Fincantieri S.p.A.

Good morning. This is the CoruSchool conference operator. Welcome and thank you for joining the Fincantieri first quarter 2022 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. Gaglia, General Manager. Please go ahead, sir.

Thank you. Good morning, everybody, and welcome to the first quarter presentation. I'm here with Giuseppe Dada, our CFO, and our team, and we'll guide you through the first quarter results, 2022. We can start saying that it's a robust set of results. Revenue came in at roughly $1.7 billion, excluding pass-through activities. with an increase year-on-year of roughly 18%. Contribution has been positive and consistent across all segments. The BDA is up roughly the same measure, around 17%. It's reached almost 120 million with a margin of 7%. This confirms operating profitability and confirms also the resilience and ability of the company to face unprecedented increase in raw materials and challenging condition in the supply chain and I would say in overall business environment. Net debt at south of a billion, 940 million to be precise, brought in line with a year-end 21 and well below last year figures. Notwithstanding capex, capex expenditure plan is going on, is proceeding according to plans, and higher revenues. The backlog is quite solid. The total is around $34 billion with 111 units representing a multiple of five times plus our 21 revenues, while the backlog is $25 billion with 93 units. Ships delivered in the first quarter. There are five ships and they've been delivered in four different shipyards. And I will just say that diversification and consistency across different business lines and different geographical footprints is one of the characteristics of think and hearing. CapEx, as I said before, is mainly devoted to building and strengthening our U.S. shipyards capabilities, upgrading our yards in Italy and investing in technology. Production volumes are coming in around 4 million hours. That's a very, very high productivity level, and I would say, as a general comment, even considering that we do business with foreign clients, which represent almost 90% of revenues. This represents, I would say, confirms the resilience of our business. If we flip to page six, we have some comments regarding the business update. As I briefly hinted before, operating performance has been consistent across different segments. Delivery first quarter has been of six Princess Cruises in Monfalcone, enable construction activity for the Qatari Minster Defense Continuo at regular speed as anticipated, with the launch of the fourth combat and the delivery of the first OPV unit. Activity also for Italian Navy progress has seen the delivery of the first EPA which is the first of seven units, and construction activity for the first two of the generation of submarines for the Italian Navy has also started. I would say very constructive news coming from the offshore division thanks to the competitiveness of our subsidiary VARD in building a market leading position on international level in the vessels for offshore winds. We've also been awarded a new contract for six marine robotic vessels for Ocean Infinity. And in the last division, ESS will launch the construction activity for MSC terminal in Port Miami. Strategic PSG initiative. You can see on page 7 that we are fully committed on four different axes. We would like maybe just to highlight the fact that we continue to work and commit ourselves in, I would say, wide range of partnerships from decarbonization to digitalization to ecological transition. We signed a few memorandum understandings, one with EMEA, regarding energy transport and circular economy, with RINA for decarbonization of parts, infrastructures. And regarding people and society, we brought ourselves with remembering and reminding that Varda has offered its facilities in Romania to accommodate up to 250 Ukrainian refugees. We launched School for Life, along with other important Italian companies, basically to combat the need issues, which is an important and a harsh one in our society. And we also launched, as announced a few months ago, a corporate nursery program. working with our subsidiary Nextech for an agreement with Amarillo Leonardo to offer digital solutions applied to dynamic monitoring for the security of Italian critical infrastructure. Last but not least, we had an agreement with BNP Paribas for issuing a sustainable lean guarantee facilities related to the achievement of two KPI regarding energy consumption management and sustainable supply chain. You know how important supply chain is for us. And the key part of our effort is also to involve all of our suppliers, most of them, in our effort. At page 8 you can have a picture of our ratings and awards just to confirm our efforts to become a mode of excellence addressing social, environmental and government topics. Page 9, we have deliveries in order. We already commented before. Just highlight the fact that we've been working for different for this delivery, and we've been also managing to acquire new orders, roughly half a billion. And the majority of these offshore divisions represent the very bulk of these new orders acquisition. In terms of backlog, page 10, you can capture with a glimpse how diversified our backlog is, how deep in terms of duration, and that allows us to state that we have long-term visibility for a backlog both cruise and naval, and that the diversification of our wind offshore operations allows us to be very constructive for the future, considering also the development and investments which are expected in the next few years in order to drive this energy transition process. I will hand it over to Giuseppe for financial results.

Good morning, everybody. I'm on page 12 now. For a quick comment on all the intake, we already went into it, but what we need to note is the very important pickup in all the acquisition with the reference to the offshore specialized vessels. And you will see also this result has been consistently going on through the last quarters, and it has had a very important impact. on revenues. Backlog visibility is north of 5.2 times current revenues, so it's still very good, notwithstanding the lack of new orders in the cruise segment for the moment. Revenues on page 13. We grew roughly 18%. You can easily note that the bulk of the revenue growth comes from the novel. shipbuilding activity and offshore, which doubled revenue with respect to the first quarter of last year, and of course also equipment systems and services thanks to the consolidation of the in-sub acquisition. We do expect, of course, cruise revenues to grow throughout the year, and therefore don't take this first quarter as a reference. for the year 2022 when it comes to cruise revenues that are still in a growth path, at least for this year, 2022. 86% of revenues, we said it before, come from international clients, confirming our truly global footprint. As with EBDA on page 14 and 15, EBDA growth roughly mirrors the growth in revenues. You saw that, you can see that we did roughly the same production hours as last year, as the first quarter of last year. We are working at full production capacity at this point in time. And the growth, of course, comes mainly, on page 15 now, mainly from higher production volumes We have to say it differently. From the production of projects that have higher margins, let me say, and this is the contribution of the revenue growth, notably of the novel segment. And, of course, also when it comes to shipbuilding, of course, improvements also in operating margins thanks to the fact that we're still treating the benefits of all the efficiencies and change management that we implemented in the past few years. But as we said also in the past conferences, allows us at this point in time to offset and compensate the very important, I would say, increases in commodity prices. CAPEX program is proceeding as planned. We still are in the tails of the investments in our Italian shipyards, notably . These investments should phase out this year. And we have a very strong activity in the United States in order to be ready to start the construction of the program for the United States name. As we're working out the net financial position, basically the two figures are roughly and broadly unchanged with respect to last year. We do expect, as I said, a pickup, very important pickup in the second part of the year of cruise revenues as we expect to deliver seven vessels this year and seven cruise vessels next year. Therefore, you're going to see networking capital levels to increase. There is already evidence of this. If you look at the work in progress, it has increased by roughly 800 million euros in the first six months, notwithstanding the delivery of one cruise vessel. And it's also evident that we financed the bulk of this growth through construction loans, which have increased from roughly 1 billion euros to 1.5 billion euros. Therefore, net financial position is roughly unchanged. Of course, we reiterate the message of being able to fully support our networking capital needs with our funding sources. And all our funding sources do not have no covenants at this point. And at this point in time, also, we do not have any major exposure to interest rate risk as we are fully edged. Now I turn the word back to Mr. Gaglia for the outlook.