Sanlorenzo Spa

Good afternoon to everybody. Thanks for being here with us. And as always, I will pass the floor to Attilio, which is our CFO, to present the Q1 2025 number.

Perfect. Thank you, Massimo, and welcome to everyone. So we can start directly with the highlights for Q1 2025. The first quarter show the San Lorenzo Group continuous expansion with a growing line with our guidance 2025. Performance and result are once again direct consequence of the unique San Lorenzo business model and top and positioning brand. Now we can analyze a figure, and in particular, net revenue yachts grow 9.6% at 213.5 million euro, led by the excellent performance by Superyacht Division and contribution from Nautos One, and great result of the American region and Europe. EBITDA increased 8.5% year-on-year at 37 million euro and EBIT margin is 17.3% with a not relevant dilution considering Nautilus I consolidation. EBITDA benefited once again by effect of price and product mix at gross margin level. EBIT at 27.8 million euro increased 4.2% considering Nautilus I consolidation and the last significant investments. Group net profit grew up 80% year-on-year with a total amount of 21.2 million euro, with a margin of 10% on net revenue new yachts, double digit then. The organic investments 5.8 million euro, mainly related to the increase in product development and industrial capacity, new industrial capacity, with a reduced incidence on net revenue in New York at 2.7%. And then the net financial position at 28.1 million euro net debt end of March 2025 with a temporary cash absorption of 57.2 million euro from last December considering the seasonality of the working capital typical of the first quarter of the year and also the extraordinary cash flows out linked to the buyback program and the acquisition for a total of 4.5 million euro. Then we can analyze more in detail the top line. The quarterly revenue evolution shows consistency versus 2025 guidance with a sustainable growth of 9.6%. And we have a strong performance by superior division, plus 10.4% year on year. driven by the steel line, increasingly appreciated for the innovative contents. And then the yacht division generated approximately 50% of the total revenue, down compared to the previous Q1 2024, mainly due to product mix and softer demand dynamics for models below 13 meters. Blue Game generated around €20 million revenues, minus 5.6% year-on-year, confirming strong resiliency of the peculiarly challenging segment of yachts below 24 meters. Then, Nautilus One division reported the net revenue yields of 23.8 million euro in the first quarter, in line with the expectation and with the plant integration and business development process. The breakdown by geography confirms the expansion of the market in the America region, plus 40.6% year-on-year after strong order intake in the last quarters, and positive contacts from the Palm Beach boat shows. Now, Americas is at 20.6% of total revenues, of which just 8% are linked to U.S. customers and below 5% for 30 meters products. Also considering that the attribution to the region is linked to the UBO of each contract. Europe grew up 8.8% year on year considering the wide local customer baseline. And then APAC region posted a slight increase showing the first positive signals of dynamism while Middle East decreased particularly minus 25.1% in reasons of solid deliveries concentrated in Q4 2024. About profitability, the BDA margin grew by 8.5% year-on-year, reached the 17.3% on net revenue in yachts, considering the marginality continued expansion and the negligible margin dilution after consolidation impact for the full quarter . The EBIT increase plus 4.2% year-on-year on EBIT margin decrease at 60 basis points at 12.6%, considering higher DNA incidence of Nautilus 1 due to smaller scale and legacy investment for the division. The group net profit grew up 80% at 10% on net revenue yields with a positive effect of tax benefit and despite higher financial costs from acquisition financing. About backlog, the evolution of the top line is driven by the solid backlog that reached, you can see, the level of 1.2 billion euro last March 2025, that confirmed a dynamic market, especially above 30 meters. and significant is order intake in Q1 2025, 178 million euro plus 6% compared with the first quarter 2024, and considering the typical seasonality of the business when Q1 is a quarter with a low orders collection. Furthermore, backlog is very consistent and high quality, in consideration that it is sold 89% to final customer, thanks to the unique San Lorenzo business model. The solid backlog gives to the Group an extraordinary visibility for the future in terms of results, with a portion of €700 million related to 2025 representing around 71% coverage of the mid-point guidance 2025, consistent with the coverage of 72% in the first quarter 2024. In addition, we have around 500 million euros related to 2026 and beyond, so a very important visibility. Analyzing the backlog by division, the waiting lists are well filled in all business units and we saw delivery up to 2026, 2027, 2028 respectively for the blue game yacht and super yacht divisions and also for the new swan division the sole deliveries are up to 2027 and all the division have high percentage of yachts sold to final customer 100% for Superyacht and Swan, 72% for the Yacht Division, and 53% for Blue Game Division. Remarkable indicator considering the market segment below 24 meter. About the net backlog, approximately 1 billion euro end of March 2025, after the normalization phase of the order intake, the visibility level remain high and it is not particularly affected by current cyclicality of below 24 meters yachts. In fact, after the accessional post-pandemic phase, the historical net backlog quarter evolution shows for Q1 2025 a coverage order of one time the full year 2025 revenues. And this level is well above Q1 2019 coverage of 0.8 time and above the typical pre-COVID coverage in the range of 0.8-0.9 time. Then about the evolution of the networking capital and net financial position that are absolutely strictly linked to the trend and reflects the usual seasonality of the Q1 business. In particular, the net working capital end of March 2025 is 119.5 million euros positive, especially considering the normal seasonal cash absorption of Q1 as the similar evolution you can see for Q1 2024 before the Mediterranean deliveries phase peak in the summer season. and in addition the support in terms of inventory build up to the new direct distribution in apac region and also extension in direct distribution in europe and americas therefore the end of march 2025 of 28.1 million euro reflects the seasonality of the networking capital and in addition extraordinary cash out of 4.5 million euro related to the buyback program of 3.7 million euro and the purchase of the stake 60% of AF Arturo Foresti, a strategic supplier for electrical systems for 0.8 million euro. Therefore, additional 3.7 million euros are returned to the shareholders, considering extraordinary buyback in Q1 2025. The reported net debt and of... March 2025 includes IFRS 16 net liabilities for 24.1 million euro versus 25.5 million euros of 31st December 2024. About CAPEX continue the organic investment program that reached the amount of 5.8 million euro end of March 2025, more than 90% related to expansion, new product capacity and development dedicated to all the divisions. The incidence of organic APEX on net revenue in New York is decreased to 2.7%, was 3.5% in Q1 2024. Overall, the net investments are €6.6 million, considering change in perimeter at €0.8 million referred to the AEF Arturo Foresti acquisition just before mentioning. So, considering the solid Q1 2025 result and considering also the visibility from the backlog we have just seen, the 2025 guidance is confirmed without any change. This is possible considering the strength of the unique San Lorenzo business model and the top-end positioning of the brand. So we have analyzed all the financial results and I leave the floor to Massimo to continue with the business update.

Thank you Antilio. Now briefly some summary of the activity of the last month you can see quickly the super yacht award winner to explorer 500 san lorenzo yacht and then we We show you a picture of the wind labyrinth designed by Pietro Di Soli at the Milano Design Week. That is a contribute from San Lorenzo to Swan, but also to sustainability. We wanted to combine the two points together. It was a success with more than 300 people coming for the party. Well, this is again our message to the market of having reached a fantastic agreement with American Magic. You can see the plant is in construction. We do expect to have the plant finished by the end of the year, beginning of 26, and to be able to start full production by the third or fourth quarter of 26. But what is very important today, we got the message that the next American Cup will be played in Napoli. And this is for sure very good news. You can see what is happening in the tennis in Italy thanks to Mr Sinner, which is a champion. We do expect that Swan business will be boosted and we will investigate with our partners from American magic if there is any chance to have a partnership on the American Cup as well, considering that they will play in Napoli in Italy. Next is, as we said already, we are designing the new office in Newport in combination with Emiston and Bruce Bracknell, which used to sell Perini boats for 30 years in America. That is the style of the first, let's call it, Zwan alloy. It's a maxi of 43 meters. Aside from the big and important collaboration with Enniston, which is one of the best brokerage houses in the world, we'd like to show you a couple of pictures where you can see that we are ready to launch the 128 feet maxi in carbon in Sweden. on the left and on the side you have the picture of the carbon mast, which is 60 meters, which is going to be on top of the boat. I like to show you that because it is a message to the market that, okay, we are starting a new division in the alloy business from 43 to 60, 65 meter. We do expect to have between 50 and 60 million new revenue in the next three years, but we are coming from the biggest swan built in Finland which is very close to the alloy line because the 40 meter in carbon you see is a reality, is a picture of the boat ready to be launched. The boat will be presented at the Monaco show in September 25. Well, very quickly, the methanol situation, in spite of the strategy and policy of the new president of the United States, is growing and growing and growing. There is more and more people who believe in the next and the next future development of methanol. And we remember you that with the 50 steel, we had the first fuel cell boat. Delivered in 2024. And then we are building the second, the 50X space, which will be the first B fuel engine, both methanol and fuel, which will be in the water by the end of 27. So we are continuing. steady pioneering the market from the point of view of sustainability and we will have the second 50 meter on the boat on the water with the first pair of B fuel engine. going on this is just a point which we like very much which is probably the top message we give to the market related to our special business model you see their scarcity which is one of the most important upselling feature for Luxury from 2018 even before our IPO We had 41 boats in construction. Then, little by little, we moved to 37, 55, 61. Then from 21 to 24, we moved from 61 to 69. But the increase of revenue related to San Lorenzo is up to 800 million. So around 70 boats with 800 million revenue. is a key element of the success of our company, both for revenue, for profitability, but mainly to be resilient to the eventual bad cycle. Why? Well, you see on the right our average net revenue. per boat is 11.6 million. That means we are totally out of the market which is more competitive and is related to people who rely on the bonus and salary every year. Our customer comes from a very rich family for two, three generations and they do not need to have a good business here in order to decide to buy the boat. important. You can see the proven growth and margin resilience over the cycle. Little by little after 2018, well first you have a confirmation of the company being resilient because in the bad time between 2008 and 2014 we have been always around 10% in our EBITDA margin. And then from 2018, little by little but constantly growing year after year in our EBITDA margin up to 1 billion revenue expectation. You see the reduction from 19 to 18.8. That is a very, very small reduction considering that 2025 is the first year where we consolidate 12 months of Swan business. And then you know that Swan is diluting a little bit our EBITDA margin now, but we do expect it will grow and improve in the near future. Okay, now I think we can pass the floor to you for any eventual possible question and we are ready to reply. Can you hear me? Yes, now you can.

Okay, thanks for taking my questions. Nicola Storer from Kepler. I have three. The first one is the usual one on the evolution of your business in April, which has been a very erratic month and first days of May when things... appear to have come down a bit. The second question is on the exceptionally low tax rate you had, if you can comment about the tax benefit you mentioned. The third one on your EBDA margin, this time you are not commenting the adjusted EBDA margin. If I look at the adjusted EBDA margin, you are basically on par with last year. I suspect that the missing dilution frost warm is the result of EBDA from refitting activity at Swan which is not in your revenues. Is this true and do you have a big seasonality in this business of Swan refit which is concentrating revenues and profitability in the first quarter? Thank you.

Well, first I have to underline that our numbers are not adjusted. They are fixed. Since two years, we decided not to declare adjusted EBITDA, adjusted EBIT and whatever. It is a fixed number that we expect and then we declare after we finish the quarter and we give you the number. Second, the evolution. I would say that April until middle of May, we are at the middle of the second quarter and I can confirm to you that we already sold two-thirds of the value of 2024. So we do expect the second quarter with a better result in respect of the second quarter of 2024. Then, of course, everything is related to the future declaration of Mr. Trump. And if he is, let's say, following what the world is expecting, considering what has been declared in the last 30 days, we do expect to improve the situation of the H1 in respect of 2024. Regarding the tax rate, I think I will move the reply to the expert in the matter, which is Attilio.

Sure, thank you, Massimo. Yes, Nicolò, about the taxes, your right considers that we have a quite important reduction in terms of incidence. And this is linked to the patent box. We started with this Italian tax benefit last 2024, just the beginning of the impact. And now, especially in this year, we have a very important effect is between 2 and 3 million euros, the impact in Q1 2025. And consider that This benefit is linked to the EBIT generated by the company's know-how. For San Lorenzo, we have a very important heritage starting from 1958 for this important know-how level.

And can you quantify the impact you expect for the fully YARA and if any also beyond 2025 from patent box?

Yeah, in this moment we are in the last phase to define the exact impact with the tax authorities, so we can consider to have an increase for Q2 2025, but we have to have the definitive documents by the authorities.

Regarding the third point, I think even... I can take it, Nicolo. Well, consider, just to give you some statistics, that the refit business of Nautros One, so what is called Nautros One Global Services, accounts for less than 15% of the Nautros One business, which in turn is about 10% at group level. So we're talking about less than 1.5% of the group revenues. So, in terms of marginality accretion, it's substantially relevant.

Grazie.

Hello, can you hear me?

Yes, well.

Thank you. Oriana Cargani, Intesa San Paolo. Thank you for taking my three questions. The first one is a clarification on your reaction to US tariffs. Have you decided to increase prices in North America or considering that this post-trade is low, will not increase prices? My second question is on the order intake in the first quarter. Can you give us an idea on the weight of yacht and super yacht on total order intake and the weight of America? And my third question is about CapEx. Given the uncertainty, macroeconomic uncertainty, are you considering postponing or reducing the scope of some projects? Thank you very much. Thank you.

So I repeat, we are not increasing the price yet because we want to wait the final solution about tariff. Remember, America is not building any boat in competition with San Lorenzo, maybe some boats in competition with Blue Game, but as you know, it's less than 10% of our business. We discussed it with Pietro Berardi, which is the CEO of San Lorenzo of America and some other important broker in America. And we think we will be able to increase our price list up to 10%, maybe something between 10% and 15% in case the tariff will be above that level. So we are pretty sure to be able to discharge to the market at least two-thirds of the eventual risk. The remaining one-third will be split between San Lorenzo, the mother company, and our distributor company, which is owned 100% by us, which is San Lorenzo of America. But if you go to the picture of our market, you can see that for the first quarter of 25, 20% was our share to Americas. Americas means Canada, United States, Central and South America. Out of that, only 8% is related to the US citizenship. Inside of the 8%, 5% is below 30 meters. So the situation anyhow is not really affecting us. Therefore, this is one of the main reasons we confirm the guidance regardless of what will happen. So we feel pretty much strong, you know, related to the risk of tariff. Regarding the capex, and then I leave the matter to the specification of the ordering tax to Attilio. Regarding the capex, as you saw, we are investing a bit less money than expected for the quarter. This is not being a project of reducing the CAPEX yet, but we are not pushing the CAPEX too much, expecting to see what the market is. As always, we are very prudent, so in case a big problem comes to the market, we are ready to reduce, importantly, the CAPEX. If you see on the guidance, on 2020, the year of... COVID, you see that we reduced from an average of 50 million to 30 million pretty quickly. So this is something that we can repeat in case we have any kind of troubles for 2025, which, by the way, we do not expect. Regarding order intakes detail.

In terms of order intakes, consider, Oriana, that for the yacht division, we are in the region of around 70 million euro.

considering the superior division we are in the region of 80 million euro thank you very much and just a follow-up the weight of america in the ordered intake is it possible

Yes, consider that we are consistent with the revenues indicated in the chart just now.

Look, I just like to tell you what happened. We signed a letter of intent during the Miami show, which was the middle of February. And then the customer, which is one of our all-time customers, he bought three San Lorenzo. He ordered the the biggest composite fiberglass boat, the SD-132. And then he called us and said, look, gentlemen, let me have some time to understand what the President of the United States is deciding. He waited until the end of March when Mr. Trump declared the situation of the 25% tariff to Europe and the same day he transferred the deposit to us. I explain that to you because The uncertainty of our customer sometimes is worse than a bad message, which is 25% tariff to Europe. People like certainty and we think that in the next month, sooner or later, Mr. Trump and the American government will stop to play about these numbers and fixed this uncertainty. So our worst period I think is back at the beginning of the quarter, of the first quarter. We do expect week after week to have a more stable market and then to collect more order and to put back the business in normality, in certainty.

We have a question on the same topic pretty much that we see from the chat. So Mr. Filippo Pasini is asking if you can give a broader color on what we expect in the coming months from all the geographies where we are present.

Well, I can tell you there is good news after, I would say, a couple of years where the German and the French market has been pretty light. In the last Palma Boat Show, you know, in Palma there is a lot of Germans and British customers living there with villas and whatever. The Palma Boat Show was pretty... It is... in the middle of april of 23 24 of april just after easter it was quite successful because we found back again a lot of germans a lot of british customers negotiating seriously willing to buy boats. We closed a couple of deals. I think that the new government in Germany is giving a good push to that market and then probably the expectation of lots of money to be spent in the military goods and the declaration of the government to increase spending up to 500 billion in Germany is also showing to the ultra high net worth individual in Germany that they have a good expectation for the 25, 26 and so they go back to buy both. So we do expect Europe to be stronger than last year. Asia-Pacific in the last quarter, we sold the same amount of boat in one quarter that we sold in 2024. So we do expect good numbers and good market in Asia-Pacific. Probably America will be the market that we really don't know the situation because it is not only a matter of tariff. I think that the uncertainty created by the president of the US is now putting the American economy in let's say, waiting situation. You see that the Bank of America is not reducing the interest rate because there is a lot of uncertainty on the situation. So we have to see probably in the next two, three months to have a better and more clear situation. But what is confident for us is Middle East, Far East and Europe. We feel it pretty strong. Pretty good.

We don't have any more questions in the chat. So Mr. Perotti, if you would like to the conclusion.

Well, we thank you very much. We're very happy for the Q1 number. I think that at the end of the year, 2024, you probably remember our expectation for 2025 was quite an important improvement of the business after a 2024 very difficult year. And then, you know, with the with the starting of the new government in America, there was some uncertainty that has been influencing the market, but we are very happy that the numbers at the end for the first quarter was very good, more than what we expected in the middle of January or middle of February. We think that the worst is back, so the future should be little by little better. That is the overall idea of our expectation of the business we are living day after day. Thank you very much for your time and to follow our company always. Bye bye.