The Italian Sea Group

Investor Presentation • Dec 6, 2023

B E R E N B E R G E U R O P E A N C O N F E R E N C E D E C E M B E R 2 0 2 3

AGENDA

Introduction
Executive Summary
Financials

THE ITALIAN SEA GROUP AT A GLANCE

The Italian Sea Group S.p.A. is a global operator in luxury yachting, the first builder in Italy and fourth in the world for yachts over 50 metres¹ . TISG went public on the Milan Stock Exchange on 8th June 2021.

	Customised motor-yachts above 50mt.
	Speedy motor-yachts from 37mt to 50mt.
	Large sailing yachts from 47mt.
	Gentleman Yachts from 24mt to 55mt.
	Refit and maintenance of motor and sailing yachts, with a focus on yachts over 60mt.
	Historical woodworking and furniture company, with expertise in yachting and real estate.

PARTNERSHIPS

Limited edition speedy motor-yachts inspired by the Lamborghini Siàn FKP 37.

Motor-yachts designed in collaboration with designer Giorgio Armani.

Notes: 1) Ranking based on 2022 yacht sales (source: Boat International, Global Order Book 2022);

2) Last updated on 28/11/2023.

REVENUES AND EBITDA EVOLUTION

M/Y Kenshō, 75mt

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M/Y Silver Star, 55mt

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Perini Navi Ketch, 56mt

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M/Y Tecnomar for Lamborghini 63, 19.8mt

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M/Y Picchiotti Gentleman, 24mt

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SUCCESS STORY SINCE 2009

TISG'S success story has been characterised by a strong focus on growth, leveraging on product quality, strategic investments on production capacity, and revamping of heritage Italian brands.

GROWING AND UNPENETRATED CUSTOMER BASE

Strong opportunity due to an unpenetrated customer base, deriving from an exponential increase in the global number of UHNWIs in the past three years.

MAIN DRIVERS

• Superyachts above 30mt grew +3% from 2010 to 2021, whereas UHNWIs with net worth above \$50mn grew at 11% CAGR, leading to a decline in the penetration rate (c. 2%).
• UHNWIs are expected to increase at a CAGR of 8% from 2021 to 2026E (+118k).
• The growth is largely driven by North America (6% CAGR, +45k) and APAC (12% CAGR, +48k).

COMMERCIAL APPROACH & CONTRACT STRUCTURE

TISG's commercial approach and contract structure aim at limiting risks with respect to inventory, achieve favourable working capital, and lock in expected margins.

ORDER-BASED APPROACH & BEST-IN-CLASS CONTROL SYSTEMS								No risk of
▪ No speculative production ▪ No penalties for delays or quality remarks									unsold inventory
▪	Trade-ins are not accepted ▪ No litigations with clients								nor write-offs
FAVOURABLE ADVANCE-PAYMENTS CONTRACT STRUCTURE
ORDER TYPE ADVANCE PAYMENTS (% OF PURCHASE PRICE)
	Payments of 11/12 milestones, each representing c. 10% of purchase price
From 30 to over 50mt LOA	Contract Signature	Instalment #1	Instalment #3	Instalment #4	Instalment #5	Instalment #6	Instalment #7	Instalment #8	Instalment #9	Delivery	Favourable working capital management
Tecnomar for Lamborghini 63	Downpayment 20%		Mid-payment 30%				Mid-payment 30%			Delivery 20%
CAREFUL COST MANAGEMENT
▪ Approx. 75-80% of direct costs (raw materials, engine, external suppliers, etc.) are contractualised at contract signature. ▪ The remaining 20-25% are kept as Variations to Contract, and may lead to a revision of the pricing.							Lock-in of profitability from order to completion

QUALITY AND VISIBILITY OF BACKLOG

• Industry leading levels of backlog, with visibility until the end of 2027 and balanced breakdown between geographic areas;
• Gross Backlog at 30 September 2023 represents 3.8x LTM Revenues;

BACKLOG EVOLUTION (GROSS AND NET)

• Resilient client base (UHNWI), cash-buyers who do not require any financing to purchase the products;
• Strict commercial policy with no trade-ins or sale of used boats, eliminating inventory risk.

	FY 2018	FY 2019	FY 2020	FY 2021	FY 2022	LTM Revenues
Gross Backlog x LTM Revenues	3.6	3.6	5.2	4.5	3.5	3.8
Net Backlog x LTM Revenues	2.3	2.5	3.7	2.9	2.1	1.9

Notes: 1) Net Backlog refers to the total value of contracts in progress related to yachts not yet delivered to the clients, net of the revenues already recorded in the income statement.

GROSS BACKLOG BREAKDOWN

32%

PRODUCTION CAPACITY – MARINA DI CARRARA

Representing TISG's Headquarters, the Marina di Carrara shipyard covers a total surface of over 100,000sqm, with state-of–the-art facilities and direct access to the sea. At its maximum capacity, the shipyard can accommodate up to 12 Shipbuilding projects in the larger dimensional range, as well as 25 Refit projects up to 140mt.

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PRODUCTION CAPACITY – LA SPEZIA

Home of the Tecnomar for Lamborghini 63 production, the La Spezia shipyard covers a total surface of 38,000sqm. At its maximum capacity, the shipyard can manage 3 Shipbuilding projects up to 60mt, as well as c. 16 Refit projects with an average length of 60mt.

PRODUCTION CAPACITY – TURKEY

In Turkey, TISG operates with a network of partners for the production of the vessels' hull and superstructure. The Company rents two shipyards, Hercelik (1) and Naveks (2), and works with their suppliers in their own shipyards, all located in Yalova, Tuzla, and Antalya, for a total surface of c. 70,000sqm.

INTERNALISATION OF KEY SUPPLY CHAIN ACTIVITIES

TISG internalises specific phases of the production cycle which require impeccable craftmanship, in order to maintain control on the quality, the timing, and the costs of these activities in support of marginality and customer satisfaction.

ESG ACHIEVEMENTS SO FAR

EXECUTIVE SUMMARY

9M 2023 RESULTS

• Order Book of Eu 1.3bn, +33% vs 9M 2022
• Revenues of Eu 262.2mn, +25% vs 9M 2022
• EBITDA of Eu 43.2mn, +31% vs 9M 2022, with a margin of 16.5%
• Investments of Eu 8.8 mn
• Net Financial Debt of Eu 31mn vs Eu 11.3mn at FY 2022

RELEVANT EVENTS AND BUSINESS OUTLOOK

• Obtainment of ISO 14001:2015 certification for Environmental Management Systems
• Participation at the 2023 Monaco Yacht Show with the worldwide preview of three new yachts, new product lines, and strategic partnerships
• Deliveries of three large yachts scheduled within the end of the year

STRATEGIC OUTLOOK

• 2023 Guidance confirmed in the high end of the value range: Revenues for Eu ~365mn and EBITDA Margin of ~16.5%
• 2024 Strategic Outlook confirmed: Revenues between Eu 400 – 420mn and EBITDA Margin between 17 – 17.5%

2023 MONACO YACHT SHOW HIGHLIGHTS

M/Y Admiral Kenshō (75mt)

M/Y Admiral | Armani Silver Star (55mt)

S/Y Perini Navi Art Explorer (47mt)

M/Y Tecnomar This Is It (43mt)

M/Y Tecnomar for Lamborghini 63 (20mt)

NEW ICONIC MODELS

In occasion of the 2023 Monaco Yacht Show opening, TISG announced three new iconic product lines during an exclusive press conference detailing the Company's next strategic steps.

In particular:

• M/Y Admiral Project Adventure, a 50mt Explorer super-yacht;
• M/Y Tecnomar Project Cat 133, a motor catamaran inspired by the lines of the acclaimed M/Y Tecnomar This Is It;
• M/Y Tecnomar Project EVO 155, 46mt speedy motor-yacht, the newest evolution of the successful Tecnomar EVO 120 model.

AGENDA

2023 GUIDANCE CONFIRMED IN THE HIGH END OF THE VALUE RANGE

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SUMMARY OF KEY 9M 2023 RESULTS

KEY HIGHLIGHTS

• 25% increase in Revenues due to the positive development of the Shipbuilding division, as well as an increase in Refit activities due to the seasonality of the business
• The increase in marginality over time is due to a careful management of operating costs, a better efficiency of production processes, and the internalisation of the most value-added phases of the supply chain;
• Investments for the first nine months of 2023 are related to the closing of the «TISG 4.0» and «TISG 4.1» investments related to «TISG 4.2», the expansion of commercial offices in Marina di Carrara and the development on production capacity for subsidiary Celi.
• Net Financial Debt for Eu 31mn vs Eu 11.3mn on FY 2022.

SHIPBUILDING REVENUES

KEY HIGHLIGHTS

• Shipbuilding Revenues amount to Eu 226.7mn (+22% vs 9M 2022).
• This result is attributable to:
  • i) The regular progress of existing orders;
  • ii) The signing of new sale contracts.

BREAKDOWN BY LOA, BRAND, AND GEOGRAPHY

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SHIPBUILDING ORDER BOOK – BY PROJECT AND SCHEDULED DELIVERY

REFIT REVENUES

KEY HIGHLIGHTS

BREAKDOWN BY LOA AND GEOGRAPHY

• Refit Revenues amount to Eu 32.9mn (+23.5% vs 9M 2022).
• This result is attributable to the use of the new spaces in Marina di Carrara and La Spezia, as well as the strategic scheduling of refit activities, which are more intense in the second part of the year.

NET DEBT 9M 2023 (Eu mn) IFRS Net Debt FY 2022 Dividends Sale of office building in VG Investments 9M 2023 9M 2023 Cash Outflows IFRS Net Debt 9M 2023

KEY HIGHLIGHTS

• Net Debt is equal to Eu 31mn in 9M 2023, vs Eu 11.3mn at FY 2022.
• Cash outflows for:
  • (i) Dividends for Eu 14.4mn;
  • (ii) Investments for the period for Eu 8.8mn;
  • (iii) Net Working Capital dynamics, generating a cash outflow of c. Eu 7mn
• Cash inflows for:
  • (i) Disposal of the office building in Viareggio, for Eu 10.6mn.

EBITDA & CAPEX

EBITDA

• Significant increase in marginality over time is attributable to:
  • (i) Strong attention to operating cost management.
  • (ii) Growing efficiency of production processes.
  • (iii) Benefits coming from investments in production capacity, with advantageous synergies between Shipbuilding and Refit.
  • (iv) Increase in product prices, due to strengthening brand awareness.
  • (v) Economies of scale.

CapEx

• Throughout the first nine months of 2023, TISG made Investments for:
  • (i) Completion of «TISG 4.0» and «TISG 4.1» investment plans;
  • (ii) Improvements on the La Spezia Shipyard («TISG 4.2»);
  • (iii) Expansion of commercial offices in Marina di Carrara;
  • (iv) Investments related to the increase in the production capacity of Celi S.r.l.

STRATEGIC OUTLOOK

The Italian Sea Group

PICEHIRITI

NCA REFIT

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 forward-looking 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.