Fincantieri S.p.A.

Good afternoon. This is the conference operator. Welcome and thank you for joining the Fincantieri First Health 2026 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 requested star and zero on the 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.

Hello, good afternoon. Welcome to Fincantieri First Out 2026 Results Conference Call. We are pleased to report another outstanding set of results. Marked by strong margin expansion, record net profit and continued leveraging driven by solid cash generation. These achievements further demonstrate the successful execution of our strategy and the group's ability to convert strong commercial momentum into sustainable and profitable growth. We deliver the further step change in profitability with EBITDA growing 12.5% and margin reaching 7.6%. Margin expansion was mainly driven by favorable pricing dynamics and efficiency measures in cruise, higher margin on defense programs currently under construction, as well as the increasing contribution of underwater. Net profit consequently rose to a record 102 million euro, almost tripling from first half of 2025 and reaching a level close to the all-time high of 117 million euro achieved in full year 2025. Commercial performance remains particularly strong. BAF secured the largest contract in its history with the Royal Saudi Navy Faults. BAF acquired a record order in Inkfish with Inkfish for a next-generation deep-sea research basin. while new major cruise contracts extended visibility on deliveries through 2039. In the France, just a few days ago, the Portuguese and Italian governments announced an agreement for the acquisition of three French Evo frigates. Our growth strategy continues to be supported by strong financial discipline with leverage ratio decreasing to one time. Significantly improving compared to the full year 2025, thanks to cash generation over the period. Looking ahead, the progress achieved in the first half fully supports the confirmation of our 2026 guidance across all targets. Finally, we are very proud about the strategic acquisition of NextGeo Solutions, WSense, Browstech, and DevCom announced earlier this month. Together, these transactions mark a new phase in the group's evolution and accelerate the creation of an international, fully integrated underwater champion, as I will explain in a few minutes. Let's now turn to page 4. Our commercial performance remains strong. Order intake reached €6.1 billion. in the first half of the year with a book-to-bill ratio at 1.3 times. Total backlog increased 17% year-to-date, while the backlog reached 43 billion euro. Total backlog and backlog guarantee approximately 8 and 4.7 years of work when compared with 2025 revenue. Please note that order intake does not yet include a number of major contracts signed during the first six months, particularly in cruise and underwater, which are currently reflected in the soft backlog as they remain subject to financing and other customary conditions. Including this agreement, we already exceeded the approximately €11 billion order intake presented with our capital markets day February. and, as I discussed shortly, additional opportunities continue to progress across all our businesses. Let's now move to page 5. In the first six months of 2026, we delivered 11 units from eight different shipyards across the group, demonstrating the strength of our industrial execution capabilities. At the same time, our order book continues to provide exceptional long-term visibility, with 92 units currently in portfolio and deliveries scheduled up to 2036, taking into account the cruise orders signed with MCLH and Princess Cruises in recent months, which are not yet effective. Delivery visibility extends through 2039. Let's now move to page 6, and let me briefly walk you through some of the most significant commercial achievements announced during the first half of the year and in recent weeks. In cruise, we secure orders for 9 vessels for Norwegian Cruise Line, Viking Cruises, Princess Cruises and 40 In defense, we continue to reinforce our positioning across strategic programs and geographies. Key developments include the initial contract under the U.S. Navy's LSM program, covering the first four vessels and paving the way for a future award of the construction contract, as well as the full combat upgrade of the Italian Navy's PPA units and the industrial agreements with Albania, Indonesia, and Croatia, further expanding our international footprint. More recently, the Portuguese and Italian governments announced the agreement for the acquisition of three Fremivo Frigues for the Portuguese Navy. In offshore and specialized vessels, we continue to demonstrate the benefits of our diversification strategy beyond the energy offshore market. Alongside the largest single vessel order in VATS history, secured with ink fish, We signed additional contracts in the fisheries, maritime infrastructure and specialized vessel segments, including an advanced third trawler for Roslund Rift and two multi-mission buoy and lighthouse maintenance vessels for Trinity House. Finally, underwater, PAS secured the largest contract in its history with the Royal Saudi Naval Force and Only a few days ago, we signed a contract amendment with OCAR for approximately 317 million euro covering logistic support initiative and vast countermeasured systems for the U-212 NFS Summary Program. Furthermore, we expect more underwater opportunities coming from the new acquisition announced. Moving to page 7. The positive tailwinds and solid performance delivered give us full confidence in our 2026 guidance trajectory. We confirm the targets for the end of the year. Revenue in the range of 9.3 to 9.4 billion euro. EBITDA in the range of 700 to 710 million euro, with an EBITDA margin confirmed at approximately 7.5%. Net profit in the range of 140 to 180 million euro. And finally, net debt adjusted to EBITDA ratio at approximately two times, which equals to 1.3 times, including the capital increase completed in February 2026. Let's turn to page eight for more color on the recent M&A announcement in the underwater. On July 2026, we announced the acquisition of NexGeo Solutions, WSense, DEFCON, and Grand Tech, a decisive step in the creation of a fully integrated international underwater champion. Thanks to these acquisitions, the group establishes the first vertical integrated underwater operator, capable of delivering end-to-end solutions across the entire value chain, Moving to page 10. Let me remind you that these acquisitions are largely financed through the ADV capital increase successfully completed in February 2026. The capital increase was approved by shareholders in 2024 and specifically conceived to support the group's inorganic growth strategy while preserving financial discipline. We successfully executed the transaction during a favorable market window before the escalating geopolitical tensions affected market conditions, and demand proved exceptionally strong, with the offering multiple times oversubscribed. Today, shareholders can clearly see the rationale behind that capital increase, as the proceeds are being fully deployed to create industrial value through the expansion of our underwater segment. Importantly, with the ABV proceeds only being supplemented by other available resources, the acquisitions have no impact on our 2026 leverage guidance, while strengthening the leveraging trajectory set out in 2028 and 2030 business plan targets. Let's turn to page 11. The first wave of acquisitions with Remazel & Bass laid a solid foundation for the development of the underwater segment, expanding Cinquantieri's presence across defense tool use and commercial applications, while delivering significant growth in revenue, profitability and cash generation. The second wave expands significantly the group's presence and capabilities across specialized services in marine survey, geoscience, and marine construction support, proprietary unmanned underwater and surface-grown technologies, and wireless communication systems for the internet of underwater tanks. By bringing together these eight market-leading companies, we are creating Europe's first fully integrated underwater ecosystem. a platform that can operate, connect, protect and govern the underwater domain by combining services, autonomous vehicles, sensors, communications, defense systems and strategic platforms into a single industrial capability. Moving to page 12, you can see the comprehensive portfolio of underwater solutions now brought together within our underwater segment. What makes this platform unique is not only the breadth of technologies offered, but also their ability to operate within a single integrated ecosystem, offering a one-stop-shop proposition. By combining services, autonomous systems, sensors, communication technologies and underwater and surface platforms, we can increasingly act as a front-end service provider, orchestrating integrated end-to-end solutions tailored to our customers' operational needs. This enables us to evolve into a prime contractor in the underwater domain. Moving to page 13, from a financial standpoint, the underwater segment has already delivered impressive results, strongly supported by the first wave of acquisitions, with Bas and Remazel providing outstanding contributions in terms of revenues and EBITDA. Building on the positive boost of the first wave, the second wave of acquisitions further enhances The segments scale, profitability and contribution to the group's consolidated results and enables us to anticipate by four years the original targets for the underwater segments for 2030. On a pro forma basis, revenue is expected to approximately 1.1 billion euro in 2026, increasing to 1.8 billion euro in 2030. EBITDA is expected at approximately €220 million in 2026, growing to €420 million in 2030. The EBITDA margin is expected to further increase from the current high double-digit marginality of the underwater segment, reaching 19.2% in 2026 and increasing up to 23% in 2030. The underwater segment is also highly profitable at group level, delivering on a pro forma basis an additional 60 million of net profit in 2026 and 130 million euro in 2030. With this, I will end the call over to Giuseppe for more color on financials. Please, Giuseppe.

Thank you, Pierroberto, and we move on to page 15 in S.A. that spent 6.1 billion euros in the first half of this year. These 6.1 billion euros mainly come from orders signed previously, but that became effective during the first six months of the year. We must know that on top of that, during the first month of this year, we signed orders in excess of roughly 12 billion euros Those orders, of course, are not effective, but they will become effective in the next 6 to 12 months, and this is a testament of the very vibrant commercial activity in our markets. And if we move to page 16, this commercial activity reflects very well on the total backlog, which at least almost 74 billion euros Both soft backlog and backlog increased. Backload is 43 billion euros, notwithstanding, of course, the activity and the revenues we booked in the first six months, and a soft backlog of almost 31 billion euros. We delivered 11 units this year from eight different shipyards, and we moved to phase 17, where we discussed revenues. Revenues reached and Alessandra Battaglia. In the second quarter of this year, of course, this is due to the progress of production activities that are related to the existing backlog, and this acceleration offsets the unfavorable comparison with the first half of last year, where we had the one-off revenue recorded for the two vessels for the Indonesian Navy. Revenue grew in the cruise business by almost 15%, driven by backlog execution and some progress on ships that were acquired at better prices compared to the past. Offshore revenues grew by 22.4%, compared to the same period of last year. Underwater posted a growth of almost 30% and also equipment system and infrastructure recorded revenues up by 16.2% at 720 million, mainly driven by mechatronics and the infrastructure business. On page 18, significant increase in EBDA. We reached 7.6% EBDA margin. Last year we reported 6.8 and this is a very strong increase with sheet building that improved materially to 7.5% supported both by favorable pricing dynamics and efficiency initiatives that we keep undertaking throughout the course of the year and as part of our and, of course, please note that this margin growth comes notwithstanding the revenues, the decrease in revenues in defense. So it's quite remarkable, let me say. Offshore EBITDA rose to 40 million euros, confirming the growth trajectory of the business, with the marginality broadly in line with the trend of recent years. We had a substantial growth of almost 30%, and the margin of 17%. And this confirms that this segment comes at a premium with respect to the other segment, the other business segments. Equipment systems and infrastructure segment delivered a strong contribution to the group's profitability with EBDA rising by 9.5% and EBDA margin reaching 6.5%. This is all across the three segments. On page 19, of course, significant growth in net profit, three times net profit levels on the first half of last year, and this is in track with the guidance, on track with the guidance that we gave for 2026. Net profit growth was supported by very strong operational performance that we saw on the previous pages, 102 million euros, and almost reaching the level of the full year 2025. I remind that we closed at 117 million euros in 2025. Again, strong operational results coupled with the reduction of the cost of debt and this is structural and ongoing and will further improve in the quarters to come. And of course this is also linked to the disposal of non-strategic joint ventures, non-strategic states in joint ventures that we had in China and a lower impact and this is structural again, a lower impact of asbestos related litigation costs. adjusted net result excluding those extraordinary non-recurring items was positive for 130 million euros compared to 48 million in the first half of last year. On page 20, net debt, adjusted net debt strongly improved compared to the end of 2025, reaching 750 million euros. Of course, this value includes the effect and I just know that would be 1.2 billion euros roughly and again this is as well supported by solid cash flow generation. Leverage ratio improved to one time compared to 1.9 EBITDA compared to as of last year, as of end of the year 2025 and this reads 1.7 excluding the effect of the capital increase. that was in capital negative at €723,000, slightly improving compared to end of last year, and this is thanks to the increase in work in progress and somehow higher trade receivables, trade payables, sorry. Now I leave the word back to Pierroberto for his concluding remarks.