate accounting documents, Attilio Bruzzese, declares that pursuant to and for the purposes of article 154-bis, paragraph 2 of Italian Legislative Decree no. 58 of 1998, the accounting information contained in this document corresponds to company documents, ledgers and accounting records.

Forward-Looking Statements: this document may include projections and other "forward-looking" statements within the meaning of applicable securities laws. In particular, all statements that address expectations or projections about the future, including statements about operating performance, market position, industry trends, general economic conditions, expected expenditures, cost-savings, synergies and financial results, are forward-looking statements. Consequently, any statements contained herein that are not statements of historical fact are forward-looking statements.

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