Sanlorenzo — Interim / Quarterly Report 2021

Nov 4, 2021

Informazione Regolamentata n. 2211-195-2021		Data/Ora Ricezione 04 Novembre 2021 13:29:03	Euronext Star Milan
Societa'	:	SANLORENZO
Identificativo Informazione Regolamentata	:	153693
Nome utilizzatore	:	SANLORENZON03 - -
Tipologia	:	REGEM
Data/Ora Ricezione	:	04 Novembre 2021 13:29:03
Data/Ora Inizio Diffusione presunta	:	04 Novembre 2021 13:29:04
Oggetto	:	9M 2021 Consolidated Results
Testo del comunicato

Vedi allegato.

SANLORENZO S.P.A.: THE BOARD OF DIRECTORS APPROVED THE PERIODIC FINANCIAL INFORMATION AS OF 30 SEPTEMBER 2021

EXCELLENT RESULTS WITH NET REVENUES FROM THE SALE OF NEW YACHTS AT €428.4 MILLION (+32.8%) AND NEW RECORD PROFITABILITY WITH EBITDA AT €68.6 MILLION (+41.5%)

RECORD BACKLOG AT €1.2 BILLION, HIGH VISIBILITY ON FUTURE GROWTH CONFIRMED 2021 GUIDANCE

• Net revenues from the sale of new yachts ("Net Revenues New Yachts") at €428.4 million, up by 32.8% on the first nine months of 2020, led by the outstanding performance in the Americas and Europe
• Adjusted EBITDA at €68.6 million, up by 41.5% on the first nine months of 2020, margin of 16.0% on Net Revenues New Yachts, up by 100 basis points
• EBIT at €52.1 million, up by 57.4% on the first nine months of 2020, margin of 12.2% on Net Revenues New Yachts
• Group net profit at €36.8 million, up by 64.9% on the first nine months of 2020, margin of 8.6% on Net Revenues New Yachts, up by 170 basis points
• Investments at €36.7 million, of which €24.7 million in the third quarter, more than doubled compared to the first nine months of 2020, as a result of the acquisition of new industrial facilities
• Net cash position of €35.2 million, a strong improvement on a net debt position of €5.1 million as of 30 September 2020 and a net cash position of €3.8 million as of 31 December 2020
• Order intake in the third quarter of €381.1 million, leading the backlog to reach €1.2 billion, with a significant increase of the amount related to next years
• Guidance, envisaging a double-digit growth of the main metrics in 2021, confirmed

Ameglia (La Spezia), 4 November 2021 – The Board of Directors of Sanlorenzo S.p.A. ("Sanlorenzo" or the "Company"), which met today under the chairmanship of Mr. Massimo Perotti, examined and approved the periodic financial information as of 30 September 2021.

Massimo Perotti, Chairman and Chief Executive Officer of the Company, commented:

«The results we approve today testify to the soundness of Sanlorenzo's business model and the ability to navigate with constancy, commitment and resolution towards our medium-long term goals. Our compass is a growth that, if I firstly defined gentle, now I consider "meaningful". Such an excellent sales performance is also achieved by keeping on launching new models at a constant pace, as we did this year: most recently at the Fort Lauderdale boat show, after the world

premieres in Cannes, we unveiled the new asymmetric model of Sanlorenzo family, SL106A, in addition to the American debut of the SL96A and BGX70. Following the international boat shows, we have orders amounting to €1.2 billion into the pipeline, with three new ranges already planned for 2022.

Together with product results, we pay strong attention to economic performance and sustainability: the growth in EBITDA and in the main financial indicators achieved in the nine months of the year provides us a significant visibility on future growth, confirming Sanlorenzo as luxury Maison in the yachting sector.»

CONSOLIDATED NET REVENUES NEW YACHTS

Net Revenues New Yachts¹ in the first nine months of 2021 were equal to €428.4 million, of which €164.8 million generated in the third quarter, up by 32.8% compared to €322.6 million in the same period of 2020.

In a context of strong market acceleration, this performance is a result of both a rise in volumes due to the high collection of new orders and an increase in average selling prices, specifically for superyachts, made possible by the high-end positioning of the brand, with a product mix that has an increased incidence of larger yachts in all divisions.

Net Revenues New Yachts by division

(€'000)	Nine months ended 30 September				Change
	2021	% of total	2020	% of total		2021 vs. 2020 2021 vs. 2020%
Yacht Division	263,328	61.5%	202,577	62.8%	60,751	+30.0%
Superyacht Division	133,241	31.1%	99,825	30.9%	33,416	+33.5%
Bluegame Division	31,871	7.4%	20,221	6.3%	11,650	+57.6%
Net Revenues New Yachts	428,440	100.0%	322,623	100.0%	105,817	+32.8%

The Yacht Division generated Net Revenues New Yachts of €263.3 million, accounting for 61.5% of the total, up by 30.0% on the first nine months of 2020. The excellent sales performance concerned all product ranges, and in particular the SX line (with the SX112 model introduced in 2020), the SD line (with the new SD118 model presented at the Cannes Yachting Festival) and the SL line (with the asymmetrical models).

The Superyacht Division generated Net Revenues New Yachts of €133.2 million, accounting for 31.1% of the total, up by 33.5% on the first nine months of 2020, driven by the Steel Line and the new X-Space Line, which was extremely well received even before its launch, expected in 2022.

The Bluegame Division generated Net Revenues New Yachts of €31.9 million, accounting for 7.4% of the total, up by 57.6% on the first nine months of 2020, thanks in particular to the results of the BGX line, with the introduction of the second model BGX60, launched in 2020, and the first sales of the new BG72 model, recently presented at the Cannes Yachting Festival.

Net Revenues New Yachts by geographical area

(€'000)	Nine months ended 30 September	Change
	2021	% of total	2020	% of total		2021 vs. 2020 2021 vs. 2020%
Europe	224,318	52.3%	186,141	57.8%	38,177	+20.5%
Americas	102,692	24.0%	46,538	14.4%	56,154	+120.7%
APAC	70,590	16.5%	60,114	18.6%	10,476	+17.4%
MEA	30,840	7.2%	29,830	9.2%	1,010	+3.4%
Net Revenues New Yachts	428,440	100.0%	322,623	100.0%	105,817	+32.8%

¹Net Revenues New Yachts are calculated as the algebraic sum of revenues from contracts with customers relating to new yachts net of commissions. In accordance with IFRS standards, the selling price of new yachts and therefore also the calculation of the related revenues includes the difference between the value contractually attributed to the pre-owned boats traded in and their relative fair value.

Europe recorded Net Revenues New Yachts equal to €224.3 million (of which €44.2 million generated in Italy), accounting for 52.3% of the total, up by 20.5% on the first nine months of 2020.

The Americas recorded Net Revenues New Yachts equal to €102.7 million, accounting for 24.0% of the total, up by 120.7% on the first nine months of 2020, with excellent results in the United States.

The APAC area recorded Net Revenues New Yachts equal to €70.6 million, accounting for 16.5% of the total, up by 17.4% on the first nine months of 2020, driven by sales in Hong Kong.

The MEA area recorded Net Revenues New Yachts equal to €30.8 million, accounting for 7.2% of the total, a slight increase compared to the first nine months of 2020.

CONSOLIDATED OPERATING AND NET RESULTS

Adjusted EBITDA² was equal to €68.6 million, up by 41.5% compared to €48.5 million in the first nine months of 2020. The margin on Net Revenues New Yachts was equal to 16.0%, up by 100 basis points on the same period of 2020.

EBITDA³ , including non-recurring components linked to the non-monetary costs of the 2020 Stock Option Plan and the expenses incurred for COVID-19, amounted to €67.9 million, up by 43.3% compared to €47.4 million in the first nine months of 2020.

The significant and constant increase in operating profits is related to the efficiencies generated by the optimisation of the new production capacity and the resultant greater absorption of fixed costs. Profitability also benefited from the shift in product mix towards larger yachts in all divisions and from the increase in average selling prices, which offset the increase in raw material costs.

EBIT was equal to €52.1 million, up by 57.4% compared to €33.1 million in the first nine months of 2020. The margin on Net Revenues New Yachts increased to 12.2% from 10.3% in 2020, in spite of an increase of 10.6% in depreciation, which stood at €15.8 million, as a result of the coming on stream of investments made to develop new products and to increase production capacity.

The pre-tax profit was equal to €51.3 million, up by 62.5% compared to €31.6 million in the first nine months of 2020.

Group net profit reached €36.8 million, up by 64.9% compared to €22.3 million in the first nine months of 2020. The margin on Net Revenues New Yachts was 8.6%, up by 170 basis points from 6.9% in 2020.

CONSOLIDATED BALANCE SHEET AND FINANCIAL RESULTS

Net working capital as of 30 September 2021 was negative for €(7.7) million, down by €26.9 million compared to €19.3 million as of 31 December and down by €35.3 million compared to €27.6 million as of 30 September 2020.

Inventories were equal to €68.1 million, down by €14.1 million compared to €82.2 million as of 31 December 2020 and down by €25.0 million compared to €93.2 million as of 30 September 2020. Inventories of finished products were equal to €26.8 million and included pre-owned boats already sold at the end of the period to be delivered in subsequent months, for a value of €8.1 million.

The performance of net working capital is consistent with the business seasonality, also in view of the concentration of yacht deliveries in the summer months, and positively influenced by the increase in backlog.

Investments amounted to €36.7 million, of which €24.7 million made during the third quarter, more than doubled compared to €17.3 million in the first nine months of 2020, including €21.9 million intended to increase in

² Adjusted EBITDA is calculated by adding amortisation/depreciation expenses to operating profit/loss adjusted for non-recurring items. Non-recurring items, mainly related to the non-monetary costs of the 2020 Stock Option Plan and the expenses incurred for COVID-19, were equal to €690 thousand and €1,098 thousand in the first nine months of 2021 and 2020, respectively.

³ EBITDA is calculated by adding amortisation/depreciation expenses to operating profit/loss.

production capacity and €10.6 million for product development. In particular, during the third quarter, three acquisitions of industrial facilities located next to the Company's shipyards of Viareggio, Massa and La Spezia were concluded, for a total consideration of €19.2 million (including transaction costs), which will result in a significant increase in production capacity to respond to an acceleration in sales.

Net financial position⁴ was positive and equal to €35.2 million (€3.8 million net cash as of 31 December 2020 and €5.1 million net debt as of 30 September 2020), with an improvement of €40.2 million on the previous year, mainly thanks to the strong cash generation from operating activities, despite significant investments.

Cash as of 30 September 2021 was equal to €139.1 million (€94.4 million as of 31 December 2020 and €100.9 million as of 30 September 2020). As of 30 September 2021, total available liquidity amounted to €270.9 million, including unused bank credit lines equal to €131.8 million⁵ .

BACKLOG

(€'000)		Backlog
	31 December 20206	31 March 2021	30 June 2021	30 September 2021
Backlog	408,761	553,411	810,740	1,191,876
Of which current year	305,072	409,899	497,982	570,646
Of which subsequent years	103,689	143,512	312,758	621,230

Group backlog⁷ as of 30 September 2021 amounted to €1,191.9 million, up by 521.7 million compared to the figure as of 30 September 2020 (€670.2 million) and up by €783.1 million compared to the figure as of 31 December 2020 (€408.8 million). The order intake in the first nine months of 2021 was equal to €783.1 million, of which €381.1 million in the third quarter.

During the third quarter, the increase in the order portfolio was led by the extraordinary performance of the Superyacht Division and by the extremely positive feedback received following the three boat shows that were held in September (Cannes Yachting Festival, Genoa Boat Show and Monaco Yacht Show), which have seen the start of numerous commercial negotiations, partially already closed with the signing of sales contracts, regarding in particular the recently launched products (SL90 Asymmetric, SL120 Asymmetric, SD118 for the Yacht Division and BG72 for Bluegame) and the new X-Space range of the Superyacht Division which will be presented in 2022.

The amount of the gross backlog for the current year, equal to €570.6 million, covers the 2021 guidance related to Net Revenues New Yachts. The visibility on revenues of subsequent years is also significant and amounted to €621.2 million, fostered by an increased incidence of larger yachts in all divisions, with delivery dates until 2024. The backlog solidity is confirmed thanks to a coverage by final clients of about 91%.

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

⁵Not including lines of credit for reverse factoring and confirming.

⁶ Conventionally discharged from the amounts related to yachts delivered during the reference year.

⁷Backlog is calculated as the sum of the value of all orders and sales contracts signed with customers or brand representatives relating to yachts for delivery or delivered in the current financial year or for delivery in subsequent financial years. For each year, the value of the orders and contracts included in the backlog refers to the relative share of the residual value from 1 January of the financial year in question until the delivery date. The backlog relating to yachts delivered during the financial year is conventionally cleared on 31 December.

BUSINESS OUTLOOK AND GUIDANCE

The strong growth dynamics of the yachting sector are being consolidated over the months, fostered, in the luxury segment, by the expansion of potential customers belonging to the Ultra High Net Worth Individuals, which are constantly increasing in terms of both number and wealth, particularly in the United States and APAC.

In this context, Sanlorenzo continues to benefit from the unique characteristics of its business model: high-end positioning of the brand, yachts always at the forefront of innovation, rigorously made-to-measure with a sartorial approach for a club of selected customers, close liaison with art and design, distribution through a limited number of brand representatives, flexible cost structure.

The expected growth, partly already reflected in the backlog as of 30 September 2021, is fostered by a robust product pipeline, envisaging the launch in 2022 of three new ranges – SP ("Smart Performance"), X-Space and BGM (Bluegame Multi-hull) – with which Sanlorenzo tap into new market segments, characterized by novel functions and strongly inspired by sustainability criteria. These are the principles that also guide Research and Development, focused today in particular on diesel electric yachts and marine application of fuel cells, activity that will receive a strong acceleration thanks to the strategic agreement with Siemens Energy.

In parallel, the Group is enhancing the offer of the High-End Services Division, established in 2020, entirely focused on the proposal of a package of services, to which only Sanlorenzo clients will have access, including tailor-made leasing and financing, the first monobrand charter fleet (Sanlorenzo Charter Fleet), maintenance, refit and restyling services (Sanlorenzo Timeless) and crew training at the Sanlorenzo Academy.

The Group also continues to carry on the programme to constantly increase operating profit margins, fostered by the efficiencies generated by the optimisation of new production capacity, in further expansion thanks to the investments made in the third quarter, and the increase in the prices of new orders.

In light of all of the above, also by virtue of a backlog for the year 2021 equal to €570.6 million, the Company confirms the guidance⁸ for the current year which envisages a double-digit growth of the main metrics.

(€ millions, unless indicated otherwise)		Actual	Guidance	Change guidance 2021
	2019	2020	2021	(average) vs actual 2020
Net Revenues New Yachts	455.9	457.7	565 – 575	+25%
Adjusted EBITDA	66.0	70.6	92 – 94	+31%
Adjusted EBITDA margin (in % of Net Revenues New Yachts)	14.5%	15.4%	16.2% – 16.3%	+86 bps
Group net profit	27.0	34.5	47 – 48	+36%
Investments	51.4	30.8	45 – 47	+49%
Net financial position	(9.1)	3.8	20 – 22	+17

* * *

Today at 16:00 CEST the Sanlorenzo's management team will hold a conference call to present the results of the first nine months of 2021 to financial analysts and institutional investors. The conference call can be followed live at the following link:

https://us02web.zoom.us/j/82075211405?pwd=T0J6Q2kyc0VxSE1jSnpzZTF2RWVSUT09

The supporting documentation will be published in the "Investors/Events and presentations" section of the Company's website (www.sanlorenzoyacht.com) before the conference call.

⁸ In the absence of a significant impact of additional restrictions linked to the COVID-19 pandemic and excluding the effects of any extraordinary transaction.

The manager responsible for preparing the corporate accounts, Attilio Bruzzese, pursuant to article 154-bis, paragraph 2, of Legislative Decree no. 58 of 1998 ("Consolidated Finance Law - TUF") states that the information in this communication correspond to the records, ledgers and accounting entries.

This document includes forward-looking statements relating to future events and operational, economic and financial results of Sanlorenzo Group. These forecasts, by their nature, contain an element of risk and uncertainty, as they depend on the occurrence of future events and developments.

This document makes use of some alternative performance indicators. The represented indicators are not identified as accounting measurements in the context of IFRS standards and, therefore, must not be viewed as alternative measurements to those included in the financial statements. The management team believes that these indicators are a significant parameter for the assessment of the Group's economic and financial performance.

The Periodic Financial Information as of 30 September 2021 is not subject to audit.

Sanlorenzo S.p.A.

Sanlorenzo is a worldwide leader in terms of number of yachts over 30 metres long. It is the only player in luxury yachting to compete in different segments with a single brand, producing yachts and superyachts tailored to every boat owner, characterised by a distinctive and timeless design.

* * *

Sanlorenzo's production is broken down into three divisions:

• Yacht Division yachts in composite between 24 and 38 metres;
• Superyacht Division superyachts in aluminium and steel between 40 and 72 metres;
• Bluegame Division sport utility yachts between 13 and 23 metres.

Sanlorenzo's production is articulated over four production sites located in La Spezia, Ameglia (SP), Viareggio (LU) and Massa. The sites are strategically located near to each other, so allowing significant operational efficiencies. The Group employs around 500 people and cooperates with a network of 1,500 qualified craft enterprises. It can rely on an international distribution network and a widespread service network for customers all over the world. In 2020, the Group generated net revenues from the sale of new yachts of around €458 million, adjusted EBITDA of €71 million and a Group net profit of €35 million.

* * *

www.sanlorenzoyacht.com

Investor Relations

Attilio Bruzzese Silvia Guidi Mob. +39 337 1187188 investor.relations@sanlorenzoyacht.com

Investor Relations | Advisory

Mara Di Giorgio Mob. +39 335 7737417 mara@twin.services Simona D'Agostino Mob. +39 335 7729138 simona.dagostino@hear-ir.com

Media Relations

Chiara Bortolato Mob. +39 347 8533894 chiara@twin.services Tommaso Pesa Mob. +39 347 0735670 tommaso@twin.services

SANLORENZO GROUP

RECLASSIFIED INCOME STATEMENT AS OF 30 SEPTEMBER2021

(€'000)		Nine months ended 30 September	Change
	2021	% Net Revenues New Yachts	2020	% Net Revenues New Yachts		2021 vs. 2020 2021 vs. 2020%
Net Revenues New Yachts	428,440	100.0%	322,623	100.0%	105,817	+32.8%
Net revenues from pre-owned
boats, maintenance and other	66,334	15.5%	42,728	13.2%	23,606	+55.2%
services
Other income	3,356	0.8%	2,632	0.8%	724	+27.5%
Operating costs	(429,491)	(100.3)%	(319,462)	(99.0)%	(110,029)	+34.4%
Adjusted EBITDA	68,639	16.0%	48,521	15.0%	20,118	+41.5%
Non-recurring costs	(690)	(0.1)%	(1,098)	(0.3)%	408	-37.2%
EBITDA	67,949	15.9%	47,423	14.7%	20,526	+43.3%
Depreciation and amortisation	(15,826)	(3.7)%	(14,314)	(4.4)%	(1,512)	+10.6%
EBIT	52,123	12.2%	33,109	10.3%	19,014	+57.4%
Net financial expense	(822)	(0.2)%	(1,578)	(0.5)%	756	-47.9%
Adjustments to financial assets	(14)	-	33	0.0%	(47)	-142.4%
Pre-tax profit	51,287	12.0%	31,564	9.8%	19,723	+62.5%
Income taxes	(14,179)	(3.3)%	(9,435)	(2.9)%	(4,744)	+50.3%
Net profit	37,108	8.7%	22,129	6.9%	14,979	+67.7%
Net (profit)/loss attributable to non-controlling interests	(296)	(0.1)%	197	0.1%	(493)	-250.3%
Group net profit	36,812	8.6%	22,326	6.9%	14,486	+64.9%

SANLORENZO GROUP

RECLASSIFIED STATEMENT OF FINANCIAL POSITION AS OF 30 SEPTEMBER 2021

(€'000)	30 September	31 December	30 September		Change
	2021	2020	2020	30 September 2021 vs. 31 December 2020	30 September 2021 vs. 30 September 2020
USES
Goodwill	8,667	8,667	8,667	-	-
Intangible assets with a finite useful life	41,916	36,434	34,898	5,482	7,018
Property, plant and equipment	131,430	112,491	106,100	18,939	25,330
Equity investments and non-current assets	422	412	409	10	13
Net deferred tax assets	6,193	6,538	2,723	(345)	3,470
Non-current employee benefits	(1,262)	(845)	(908)	(417)	(354)
Non-current provision for risks and charges	(1,513)	(1,389)	(982)	(124)	(531)
Net fixed capital	185,853	162,308	150,907	23,545	34,946
Inventories	68,108	82,214	93,151	(14,106)	(25,043)
Trade receivables	21,502	17,233	16,193	4,269	5,309
Contract assets	104,106	112,938	104,018	(8,832)	88
Trade payables	(107,630)	(137,238)	(124,449)	29,608	16,819
Contract liabilities	(90,193)	(46,156)	(59,570)	(44,037)	(30,623)
Other current assets	33,707	30,434	32,268	3,273	1,439
Current provisions for risks and charges	(7,336)	(12,679)	(8,438)	5,343	1,102
Other current liabilities	(29,946)	(27,492)	(25,584)	(2,454)	(4,362)
Net working capital	(7,682)	19,254	27,589	(26,936)	(35,271)
Net invested capital	178,171	181,562	178,496	(3,391)	(325)
SOURCES
Equity	213,330	185,391	173,408	27,939	39,922
(Net financial position)	(35,159)	(3,829)	5,088	(31,330)	(40,247)
Total sources	178,171	181,562	178,496	(3,391)	(325)

SANLORENZO GROUP

NET FINANCIAL POSITION AS OF 30 SEPTEMBER 2021⁹

	(€'000)			30 September 31 December 30 September	Change
		2021	2020	2020	30 September 2021 vs. 31 December 2020	30 September 2021 vs. 30 September 2020
A	Cash	139,119	94,359	100,876	44,760	38,243
B	Cash equivalents	-	-	-	-	-
C	Other current financial assets	-	647	674	(647)	(674)
D	Liquidity (A + B + C)	139,119	95,006	101,550	44,113	37,569
E	Current financial debt	(4,161)	(2,560)	(5,226)	(1,601)	1,065
F	Current portion of non-current financial debt	(26,228)	(25,872)	(35,096)	(356)	8,868
G	Current financial indebtedness (E + F)	(30,389)	(28,432)	(40,322)	(1,957)	9,933
H	Net current financial indebtedness (G + D)	108,730	66,574	61,228	42,156	47,502
I	Non-current financial debt	(73,571)	(62,745)	(66,316)	(10,826)	(7,255)
J	Debt instruments	-	-	-	-	-
K	Non-current trade and other payables	-	-	-	-	-
L	Non-current financial indebtedness (I + J + K)	(73,571)	(62,745)	(66,316)	(10,826)	(7,255)
M	Total financial indebtedness (H + L)	35,159	3,829	(5,088)	31,330	40,247

SANLORENZO GROUP

RECLASSIFIED CONSOLIDATED STATEMENT OF CASH FLOWS AS OF 30 SEPTEMBER 2021

(€'000)	30 September 2021	30 September 2020
EBITDA	67,949	47,423
Taxes paid	(13,389)	(3,859)
Changes in inventories	14,106	(30,840)
Change in net contract assets and liabilities	52,869	23,999
Change in trade receivables and advances to suppliers	(1,147)	3,932
Change in trade payables	(29,608)	(27,740)
Change in provisions and other assets and liabilities	(9,190)	9,473
Operating cash flow	81,590	22,388
Change in non-current assets (investments)	(36,723)	(17,333)
Business acquisitions and other changes	696	-
Free cash flow	45,563	5,055
Interest and financial charges	(989)	(1,545)
Other changes in equity	(13,244)	464
Change in net financial position	31,330	3,975
Net financial position at the beginning of the period	3,829	(9,063)
Net financial position at the end of the period	35,159	(5,088)

⁹ Pursuant to the Consob communication no. DEM/6064293/2006, the scheme was adjusted to reflect the updates in the ESMA document 32-382-1138 of 4 March 2021.