The Italian Sea Group

Earnings Release • Sep 15, 2021

MANAGEMENT H1 2021 RESULTS

May 2021 September 2021

The Italian Sea Group at a glance

Few competitors, mainly located in Northern Europe

Focus on the less crowded segment

Sources: Superyachts Annual Report 2017, 2018 and 2019, company websites, Aida BdV, Amadeus BdV

~70% of the net backlog >70mt¹

Sources: company information

Note: 1) data as of June 30th, 2021

Backlog-based business granting exceptional visibility…

Net backlog growing sharply, with a track record of order cancellations close to zero

Net backlog 2021 breakdowns

Notes: 1) Order Book is equal to the sum of all contract values related to shipbuilding orders in progress; 2) Net Backlog takes into account the contract values net of related revenues already recorded; 3) Backlog / Net Sales

FINANCIALS

A combination of exceptional and visible growth…

Ever-increasing backlog supports strong rise in revenues and margins …

Shipbuilding

2021 revenue breakdown

Admiral

78.6

Admiral net backlog 1H 2021

Geco 55 mt, 2020

LifeSaga, 65 mt, 2019

Tecnomar

Dynamic styling and cutting-edge design with powerful and reliable technical features

Fast and sporty styling, steel and aluminum alloy structure with a special focus on eco sustainability

Tecnomar Evo has been particularly successful in the Asian market

289 yachts delivered since 1987 o/w 7 since 2014

Tecnomar net backlog 2021

EVO 130, 40 mt La Vie EVO, 37 mt Double Shot, 36 mt

Eu26.7mn 2 orders

Tecnomar for Lamborghini

Refitting

2021 revenue breakdown

Revenues 1H 2021 by LOA

…resulting in strong cash generation and a solid capital structure

Virtuous business model improving cash generation and favouring the balance sheet strengthening

Is in line with the NWC as of December 31st 2020. NWC composition is influenced by decrease in inventory and trade receivables as well as increase in trade payables and other current assets and liabilities. However, the effect is mitigated by a substantial increase in contract work in progress and advance payments.

Net Working Capital Net Financial Position

As of June 30th, 2021 has significantly increased from Dec. 31ST 2020, due to operational management contribution (Eu 6.5 mn), balanced by significant investments for Eu 13.8 mn, dividend payments (Eu 6.2 mn) and thanks to the IPO proceeds (Eu 44.5 mn).

Net working capital (NWC) evolution Net financial position and leverage evolution (NFP/EBITDA)

CAPEX

In the first six months of 2021 investments were made for the expansion of the Marina di Carrara shipyard, which involved the completion of a new shade and the start of construction of a new dry dock.

Notes: 1) Computed as unlevered free cash flow divided by EBITDA 2) Computed as EBIT/ net invested capital

STRATEGY

Sources: company information, management statements

APPENDIX

Profit & Loss

			Profit & Loss (reclassified)				Key comments
	(Eu '000)	2020	1H 2021	1H 2020	Var	Var %
	Operating revenues	112.951	79.044	39.340	39.704	101%	A
	Other revenues	5.343	2.211	1.875	337	18%
	Sale fees	(1.853)	(278)	(625)	347	(56%)	increase in net sales
A	Net Sales	116.441	80.977	40.590	40.388	100%
	Raw material costs	(26.423)	(17.607)	(6.612)	(10.995)	166%
	Outsourced processes	(44.703)	(34.652)	(14.423)	(20.229)	140%
	Consulting fees	(5.370)	(2.446)	(2.508)	62	(2%)	B
	Other service costs	(7.037)	(4.422)	(3.768)	(654)	17%	also thanks to partnership with luxury brands.
	Staff costs	(16.881)	(10.503)	(7.798)	(2.705)	35%
	Other operating costs	(1.507)	(1.098)	(591)	(506)	86%
	Total Costs	(101.921)	(70.727)	(35.700)	(35.027)	98%
B	EBITDA	14.520	10.250	4.889	5.361	110%
	EBITDA margin	12,5%	12,7%	12,0%
	Provisions & Credit losses	(1.147)	(20)	(285)	265	(93%)
	Intangible asset amortisation	(297)	(176)	(111)	(66)	59%
	Tangible asset depreciation	(3.646)	(2.200)	(1.636)	(563)	34%
	D&A and provisions	(5.090)	(2.396)	(2.032)	(364)	18%
	EBIT	9.430	7.854	2.857	4.997	175%
	EBIT Margin	8,0%	10,0%	7,0%
	Net financial income (charges)	(1.963)	(1.535)	(877)	(658)	75%
	Extraordinary items	343	(295)	(11)	(284)	2.541%
	EBT	7.810	6.024	1.969	4.055	206%
	Taxes	(1.575)	(1.375)	(975)	(400)	41%
	Tax rate	(20,0%)	(23,0%)	(50,0%)
	Net income	6.235	4.649	994	3.655	368%

• A successful commercial strategy has led to increases of (i) incoming orders and (ii) average length of yachts, sustaining the sharp increase in net sales A
• The rise in 2021 net sales was driven by new contracts, in particular 4 contracts related to construction and sales of yachts with LOA comprise 40-100 mt. and 5 contracts related to motor-yachts with LOA about 20 mt branded Tecnomar for Lamborghini.
• Increase of products margin through High-End market positioning, also thanks to partnership with luxury brands. B
• Increase operational costs efficiency due to strategic investments aimed at improving the shipyard productive capacity.
• Investments in human capital to develop a specialized internal know-how about the most valuable phases of the supply chain.

Balance Sheet

Balance Sheet Key comments

(Eu '000)	1H 2021	2020
Intangible assets	4.599	4.377
Tangible assets	62.733	53.543
Investments	43	43
Net Fixed Assets	67.374	57.963
Other long term assets and liabilities	1.816	664
Inventory	163	2.759
Contract work in progress and advance payments	40.959	13.704
Trade receivables	2.998	14.616
Trade payables	(42.136)	(34.240)
Other current assets and liabilities	(8.602)	(3.527)
Net Working Capital	(4.801)	(6.024)
Funds	(3.743)	(3.456)
Net Invested Capital	58.829	48.483
Total shareholder's equity	(81.146)	(40.220)
Net financial debt	22.316	(8.264)
Source of funds	(58.829)	(48.483)

Net Working Capital is in line with the NWC as of December 31st 2020. NWC composition is influenced by decrease in Inventory and trade receivables as well as increase in trade payables and other current assets and liabilities. However, the effect is mitigated by a substantial increase in contract work in progress and advance payments.

The Net Financial Position as of June 30th, 2021 has significantly increased from Dec. 31st 2020, due to operational management contribution (Eu 6.5 mn), balanced by significant investments for Eu 13.8 mn, dividend payments (Eu 6.2 mn) and thanks to the IPO proceeds (Eu 44.5 mn)

Net Financial Position Breakdown

(Eu mn)	1H 2021	2020
Liquidity	(62,4)	(17,9)
Short-term banking debt	7,0	2,5
Long-term banking debt	17,8	7,8
Other short-term debt	2,7	3,9
Other long-term debt	12,6	12,1
Net Financial Position	(22,3)	8,3

Cash Flow

Cash Flow

(Eu '000)	1H 2021	1H 2020
Earnings before taxes	6.024	2.149
Provisions	905	913
Depreciation and amortisation	2.520	1.713
Financial items	33	32
Taxes	(1.375)	(975)
Operating Cash Flow	8.107	3.832
Trade receivables	11.438	(5.301)
Inventory	(24.659)	5.576
Other operating assets	(1.580)	226
Trade payables	6.402	(6.305)
Other operating liabilities	6.468	1.858
Employee severance indemnity	(441)	(333)
Funds	753	(5)
Change in NWC and Funds	(1.619)	(4.284)
Cash flow from operating activity	6.488	(452)
Capex	(13.866)	(3.928)
Free Cash Flow	(7.378)	(4.380)
Cash flow from financing activity	51.857	2.145
Total cash flow for the period	44.479	(2.235)

Disclaimer

This document has been prepared by The Italian Sea Group S.p.A. ("TISG" or the "Company") for use during meetings with investors and financial analysts and is solely for information purposes. This presentation does not constitute a recommendation regarding the securities of the Company. This presentation does not contain an offer to sell or a solicitation of any offer to buy any securities issued by TISG.

This presentation may contain forward looking statements which reflect Management's current views with respect to future events and financial and operational performance of the Company and estimates. These forward-looking statements are based on TISG's current expectations and projections about future events.

Because these forward-looking statements are subject to risks and uncertainties, actual future results or performance may differ materially from those expressed in or implied by these statements due to any number of different factors, many of which are beyond the ability of TISG to control or estimate precisely, including changes in the regulatory environment, future market developments, fluctuations in the price, and other risks. You are cautioned not to place undue reliance on the forward-looking statements contained herein, which are made only as of the date of this presentation. TISG does not undertake any obligation to publicly release any updates or revisions to any forwardlooking statements to reflect events or circumstances after the date of this presentation.

Figures as absolute values and in percentages are calculated using precise financial data. Some of the differences found in this presentation are due to rounding of the values expressed in millions of Euro. This document may not be reproduced or distributed, in whole or in part, by any person other than the Company.

The Manager in Charge of preparing the Corporate accounting documents, Marco Carniani, declares pursuant to and to the effects of article 154-bis, paragraph 2 of Legislative Decree no. 58 of 1998, as amended, that the disclosures included in this document correspond to document results, books and accounting records.

Strictly Private and Confidential

Strictly Private and Confidential