Fincantieri: results as at 31 March 2021 approved

RESULTS AS AT MARCH 31, 2021 APPROVED: GUIDANCE CONFIRMED, REVENUES¹ EQUAL TO EUR 1,4 BILLION WITH NET EBITDA IMPROVEMENT AND TOTAL WORKLOAD OF EUR 34,4 BILLION

Consolidated results as at 31 March 2021²

• Confirmed guidance 2021: revenues + 25% -30% (excluding pass-through activities) with EBITDA margin to 7%

• Revenues at March 31, 2021 equal to euro 1.426 million, pass-through activities excluded³, show an increase of 9,1% compared to the first quarter of 2020 (€ 1.307 million at March 31, 2020), in line with the forecasts for the first three months of the year

• EBITDA⁴ equal to euro 101 million (euro 72 million at March 31, 2020), EBITDA margin at 7,0%, up by 27,3% compared to March 31, 2020 (equal to 5,5%), confirms the positive trend already started in Q4 2020

• Charges unrelated to ordinary operations connected to the diffusion of the COVID-19 equal to euro 14 million, mainly attributable to lower production efficiency and costs to ensure the health and safety of personnel

• Net financial debt⁵, equal to euro 1.617 million (euro 1.062 million at 31 December 2020), is in line with expectations and consistent with the trend in volumes developed in the quarter and with the delivery plan (with 7 cruise units in the year, 3 of which in Q3 alone) and will tend to settle, at the end of the year, at values ​​close to 2020

• Overall workload⁶ equal to € 34,4 billion, approximately 6,6 times the revenues of 2020⁷ with orders acquired in the quarter for € 0,3 billion: backlog at March 31, 2021 it was € 26,5 billion (€ 27,7 billion at March 31, 2020) with 98 ships in the portfolio and the soft backlog approximately € 7,9 billion (approximately € 4,2 billion at March 31, 2020)

• Deliver the military unit LSS Vulcano, as part of the fleet renewal program of the Italian Navy, , expedition cruise vessel Coral Geographer, the second small luxury unit for the Australian company Coral Expeditions

Key messages

• Recognized pivotal role nationally and internationally in core sectors and new markets

• Continuing Innovation: advancement in the development of know-how and innovative technologies

• Competitive advantage achieved to seize further opportunities in the military market and in that of renewable energy and special ships

Highlights

• Cruise - delivery schedule respected

- Viking Venus, the first of the five cruise ships to be delivered by the Italian shipyards, was delivered on April 15 in Ancona to the Viking shipping company

• Naval - further consolidation and international cooperation

- Start activities for SEA Defense: project supported by EU Member States and aimed at developing technologies to be included in the next generation of naval platforms

- European Patrol Corvette (EPC): signed by the JV Naviris and Navantia a MoU for industrial cooperation aimed at the development of the EPC within the European PESCO program⁸

• Offshore - VARD strengthens its positioning in the special vessel segment

- Order to design submarine cable repair unit for industry leader Orange Marine

- Order for 3 SOV units (service operation vessel) for the maintenance of the largest marine wind farm in the world (Dogger Bank - UK) commissioned by North Star Renewables

• Technological pole

- Cloud computing⁹: Fincantieri e Amazon Web Services have signed a cooperation agreement to contribute to the acceleration of digital innovation and technological development in the country, with the provision of technological and infrastructural solutions for institutions, large companies, SMEs and start-ups through the cloud computing. The project is part of Mission 1 of the Recovery Plan

- Connected vehicles and smart roads: signed agreement with Almaviva, leader in digital innovation, for the support and acceleration of the digitalization process of the transport and logistics sector with particular attention to the effects on environmental impacts and safety. The agreement is inherent to Mission 2 of the Recovery Plan

• Sustainability - Circular and low-carbon economy: creation of long-term value thanks to the Group's integrated strategy and the development of eco-sustainable products and services. Fincantieri signs an LOI with Enel for the construction and management of new generation port infrastructures with low environmental impact and for the electrification of onshore logistics activities. The project is relevant to Mission 3 of the Recovery Plan

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Rome, 13 May 2021 - The Board of Directors of FINCANTIERI SpA ( "Fincantieri"Or the"Society"), Which met under the chairmanship of Giampiero Massolo, examined and approved the interim financial information as of March 31, 2021¹⁰.

In the margins of the Council meeting Giuseppe Bono, CEO of Fincantieri, commented: “The first quarter results photograph a company in full health which, as expected, confirms the guidance, records growth in revenues and an increase in margins. Alongside these positive signs, which go hand in hand with the slight improvement in the overall economic situation, also by virtue of the progress made in the pandemic emergency, we welcome the cautious restart of cruises in Europe, which will soon be followed by the US market. This is made possible thanks to the strict health protocols adopted by the shipping companies that make their ships totally safe and to the technology that we have identified in the meantime to sanitize the air and reduce the possibility of infections. It is important to report the data on reservations for 2022, which records levels in line or better than those pre-Covid. "

Bono then concluded: "I would like to remind you that at the center of our action there is also the great work that, in the service of the Government, we are carrying out together with other large national and foreign groups, fully convinced that the collaboration between our best productive forces for grounding of the projects presented as part of the Recovery Plan will lead to the rebirth of the country ".

ECONOMIC DATA

I Revenues and income in the first quarter of 2021, equal to euro 1.426 million, excluding pass-through assets (euro 222 million), an increase of 9,1% compared to the same period of 2020. The volumes developed during the first three months of 2021 exceed those of the first quarter of the previous year, largely recovering the share lost due to the suspension of the activities of the Group's Italian yards and plants following the outbreak of the COVID-19 pandemic. The results achieved are fully in line with forecasts and confirm the direction taken towards the objectives defined for 2021, with an expected strong increase in revenues in the remainder of the year due to the acceleration necessary for the development of the huge workload and on the delivery floor.

The higher revenues and volumes are attributable to the return to full capacity of the activities in all the Group's construction sites and plants. The increase, compared to the first quarter of 2020, reflects the positive performance of the Shipbuilding (+ 12,8% excluding pass-through activities) and Systems, Components and Services (+ 13,4%) segments and the decline in revenues recorded by the Offshore segment and Special ships in the first quarter (-23,5%).

THEEBITDA of the Group at March 31, 2021, amounting to euro 101 million (euro 72 million at March 31, 2020), recovers well beyond the margins lost in the first quarter of 2020 due to the non-completion of ship orders in the closing period (euro 15 million). L'EBITDA margin, excluding pass-through assets, stood at 7,0% (5,5% at March 31, 2020). The improvement in margins validates the performance of the fourth quarter of 2020 (6,9%) and is in line with the guidance provided for 2021.

ship building

I revenues from the Shipbuilding sector at March 31, 2021, excluding pass-through assets for euro 222 million, they amount to euro 1.278 million, an increase of 12,8% compared to the same period of 2020. The cruise ships business area shows an increase of 11,6, 16,2% while the business area of ​​military ships shows an increase of 58%, excluding pass-through activities. The incidence on the Group's revenues, respectively equal to 22% and 31%, is substantially in line with the final figures as at 2020 March XNUMX.

The revenue trend of the cruise ships confirms the trend already highlighted in the fourth quarter of 2020 and is an expression of the return to full capacity of the activities in all the Group's sites. For 2021, the production program in Italy foresees the delivery of 5 units of which one unit, Viking Venus, delivered on 15 April, three units to be delivered in the third quarter and one unit at the end of 2021. The revenue trend of the However, the business unit was affected by the lower volumes developed in the period, compared to March 31, 2020, by Vard Cruise with two luxury-niche units to be delivered in 2021 compared to the three delivered in 2020.

The increase in the production value of the business area of military ships, excluding the pass-through activities relating to the FREMM unit delivered in April, reflects the progress of the program for the renewal of the Italian Navy fleet, whose first unit, the “Vulcano” ship, was delivered in March. The increase in revenues is also to be referred to the progress of construction relating to the orders for the Ministry of Defense of Qatar, whose first delivery is scheduled for the second half, and of the activities for the other orders acquired by the Parent Company (two submarine units U212NFS for the Italian Navy and four bow sections as part of the “Flotte Logistique” program for the French Navy). The revenues of the business area also record the contribution of the US subsidiary FMG, which continues to develop the LCS program and the Foreign Military Sales between the United States and Saudi Arabia. The subsidiary, prime contractor in the FFG-62 program (ex FFG (X) program) for the US Navy, initiated the design work of the class leader unit.

THEEBITDA of the sector as at 31 March 2021, equal to euro 100 million, an increase compared to the first quarter of 2020 (euro 72 million), confirms the growth strategy and development guidelines outlined by the Group prior to the spread of the pandemic.

THEEBITDA margin, at 7,8% excluding pass-through activities (6,7% if total revenues are considered), is up compared to 6,3% as of March 31, 2020 and demonstrates the Group's ability to return to the levels of margins envisaged by 'current backlog.

Offshore and special ships

The revenues of the sector Offshore and special ships at March 31, 2021, equal to euro 96 million, a decrease of 23,5% compared to the corresponding period of 2020. This trend reflects, on the one hand, the decrease in volumes following the reduction in production capacity with the closure of the construction site Brevik, still active in the first quarter of 2020, and, on the other hand, the redefinition of the product range and the order portfolio in the face of repositioning in more promising sectors such as offshore wind. The effects of this strategy still find little evidence in the results achieved in the period. During 2020 and in the first months of this year, the subsidiary Vard managed to position itself as a reference player in the renewable energy sector and in that of high-tech special vessels. This positioning is also confirmed by the order for three SOVs (service operation vessel), intended for the maintenance of the largest marine wind farm in the world, Dogger Bank, located off the east coast of England, in the North Sea.

THEEBITDA of the sector as at 31 March 2021 is positive for euro 2 million (negative for euro 1 million as at 31 March 2020), with a EBITDA margin at 1,6% (-0,8% at March 31, 2020). EBITDA in the first quarter of 2021 benefits from the effects of the restructuring and reorganization strategy launched in 2019 and reflects the first signs of repositioning in sectors with broader market prospects.

Systems, Components and Services

The revenues of the sector Systems, Components and Services amounted to euro 232 million, an increase of 13,4% compared to the first quarter of 2020. This growth is mainly attributable to the Complete accommodation business area, driven by volumes cruise generated in the period. The business areas of the sector are also engaged in starting the development of the backlog and in strengthening their positioning in the reference markets.

THEEBITDA of the sector at March 31, 2021, amounted to euro 10 million (euro 12 million at March 31, 2020) with a EBITDA margin which stands at 4,5% (6,0% at March 31, 2020). The marginality of the first quarter reflects the different mix of products and services offered in the period, however affected by a decline in the period, mainly attributable to the lower margins of the Ship Repair and Conversion business area.

BALANCE SHEET DATA

^(*) This value does not include construction loans and includes non-current financial receivables (equal to euro 99 million)

Il Net fixed capital is equal to euro 2.091 million (euro 2.035 million at December 31, 2020), an increase of euro 56 million. The Net working capital it is positive for euro 328 million (negative for euro 202 million at December 31, 2020). The main change concerned the increase in work in progress on orders and advances from customers (euro 812 million) referable, in particular, to the progress in the period of the orders relating to cruise ships which count 7 deliveries expected in 2021, of which one that already took place in April.

I Construction loans, credit instruments used exclusively to finance the contracts to which they refer, amounted to a total of € 31 million at 2021 March 1.506, with an increase of € 181 million compared to 31 December 2020, and relate to the Parent Company for € 1.100 million and to the subsidiary VARD for euro 406 million.

La Consolidated net financial position¹¹ presents a negative balance (debit) of euro 1.617 million (debit balance of euro 1.062 million at December 31, 2020). The increase, in line with forecasts, is consistent with the development of the production volumes developed and with the delivery plan which envisages 7 cruise units in the remainder of the year (the first of which delivered in April 2021 and three planned in the third quarter). It should also be noted that the Net Financial Position is affected by the strategy adopted to grant commercial extensions to its customers, in order to safeguard the large workload acquired and to strengthen relations with the shipping companies.

OTHER INDICATORS

DELIVERIES

^(*) For the purposes of representing the operating segments of the Fincantieri Group, the VARD shipyards have been divided into Cruise or Offshore. For this reason, the cruise unit, Coral Geographer built in an offshore shipyard for the Australian company Coral Expeditions, was included in the Offshore and Special Ships deliveries.

BUSINESS OUTLOOK

In anticipation of the completion of the vaccination campaign in progress, by virtue of the safety protocols implemented in all the Group's construction sites and plants and in the absence of negative developments deriving from the pandemic with relapses that are currently not foreseeable, Fincantieri expects to maintain full production regime , already achieved in the second half of 2020, which will make it possible to reach pre-pandemic growth levels again.

Regarding the cruise sector, although in the United States the Centers for Disease Control and Prevention has indicated mid-July as a potential recovery period, some of the shipping companies, with routes in seas not subject to US directives, have already resumed or are in about to resume navigation: an example is Costa Smeralda, by Costa Cruises, active in the Mediterranean since May XNUMXst.

Despite the crisis triggered by the spread of the COVID-19 virus, the Group resumes its development path thanks to a significant and diversified order book that Fincantieri has been able to preserve (in particular in the business area cruise) also through the support strategy for shipowners.

The performance of the first quarter of 2021 allows us to reaffirm the guidance for the year 2021 with revenues up by 25% -30%, compared to those recorded in the year 2020 (pass-through activities excluded), and margin values ​​close to 7%.

The Net Financial Position is expected to increase in the first half of 2021, due to the financial dynamics typical of the construction of cruise ships and as a function of the remodeled delivery plan which includes 7 cruise units, 4 of which are scheduled for the second half of the year. . Consistent with the delivery schedule, the net financial position will tend to settle at the end of 2021 at a value in line with 2020, also fully covering the important investment plan scheduled for the year.

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The manager in charge of preparing the accounting and corporate documents Felice Bonavolontà declares pursuant to paragraph 2 of article 154 bis of legislative decree no. 24 that the information contained in this press release corresponds to the documentary results, books and accounting records.

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For significant events that occurred during the period and after 31 March 2020, please refer to the press releases available on the Company's website (www.fincantieri.com).

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This press release is available to the public at the registered office, as well as on the Company's website (www.fincantieri.com) in the “Investor Relations - Financial Statements and Reports” section and on the authorized storage mechanism called eMarket STORAGE www.emarketstorage.com.

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DISCLAIMER

The forward-looking data and information must be considered "forward-looking statements" and therefore, not based on mere historical facts, have for them nature a component of risk and uncertainty, since they also depend on the occurrence of future events and developments beyond the control of the Company, the final data may therefore vary substantially with respect to forecasts. The forecast data and information refer to the information available on the date of their disclosure; in this regard FINCANTIERI SpA reserves the right to communicate any changes to the information and forecast data within the terms and in the manner provided for by current legislation.

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The results for the first three months of 2021 will be illustrated to the financial community during a conference call to be held on Friday 14 May 2021, at 9:00 CET.

To attend the conference you will need connect in the following ways:

Access to the audio webcast service through the following link.

Diamond Pass: access with pre-registration and personal PIN to the following link.

Telephone connection via operator:

Italy +39 028020911

United Kingdom +44 1212818004

United States +1 7187058796

Hong Kong +852 58080984 then dial * 0

The presentation slides will be made available on the web page www.fincantieri.com, Investor Relations section, 10 minutes before the start of the conference.

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Fincantieri is one of the main shipbuilding complexes in the world, the only one active in all sectors of high-tech naval engineering. It is a leader in the construction and transformation of cruise, military and offshore units in the oil & gas and wind power sectors, as well as in the production of systems and components, in the offer of after-sales services and in ship furnishing solutions. Thanks to the skills developed in the management of complex projects, the Group boasts references of excellence in infrastructures, and is a reference operator in digital and in cybersecurity, in electronics and advanced systems.

With over 230 years of history and more than 7.000 ships built, Fincantieri maintains its know-how and management centers in Italy, where it employs 10.000 employees and activates around 90.000 jobs, which double on a global scale thanks to a production network of 18 factories on four continents and over 20.000 direct workers.

www.fincantieri.com

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ALTERNATIVE PERFORMANCE INDICATORS

The management of Fincantieri assesses the performance of the Group and of the business segments also on the basis of some indicators not envisaged by the IFRS. In particular, the EBITDA, in the configuration monitored by the Group, is used as the main profitability indicator, as it allows to analyze the Group's margins, eliminating the effects deriving from the volatility originating from non-recurring economic elements or extraneous to ordinary operations; the EBITDA configuration adopted by the Group may not be homogeneous with that adopted by other companies.

Described below, as required by Consob Communication no. 0092543 of 3 December 2015 which transposes the ESMA / 2015/1415 guidelines on the subject of alternative performance indicators, the components of each of these indicators:

• EBITDA: is equal to the pre-tax result, before financial income and charges, before income and charges on equity investments and depreciation and write-downs, adjusted by the following elements:

• provisions for legal costs and expenses associated with disputes with personnel for asbestos damage;

• charges related to the impacts deriving from the spread of the COVID-19 virus;

• expenses connected with reorganization plans and other non-recurring personnel costs;

• other charges or income unrelated to ordinary operations.

• EBIT: is equal to EBITDA net of amortization and write-downs of a recurring nature (the write-downs of goodwill and intangible assets and of Property, plant and machinery recognized following impairment tests are excluded).

• Net fixed capital: it is equal to the fixed capital used for company operations which includes the items: Intangible assets, Rights of use, Property, plant and equipment, Equity investments and Other non-current assets and liabilities (including the fair value of the derivatives included under the items Non-current financial assets and Non-current financial liabilities) net of the employee benefit provision.

• Net working capital: it is equal to the capital employed for typical business operations which includes the items Inventories and advances, Contract work in progress and advances from customers, Construction loans, Trade receivables, Trade payables, Provisions for risks and charges sundry, Other current assets and liabilities (including Direct tax credits, Direct tax payables, Deferred tax assets, Deferred tax liabilities in addition to the fair value of the derivatives included in the items Current financial assets and Current financial liabilities).

• Net financial position monitored by the Group includes:

• Net current financial debt: cash and cash equivalents, securities held for trading, current financial receivables, current bank payables (excluding Construction loans), current portion of medium / long-term loans, other current financial payables;

• Net non-current financial debt: non-current financial receivables, non-current bank payables, bonds issued, other non-current financial payables.

• Revenues and income excluding pass-through activities: they exclude the portion of revenues relating to sales contracts with pass-through activities and which are mirrored in the cost item; pass-through assets are those contracts for which the Group invoices the entire contractual amount to the end customer but does not directly manage the construction order.

• Provisions: these refer to provisions to provisions for risks and charges and write-downs of trade receivables and other non-current and current assets.

For a further description of the alternative performance indicators, please refer to the specific Note contained in the Report on operations in the 2020 Consolidated Financial Statements of the Fincantieri Group.

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FINANCE