The Italian Sea Group

Investor Presentation • Sep 7, 2023

The Italian Sea Group

FINANCIAL RESULTS 11 0 = 592 0,243

PIC EHIRTTI

NCA REFIT

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 05/09/2023.

REVENUES AND EBITDA EVOLUTION

1H 2023 HIGHLIGHTS

An event involving owners, brokers, authorities, celebrities, and press, where Mr. Giovanni Costantino, Founder & CEO of The Italian Sea Group, mapped out the course for the future of Italian yachting, explaining the crucial moments of TISG's success story, its excellences and the objectives for its brands.

A laser mapping show unveiled the mega yacht and left the stage to Giorgio Armani's Spring/Summer 2023 collection, ending with a traditional greeting from the designer.

In March 2023, TISG presented the new Perini Navi fleet, having the objective to create a line of vessels with the characteristic and iconic Perini Navi elements revised in a modern fashion, aiming for large spaces, brightness, and comfort during sailing. There are three lines of vessels of 48, 56, and 77 metres.

The fleet, called «Genesis», attests Perini Navi's ultra-high-level positioning as global player for large sailing yachts.

M/Y Admiral Kenshō (75mt) has been named "Motor-yacht of the Year" and has won in the "Displacement Motor-Yachts 1'500GT and Above" category at the renown 2023 World Superyacht Awards by Boat International.

The project's technical challenges have been faced with functional and, at the same time, elegant solutions, which have redefined the boundaries of space, distribution, and luxury, projecting the Owner's personal vision towards a new concept of the sailing experience.

M/Y Kenshō, 75mt

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M/Y Silver Star, 55mt

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The Italian Sea Group

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Perini Navi Ketch, 56mt

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M/Y Tecnomar EVO 120, 37mt

The Italian Sea Group

M/Y Tecnomar for Lamborghini 63, 19.8mt

The Italian Sea Group

M/Y Picchiotti Gentleman, 24mt

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MONACO YACHT SHOW 2023

The Italian Sea Group officially announces that it will be take part in the 32nd edition of the

Monaco Yacht Show

The Company will present 6 yachts, among which 3 new projects of high stylistic, technological, and commercial value

A conference call on September 26th, at 3pm, will reveal interesting news about all the Group's brands

AGENDA

Executive Summary
Business Review
Financial Review
Q&A and CMD Highlights

EXECUTIVE SUMMARY

1H 2023 RESULTS

• Order Book for Eu 1.24bn, +35% vs 1H 2022
• Revenues for Eu 165.9mn, +24% vs 1H 2022
• EBITDA for Eu 27.3mn, +37% vs 1H 2022, with a margin of 16.4%
• Net Result for Eu 13.6mn, +78% vs 1H 2022
• Net Debt for Eu 19.2mn versus Eu 11.3mn at FY 2022

SIGNIFICANT EVENTS FOR THE PERIOD

• M/Y Admiral Kenshō (75mt) awarded "Motor-yacht of the Year", confirming the high positioning of TISG's products
• Disposal of an office building in Viareggio, with a net cash-in of Eu 10.6mn
• ESG Rating of BBB, in the high performance range, issued by Cerved Rating Agency
• Improvement of Credit Rating to A2.2, issued by Cerved Rating Agency

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 GUIDANCE CONFIRMED IN THE HIGH END OF THE VALUE RANGE

VISIBILITY AND QUALITY OF BACKLOG

• Industry leading levels of backlog, with visibility until 2027 and balanced breakdown between geographic areas;
• Gross Backlog at 30 June 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
Order Book - 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	2.0

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.

NET DEBT 1H 2023 (Eu mn) IFRS Net Debt FY 2022 Dividends Sale of Viareggio office building 1H 2023 Investments and CELI acquisition 1H 2023 Cash Inflows IFRS Net Debt 1H 2023

KEY HIGHLIGHTS

• Net Debt for Eu 19.2mn in 1H 2023 vs Eu 11.3mn at FY 2022.
• Cash outflows for:

(i) Dividends at Eu 14.4mn;

• (ii) Investments & Celi acquisition, for Eu 8mn.
• Cash inflows for:
  • (i) Eu 10.6mn for disposal of the office building in Viareggio;
  • (ii) Eu 3.9mn of cash generation from operating activities during the period.

ESG ACHIEVEMENTS SO FAR

NEXT ESG GOALS

ISO 14001 Certification for Environmental Management Systems

Increase of % of renewable energy on total energy consumption (La Spezia)

Development and maintenance of a sustainable supply chain

Continue supporting suppliers' liquidity through reverse factoring agreements

Initiatives to foster employee welfare

AGENDA

SUMMARY OF KEY 1H 2023 RESULTS

• Increase in Revenues by +24% is mainly attributable to the development of Shipbuilding revenues, due to the progress of existing projects and the signing of new sale contracts.
• Increase in marginality in time is attributable to a strict operating cost management, efficiency of production processes, and internalisation of key supply chain activities.
• Investments of the period are mainly related to the completion of investment plans «TISG 4.0» e «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 Debt for Eu -19.2mn, with respect to Eu 11.3mn on FY 2022.

SHIPBUILDING REVENUES

KEY HIGHLIGHTS

• Shipbuilding Revenues amount to Eu 139.4mn (+24% vs 1H 2022).
• This result is attributable to:
  • i) regular progress of existing projects;
  • ii) signing of new sale contracts for large yachts.

BREAKDOWN BY LOA, BRAND, AND GEOGRAPHY

22

REFIT REVENUES

KEY HIGHLIGHTS

BREAK DOWN BY LOA AND GEOGRAPHY

• Refit Revenues amount to Eu 23.0mn (in line with 1H 2022).
• It is relevant to note that Refit revenues are strictly linked to the strategic planning of maintenance contracts; for this reason, an acceleration in this division's revenues is expected in the second half of the year.

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 half of 2023, TISG made Investments for:
  • (i) The 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.

AGENDA

SUMMARY OF PROFIT & LOSS

EMARKET SDIR
CERTIFIED

Summary Profit & Loss	30/06/2023	30/06/2022
In thousands of Euros
Revenues	165,903	133,618
% YoY	24.2%
Cost for outsourced work	-67,851	-53,780
Raw materials	-32,134	-35,597
Personnel costs	-18,691	-14,272
Other costs	-19,969	-10,061
EBITDA	27,258	19,908
%YoY	36.9%
% on revenues	16.4%	14.9%
Depreciation, amortisation, and write-downs	-5,537	-4,660
EBIT	21,721	15,247
% on revenues	13.1%	11.4%
Net financial charges	-2,179	-1,224
Income from extraordinary charges	-404	-3,361
Taxes	-5,544	-3,044
Net Result	13,593	7,618
% on revenues	8.2%	5.7%

• Increase in Revenues, +24% vs 1H 2022, is due to the increase in Operating Revenues, amounting to Eu 162.5 mn at 30 June 2023;
• Increase in EBITDA (+37% vs 1H 2022) is mainly due to strict cost and budget management and the efficiency of production processes thanks to investments on facilities;
• Decrease in the impact of Operating Costs, especially with respect to Raw Materials, also thanks to the externalisation of the metal carpentry phases, leading to an increase in EBITDA margin from 14.9% to 16.4%;
• Strong increase in Net Result (+78%).

NET WORKING CAPITAL

• Increase in Net Working Capital is due to: (i) a decrease in trade payables; (ii) an increase in trade receivables; and (iii) change in the item Other current assets and liabilities, which includes the advance payments for Tecnomar for Lamborghini 63 yachts
• Trade payables refer to operating activities related to the projects in progress (Shipbuilding and Refit) as well as investments for the period;
• Trade receivables refer to activities related to shipbuilding and refit projects in progress. Specifically, the increase from Eu 21mn to Eu 35mn comes from invoices issued before 30 June 2023 whose payments have been received after the end of the semester;
• It is important to note that the item Inventories and payments on account does not include trade-ins or used yachts, due to the Group's strict commercial strategy, which strongly limits inventory risk.

Net Working Capital	30/06/2023	31/12/2022
In thousands of Euros
Inventories and payments on account	8,660	3,573
Contract work in progress and advances from customers	26,097	32,667
Trade receivables	35,040	21,469
Trade payables	-73,463	-78,770
Other current assets and liabilities	-29,238	-31,061
Net Working Capital	-32,904	-52,122
Inventories and payments on account	2.6%	1.2%
Contract work in progress and advances from customers	8.0%	11.1%
Trade receivables	10.7%	7.3%
Trade payables	-22.5%	-26.7%
Other current assets and liabilities	-8.9%	-10.5%
Net Working Capital (% on LTM Revenues)	-10.1%	-17.7%

NET DEBT

EMARKET SDIR
CERTIFIED

Net Debt	30/06/2023	31/12/2022
In thousands of Euros
A. Cash	39,584	81,317
B. Cash equivalents	25,748	0
C. Other current financial assets	0	0
D. Liquidity (A)+(B)+(C)	65,332	81,317
E. Current financial debt (including debt instruments, but excluding the current portion of non-current financial debt)	-2	-34
F. Current portion of non-current financial debt	-11,737	-14,163
F.1 Other current financial payables	-2,554	-2,292
G. Current financial indebtedness (E+F)	-13,643	-16,490
H. Net financial indebtedness (G-D)	51,689	64,827
I. Non-current bank debt (excluding the current portion of debt instruments)	-60,390	-66,287
J. Debt instruments	0	0
K. Trade and other non-current payables	-9,941	-9,912
L. Non-current financial indebtedness (I+J+K)	-70,982	-76,198
M. Total financial indebtedness (H+L)	-19,292	-11,371

• Net Debt for Eu -19.2mn reflects:
  • i. Cash out for Eu 14.4 mn for the payment of dividends;
  • ii. Investments for the period, for Eu 6.1 mn.
• Net Debt calculation includes:
  • i. the current values of fees due to the Port Authority for the state concessions of Marina di Carrara and La Spezia, equal to Eu 6mn;
  • ii. Disposal of an office building in the Viareggio building, for a net cash inflow of Eu 10.6mn;
  • iii. The residual of the tax payables on behalf of subsidiary Celi, for Eu 1.8mn, which are to be paid in instalments ending in 2026.

STRATEGIC OUTLOOK

The Italian Sea Group

PICEHIRITI

NCA REFIT

AGENDA

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.

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.

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).

QUALITY & VISIBILITY OF THE ORDER BOOK

The Italian Sea Group boasts an Order Book in excess of one billion Euros, evenly distributed across different geographies.

ORDER BOOK COMPOSITION

• Growth in demand from Americas and APAC region (from a total of 37% in FY 2020 to c. 60% in 1H 2023).
• Growth in the Order Book with visibility up to 2027.

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.

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.