Fincantieri S.p.A.

Good morning. This is the Coru School Conference Operator. Welcome and thank you for joining Fincantieri First Half 2021 Results Conference Call. As a reminder, all participants are in listen-only mode. After the presentation, there will be an opportunity to ask questions. Should anyone need assistance during the conference call, they may signal an operator by pressing star and zero on their telephone. At this time, I would like to turn the conference over to Mr. Bono, Chief Executive Officer. Please go ahead, sir.

Good morning, dear all. Welcome to our conference call. Mr. Galli and Mr. Dato will show you that our first half 2021 results display a true positive turnaround of the group performance. But before that, I will just underline a few aspects that, in my opinion, stand out. During this time, deeply influenced by the pandemic and other difficulties, we proved beyond any doubt our skills in adapting our operations, even in adverse conditions with of qualified workforce and the values of components and raw materials. We can claim our business is robust and sustainable, two elements that are essential to be competitive in the current global economic scenario. We can say that we have already laid the foundation for what Fincantieri will become 10 years from now. In fact, thanks to this order acquired in the defense business in which we established our leadership, we are positive and will achieve higher marginality and a strong cash generation. while keeping the highest production standard on the market. I want also to underline that those orders are just an example of what we can achieve thanks to our competencies and capabilities, as well withstood by our long-term vision. our competencies in non-maritime sector and with the satisfaction we are starting to see very good results. The commitment and the determination of our people and of those of our suppliers have never been so high, even during the dark hours over the last 18 months. And for that, I want to thank each and every single one for their dedication. This is also why I feel we can reach outstanding economic and financial performances in the next future. personally proud to see that our efforts allow Fincateri to grow and become such a strong and global group. I wish this gloomy period will soon come to an end, letting us all come back to a normal life. And now I leave the floor to Mr. Galli. Brief.

Thank you and good morning to everybody. We're here to present what we consider a very healthy set of results. Key messages are we're back to profitability, revenues up 28% excluding pass-through activities. The BDA is roughly 220 million with a margin which is in excess of 7% compared to the 5% recorded in the first half of last year. The net income is around 50 million, with 42 million extraordinary costs. And net debt is in line with the first quarter results. It reached 1.6 billion, but as you may know, we had three ships delivered in July, so that net debt and construction loans are now back to a very low level. We can confirm our guidance for 2021. Revenue expected to grow by more than 25% and with EBDA margin around 7%, notwithstanding increasing commodity prices. Total backlog is very solid with a number of 37 billion, which is about seven times 2020 revenues, 111 units. Backlog with 93 units and soft backlog with 9.4 billion. Production volumes are a historic high. We've been working 8.4 million production hours in Italian sites with a growth of 50%. That was instrumental to deliver on the backlog we have been building over the years. and we can say that we are in line with the delivery schedule. Corporate vaccination program has been successfully launched and has been very well received by both our colleagues and all the subcontractors. In terms of delivery, seven ships has been delivered from six different shipyards and six cruise ships to be handed over in the second half. Actually, three have already been delivered in the month of July. In terms of new orders, as you may know that U.S. Navy has assigned the second option for the future frigate. That is a very important part of the progress we are building in U.S. with the role of prime contractor for the six frigates in the Indonesian Navy. reached an agreement with MSC to build a new cruise terminal in Miami. 85% of our revenue base in this first half of 2021 has been represented by international clients, and 80% of the production has been carried out here in Italy. If we go to page six, we have a brief business update. Five cruise have been delivered. in this period, after which three in July. What is important to note is that we have a very broad and diversified client base, which is certified also in this first month of 2021. You can see we've been delivering both for Viking, Apagloid, Virgin, MSC, Holland America yesterday. In terms of defense, we already mentioned the Indonesian contract and the second consolation class frigate for U.S. Navy. It's really important to see how the success in U.S. last year allowed us to go with this very prestigious, very important reference every time we have to deal with new clients. In terms of offshore and specialized vessels, Varda, our Norwegian subsidiaries, have been providing North Star Renewables, three operating vessels, to be deployed at one of the largest European wind farms, which is North Bank, east of England. Varda also is about to supply cable repair vessels to Orange Marine. In terms of equipment, systems, and services, we partnered with MSC for the construction of Port Miami, a very important project which is about to be delivered in the next two and a half years, while Fincantieri Next Tech has been finally launching the operational execution of the agreement reached with Autostrada and IBM. If you turn page and look at key strategic initiatives, we continue to be totally committed on environmental transition. We are collaborating with Enel, Enel X particularly, to build the next generation port infrastructure, which is key for a new way of cruising. We've been partnering with a company, Feist Electronics, to build lithium-ion batteries. that is about the production expected to be launched early next year. And in terms of building hydrogen-propelled vessels, we partner with both MSC, one of our most important clients, and SNAM for a feasibility study to design and build the first hydrogen-powered cruise ship. In terms of sustainable mobility, with our subsidiary, we partner with Almaviva to deliver program to support digitalization process in transportation and logistics. And last but not least, we partnered with Comal from the Exo Group to develop prototypes, robotized steel welding solutions in our yards. We've been investing a lot to provide our shipyards with state-of-the-art technology, taking also the opportunity to be in a position to invest for better technology, more competitiveness in our yards, also in light of our competitive position versus other players. A brief update on ESG activity. In terms of environment, clearly tackling climate change is one of our key priorities. 100% of electricity needed in Italian and Romanian yards have been purchased from renewable sources. It's also important to highlight how two-thirds of our R&D budget is devoted to clean tech. In terms of social, clearly protecting the safety of our people, of our suppliers, of our communities has been of paramount importance. We also implemented five shifts in order to ensure a productive production activity, efficient one, but also enabling safety and social distancing. We already mentioned the corporate vaccination program in our yards. In terms of governance, we approved a group tax strategy, which is fully in compliance with the GRI standards. And rating agencies have been appreciating our progresses. Gaia Rating, which is a French rating agency, awarded us a very high score, 85 out of 100. And in this ranking, we are the second one in a sample of 500 plus industrial companies worldwide. Green Star 2021 Steel from the German Institute for Quality and Excellence in Safety and Improvement in Safety awarded by the FMM. That testifies our commitment, and clearly our commitment is about to stay for the years to come. Next page, we can have a look at new orders, shipbuilding. We had, as we said, the frigates for U.S. Navy, and then this Somnio super yacht project, maybe some of you already read about it. It's an innovative project, and we're really happy to collaborate with this entrepreneur to launch This is an innovative solution. In terms of offshore and specialized vessels, free services operation vessels for North Stars and deliveries, we already elaborated about that. Again, I would like to highlight diversification of our client base, but also diversification of our industrial footprint. You can see that not just Italian yards, but also Romanian, Vietnamese, are working and allowed us to have a unique industrial footprint. Next page, about backlog. You see all the numbers. Again, it's important to highlight the visibility that is provided by this backlog. Indonesian projects included in the soft ones, and you can see that boat and cruise enables The visibility is guaranteed 25, 26 and beyond. While on the offshore specialized vessels, we have ships and vessels of totally different dimensions, but we are pretty much encouraged by what we see in the markets. I will hand it over to Giuseppe for the analysis of the financial results. Thank you.