Fincantieri S.p.A.

Good morning. This is the Chorus Call Conference Operator. Welcome and thank you for joining Fincantieri 9-month 2025 Results Conference Call. As a reminder, all participants are in list and 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. Folgiero, Chief Executive Officer and Managing Director. Please go ahead, sir.

Good afternoon, ladies and gentlemen, and thank you for joining us today to discuss Fincantieri's nine-month 2025 results. We are pleased to present another solid set of results building on the positive trajectory of the first half of the year. Revenue growth remains robust across all segments, supported by favorable market tailwinds, while increased operational efficiency includes an higher contribution from the defense business, keep driving margin expansion at the group level. Our underwater segment is growing according to plan and continues to deliver premium margins, strengthening its position as a key value and profitability driver for the group. We also enjoy exceptional visibility on our long-term business outlook, backed by a record-high backlog that provides a strong foundation for future growth. Finally, our initiatives to improve working capital dynamics are supporting our rapid leveraging trajectory, enhancing both financial flexibility and capital efficiency. Let's now move to page four for a brief summary of the financial and commercial highlights of this video. Revenues grew by 20.5% year-on-year to €6,725,000,000, supported by strong contribution from all business segments, in particular shipbuilding. We also achieved a significant increase in profitability, with EBITDA posting an impressive double-digit growth of 40.4%, reaching €461 million. EBITDA margin improved materially to 6.9% compared to 6.3% at the end of 2024 and 5.9% in the first nine months of 2024. This substantial and rapid growth is particularly noteworthy given that operate in a heavy industry sector with low biorhythms. came in at 1.65 billion euros, slightly better than 167 billion euros recorded at the end of 2024, with a net debt to EBITDA ratio of 2.6 times, improving compared to the ratio of 3.3 times recorded at the end of 2024. Turning to page 5, our commercial performance was remarkable in the first nine months of the year. We recorded an order intake of 16 billion euro rising by 88.4% compared to the previous year and higher than record value achieved in the whole of 2024 with a book to bill of 2.4 times. The backlog reached 41 billion euro increasing 32.3% compared to the end of 2024 with a total backlog reaching a record level of 61.1 million euro, approximately 7.5 times 2024 revenues. This gives us an exceptional visibility on the long-term business outlook and revenue stream, and represents a key part of our strategy. With the delivery schedule all the way to 2036, we can turn to our supply chain partners and agree on terms which favor both parties thanks to the long-term commitment and higher volumes we can guarantee. Let's move to page six. 2025 represents the consolidation and progress of our vision and strategy. We confirmed our guidance for year end as a demonstration of our ability to set an ambitious trajectory and to deliver it. Avenues for 2025 are expected to reach approximately 9 billion euros. EBITDA margin is foreseen in excess of 7%, building upon the material increase in profitability already recorded across all our business segments in the first nine months of this year. This leveraging path is well ahead of our 2023-2027 business plan target, and we confirm the net debt EBITDA to remain between 2.7 and 3 times in full-year results. Finally, we expect positive net income at the end of the year. Let's move now to page seven for some insights on the commercial opportunities ahead. Our order intake continues to benefit from a solid pipeline with further tangible commercial opportunities valued at approximately 26 billion euro, supported by our strong market positioning and powerful dynamics across all business segments. Cruise maintains its extraordinary momentum with a vertical increase in order across all product segments. Last September, we signed a contract with TUI for the design and construction of two vessels belonging to the Intuition class, confirming once again our strong relationship with all world's most prominent cruise operators. In defense, a preliminary agreement was signed with Greece for the transfer to the Atlantic Navy of two vessels of the Italian Navy. Hence, we expect these two ships to be replaced with new orders to the Italian Navy in the near future. Demand in the offshore specialized vessel segment remains solid. Several new orders finalized in 2025 through our subsidiary VAR, including a contract for two hybrid SUVs for North Star, confirming our leading position in this market. Lastly, in the underwater segment, we are seeing the tangible benefits of our strong commercial positioning, also thanks to vast solution for top-tire navies and to a broad portfolio of products with application in defense, commercial and dual use, as we can see more in detail on page eight. A clear example of excellence in our unmanned management system and underwater business is the Sand Marine Drone, a manned surface vessel designed for a wide range of missions, enhanced by the onboard integration of the large system, which enables the deployment of underwater unmanned vehicles. In the field of offshore subsea infrastructure protection, we signed an agreement with Jean Deneuve for the design and supply of an advanced system developed by Remazel for the transport and laying of rocks on the seabed to protect cables and pipelines called rock dumping. More recently, we signed an agreement with DEFCON, supporting Fincantieri in developing and integrating deployment capabilities for autonomous surface vehicles on its novel units. Finally, last October, we presented DEEP, an integrated and cutting-edge solution for the protection, development, and maintenance of critical underwater and port infrastructure. The system consists of a network of underwater sensors for early warning, a command and control center, a team of autonomous underwater vehicles, and an AI-based platform for data analysis and processing. These high-tech solution and partnerships showcase our positioning as an orchestrator in the underwater domain. Moving to page nine. You can see how our commercial efforts are translating into an impressive order book. The first nine months of the year, we secured a significant number of new orders, further consolidating Pincantieri's expansive global reach across all business segments and ensuring deep visibility up to 2036. In the first nine months, we delivered 19 units from nine shipyards and, as we speak, We have a full slate of deliveries scheduled up to 2036, with more to come. One prototype ship we expected to deliver at the end of 2025 will be delivered at the beginning of 2026, being a highly technological project for which we want to ensure the utmost quality at delivery. Now, I will end the call over to Giuseppe, who will discuss our financial results in more detail. Please, Giuseppe.

Thank you, Roberto, and good morning, ladies and gentlemen. I move on to page 11 on order intake, which was at 16 billion euros, greater than the whole of 2024, with a book-to-bill at 2.4 times revenues. This indicates a very strong and sustained growth of the Concrete Commercial Pipeline. fueled by demand across all our core business segments. In Chi Building in particular, we posted 4.6 billion euros in orders. That is more than twice the first nine months of 2024. Also in offshore and the other segments, orders were robust and accounted for almost 2 billion euros. On page 12, of course, The very high owner acquisition brings us again to a record high backlog of 61.1 billion euros, which stands at over seven times full year 2024 revenues, and a backlog of 41 billion euros with a soft of 20.1 billion euros. In this backlog, Cruise accounts for 34 units. Defense 29 underwater for submarines and offshore 33 vessels for a total of roughly 100 units with a clear and deep visibility for the years to come with deliveries, as we mentioned before, deliveries up to 2036. In the first nine months of this year, we have so far delivered 19 units from nine different shipyards. On page 13, financials, revenues. Illegal in excess of 6.7 billion euros up to 20.5% year-on-year. Here we have a strong contribution coming from the shipbuilding segment, which posted a 22.7% growth. And this growth is across crews and defense, but particularly in defense, we grew 38.5%. This growth is partly driven by the contract that we finalized in the first quarter of 2025 for the sales of two multipurpose combat units to the Indonesian Navy. SHIBELDINI roughly accounts for 68% of all group revenues. and offshore which accounts for 14% of total revenues rose as well but by almost 13% and this reflects the sustainable trajectory of recent years underpinned by the progressive development of the group's border backlog. Underwater revenues came at 386 million euros also driven by the consolidation of vast submarine systems in the first quarter of 2025 and the ramp up of the construction of the first submarine for the Italian Navy, which is going to be delivered in 2029. Finally, equipment systems and infrastructure revenues are stable year-on-year at 927 million euros. This is despite the reclassification of the subsidiary Cionics to the offshore and specialized vessel segments. Let's turn to page 14 with the EBDA, which is up 40.4% versus the first nine months of last year, and reached 461 million euros. EBDA margin grew to 6.9%, steadily improving from 6.3% reported at year end 2024, and 5.9 reported in the first nine months of 2021. Shipbuilding recorded an EBDA of €316 million, increased by 33% versus the previous year, with an EBDA margin of 6.5%, up 0.5 percentage points compared to the same period of 2024. And this is thanks to two drivers mainly, results of the operational efficiency initiatives deployed in the cruise sector and the growth in the defense business, higher profitability. The offshore and specialized vessels EBDA reached 57 million euros, increased by 21.4 percent compared to the 47 million euros at the end of September of 2024. An EBDA margin of 5.4 was roughly 5 percent in the first nine months of last year. The underwater delivered an EBITDA of 67 million euros with a margin of 17.3%. This confirms the segment's premium profitability. In the equipment systems and services infrastructure segment, EBITDA increased by almost 37% compared to the first nine months of 2024, reaching 68 million euros. with an improving EBITDA margin at 7.4. This improvement is mainly driven by the mechatronics and the infrastructure business. Finally, on page 15, networking capital and net debt. As of the end of September, we posted a net debt of 1.6 billion euros, roughly, in line with the 1.6 1,644 million euros recorded at the end of the first half of 2025 and slightly better than the 2024 year-end figure, which was 1.668 million euros. The leverage ratio improved to 2.6 times, and this is significantly lower than the 3.3 times of year-end 2024. In this matter, we continue to work On the optimization of networking capital, which stands at negative 465 million euros and stable compared to year end 2024, we have an increase in inventories and advances in trade receivables that more than offsets the increase in trade payables and the decrease in work in progress, construction contracts and client advances. With that, I will now hand