The Italian Sea Group

Investor Presentation • Jul 26, 2021

INVESTOR PRESENTATION

July 2021

Management team

Giovanni Costantino Filippo Menchelli Giuseppe Taranto Marco Carniani

Founder & Chief Executive Officer

25 years of experience as top manager

10+ years as General Manager of an Italian furniture group listed on the NYSE

15+ years as an entrepreneur in the custom furniture industry

Chairman & Chief Financial Officer

18 years of experience as top manager

13 in the yachting industry 9 in the yachting industry 13 in the yachting industry 7 in the yachting industry

20+ years experience in accounting and finance across various industries

Vice President & Chief Commercial Officer Administration Director

25 years of experience as top manager

10+ years as General Manager of an Italian furniture group listed on the NYSE

12 years of experience as top manager

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EQUITY STORY HIGHLIGHTS

Key pillars of The Italian Sea Group's equity story

A key player in customised ultra-luxury yachts…

One of the top players in the high-end luxury yacht industry created through transformational investments and revamping of heritage brands

Sources: company information

Note: net sales exclude extraordinary income and capital gains 6

…with prestigious strategic partnerships and collaborations

Alliances with Automobili Lamborghini, leading international luxury brands and "starchitects"

Exclusive partnership with Automobili Lamborghini to develop its co-branded limited edition high-speed boats

2021+1H22 production capacity already sold

Sources: company information, management statements

Exclusive partnership with international top luxury brand: "Giorgio Armani", for the co-design of exterior and interior yacht lines

Collaboration with industry "starchitects"

Strong brands are choosing The Italian Sea Group as a partner

Superior customisation and "Made in Italy" quality

~75% of customers rely on the company to assess and design the interior

Exceptional craftmanship and design and engineering skills for an ultra luxury yacht with Italian flair

Globally recognised quality and design Ever-increasing quality combined with prompt delivery

Relentlessly improving yard performance, leading to near-to-zero claims, with evershortening response times and no delays to deliveries since 2013

2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 Average days of delay

Sources: company information, management statements

Largely untapped, UHNWI client base immune to economic shock

Considerable potential upside from even a marginal increase in penetration of highly resilient client base

UHNWI doubled in the last decade and are expected to have dropped just 1.9% in 2020, due to the COVID-19 effect, rebounding by 4.4% in 2021

Sources: Deloitte Boating Market Monitor, May 2019; Global Wealth Report

plus the remaining scheduled deliveries for the year

Growing UHNWI client base Largely unpenetrated addressable market

Luxury yachts represent a tiny fraction of the global luxury market (<2% in 2018), but are growing at a faster rate than any other sub-segment since 2013

Consistent market growth in higher length model range

Global motor-yacht fleet by size range, number of superyachts, 2006-2018E

Databook, Credit Suisse, 2010-2019; IMF,"dinamiche e prospettive di mercato della filiera nautica da diporto, 2019; Global Order Book, 2020 Notes: 1) 2018E: based on sum of delivered yachts as at November 16th 2018,

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 11

Backlog-based business granting exceptional visibility…

Net backlog growing sharply, now at 3.7x 2020 revenues, with track record of order cancellations close to zero

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 12

…with positive trend towards longer products…

~75% of the net backlog >70mt¹

Sources: company information

Note: 1) data as at 31 December 2020, 2) contract signed in 2021 13

No risk of unsold inventory and favourable advance payment conditions drive positive working capital dynamics

Sources: company information

Superior refitting capabilities, boosting customer base expansion…

Most refitting occurs on third-party yachts, easing future customer base expansion

• ~90% of revenues on average from third-party boats in the last 3 years
  • Customer base expansion opportunity for shipbuilding business
• Ongoing know-how acquisition through refitting assessments of peers' vessels

100% refitting hit ratio on The Italian Sea Group fleet

Maltese Falcon 88mt – Perini Navi

65mt – Codecasa

90mt – Lürssen

Smeralda 77mt – SilverYatch

86mt – Lürssen

Units refitted, breakdown by ownership

Sources: company information

…leveraging on comprehensive and strategically located yard facilities

						Strategic positioning in most acclaimed shipyard districts worldwide		Country breakdown of the refitting market RoW 35% 5%	9% 8%	25% 14%
Top crew facilities on site to convince refit decision-makers: Outperforming other competitor shipyards captain and shipowner's representative
Shipyard	Country	Motor	Sail	Max length (mt)	Covered workspace (mt)	Dry docks	Offices	Gym	Training	Restaurants
200					150
Lusben				120	60		On site	<1mi away	<1mi away	<1mi away
Amico & Co				170	102		On site	<1mi away	<1mi away	<1mi away
Monaco Marine				370	n.a.		On site	n.a.	n.a.	n.a.
MB92 Bacelona				200	60		On site	n.a.	n.a.	n.a.
Astilleros de Mallorca				110	n.a.		On site	<1mi away	n.a.	n.a.
JFA Yachts				60	50		On site	<1mi away	<1mi away	<1mi away
A&R Services				126	125		On site	<1mi away	On site	On site
Lürssen				215	170		<1mi away	<1mi away	<1mi away	<1mi away
Avangard				50	59		On site	<1mi away	<1mi away	<1mi away

Sources: company information, management estimates, Global Refit Guide 2019- 20, Yachting Pages Refit, interviews with brokers and industry experts 16

Note: 1) The Italian Sea Group also offer entertainment services: events, dancing class, outdoor trips

Net backlog

Note: 2020 order intake includes ~Eu10mn of orders received and closed in ²⁰²⁰ 18

…resulting in strong cash generation and a solid capital structure

Profit & Loss | Q1 2021

Profit & Loss (reclassified)
(Eu '000)	2020	1Q 2020	1Q 2021	YoY (%)
Operating revenues	112,951	18,054	33,698	86.7%
Other revenues	5,343	872	1,200	37.6%
Sale fees	(1,853)	(473)	(206)	(56.4%)
Net Sales	116,441	18,453	34,692	88.0%
YoY	16.1%
Raw material costs	(26,423)	(3,333)	(7,621)	128.7%
Outsourced processes	(44,703)	(7,632)	(13,034)	70.8%
Consulting fees	(5,370)	(448)	(1,579)	252.5%
Other service costs	(7,037)	(1,262)	(2,229)	76.6%
Staff costs	(16,881)	(3,715)	(5,114)	37.7%
Other operating costs	(1,507)	(184)	(512)	178.3%
Total Costs	(101,921)	(16,574)	(30,089)	81.5%
EBITDA	14,520	1,879	4,603	145.0%
EBITDA margin	12.5%	10.2%	13.3%
D&A	(5,090)	(1,012)	(1,137)	12.4%
EBIT	9,430	867	3,466	299.6%
EBIT Margin	8.1%	4.7%	10.0%
Net financial income (charges)	(1,963)	(552)	(936)	69.6%
Total extraordinary Income (expenses)	343	75	48	(36.0%)
EBT	7,810	390	2,578	560.2%
Taxes	(1,575)	(221)	(670)	203.2%
Tax rate	20.2%	56.6%	26.0%
Net income	6,235	169	1,908	1025.9%

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Balance Sheet | Q1 2021

	Balance Sheet	Key comments
(Eu '000)	2020	1Q 2021	YoY (%)
Intangible assets	4,377	4,327	(1.1%)	The increase in the NFD as at Q1-2021 vs. FY-2020 is due to:
Tangible assets	53,543	57,522	7.4%	€ 6.2m for the payment of dividends •
Investments	43	43	-	€ 3.2m upon payment of the CELI transaction •
Net Fixed Assets	57,963	61,892	6.8%	€ 4.6m for investments referring to TISG 4.0 •
Other long-term assets and liabilities	(740)	1,293	(274.7%)	For the residual part to the dynamics of working capital •
Inventory	2,759	2,739	(0.7%)
Contract work in progress and advance payments	13,704	31,063	126.7%
Trade receivables	14,616	4,932	(66.3%)
Trade payables	(34,240)	(30,191)	(11.8%)
Other current assets and liabilities	(6,544)	(6,931)	5.9%
Net Working Capital	(10,445)	2,905	(127.8%)
(Funds)	(3,456)	(3,653)	5.7%
Total Invested Capital	44,062	61,144	38.8%
Total shareholder's equity	40,220	35,902	(10.7%)
Net financial debt	3,842	25,242	557.0%
Total shareholder's equity and NFD	44,062	61,144	38.8%

	€ 6.2m for the payment of dividends
•	€ 3.2m upon payment of the CELI transaction
•	€ 4.6m for investments referring to TISG 4.0
•	For the residual part to the dynamics of working capital

Cash Flow | Q1 2021

Cash Flow
(Eu '000)	2020	1Q 2020	1Q 2021	YoY (%)
Earnings before taxes	7,810	390	2,578	561.0%
Provisions	2,656	456	648	42.1%
Depreciation and amortisation	3,941	869	957	10.1%
Financial items	703	16	17	6.3%
Taxes	(637)	(221)	(670)	203.2%
Operating Cash Flow	14,473	1,510	3,530	133.8%
Trade receivables	(2,933)	825	9,504	1052.0%
Inventory	8,012	5,563	(17,339)	(411.7%)
Other operating assets	(1,260)	1,215	431	(64.5%)
Credits for escrow	-	-	-	-
Trade payables	11,161	(3,959)	(4,049)	2.3%
Other operating liabilities	(511)	(504)	1,190	(336.1%)
Employee severance indemnity	(798)	(173)	(219)	26.6%
Funds	(406)	(4)	360	(9100.0%)
Change in NWC and Funds	13,265	2,963	(10,122)	(441.6%)
Cash flow from operating activity	27,738	4,473	(6,592)	(247.4%)
Capex	(12,349)	(1,381)	(5,069)	267.1%
Free Cash Flow	15,389	3,092	(11,661)	(477.1%)
CELI receivable	(1,343)	0	(3,192)	-
Cash flow from financing activity	(1,858)	(1,700)	5,747	(438.1%)
Total cash flow for the period	12,188	1,392	(9,106)	(754.2%)

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A clear long-term vision to drive future growth

Clearly developed business strategy to enhance brand awareness, improve international positioning and increase production capacity

Sources: company information, management statements

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 may contain forward looking statements which reflect Management's current views and estimates. The forward looking statements involve certain risks and uncertainties that could cause actual results to differ materially from those contained in the forward looking statements. Potential risks and uncertainties include such factors as general economic conditions, foreign exchange fluctuations, competitive product and pricing pressures and regulatory developments. 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 does not constitute an offer to sell or a solicitation to buy or subscribe to Company shares and neither this entire document or a portion of it may constitute a recommendation to effect any transaction or to conclude any legal act of any kind whatsoever. 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 the balances on the books of account and the accounting records and entries.