Fincantieri, all the plans and the debt knot
Fincantieri expects to return to profit from 2025 when it will record revenues of 8.8 billion. Here's how the group avoids the hypothesis of a capital increase in the 2023-27 business plan
Fincantieri aims to return to profit in 2025.
Yesterday the board of directors of the Trieste shipbuilding group, chaired by General Claudio Graziano, approved the new industrial plan '23-'27 and illustrated by the new CEO Pierroberto Folgiero.
The naval group controlled by CDP aims to focus on the construction of ships with high added value, digitizing production processes with attention to costs and "financial discipline".
Furthermore, Fincantieri will enhance the synergies between the cruise, defense and specialized offshore vessels sectors, in the wake of the energy transition and technological innovation.
In a note , the group indicates that at the end of the plan, in 2027, it will record revenues of 9.8 billion with an EBITDA margin of 8%. Debt will fall from a ratio of net financial position to EBITDA of 4.5-5.5 in 2025 to one of 2.5-3.5 in 2027.
In this way, number one Folgiero argues that there will be no need for a capital increase for Fincantieri, a hypothesis that has come back into vogue in recent months given the group's debt (3.03 billion).
All the details.
THE FINCANTIERI ROUTE
The Business Plan – communicates Fincantieri – expresses the Group's ambition to become a world leader in the construction and lifetime management of digital and green ships, for the cruise tourism, defense and energy sectors. Building on its industrial excellence, it also aims to strengthen the international competitive positioning of the Group and of the Italian shipbuilding industry, also creating value for the supply chain. With this in mind, the synergies between the cruise, defense and specialized offshore vessels sectors will be further strengthened, in the wake of the energy transition and technological innovation.
Furthermore, the plan provides for the focus on the high value-added shipbuilding business, further strengthening of the Italian and foreign shipyards and concentration on costs and financial discipline.
FOLGIERO: TOWARDS INCREASINGLY AUTOMATED AND DIGITALIZED SHIPS
“Distinctiveness and sustainability are qualifying points of our plan, they will allow us to continue to grow, turning the critical issues of the sector and the macroeconomic context into opportunities” declared the CEO Pierroberto Folgiero. “The guidelines of the 2023-2027 plan are based on five pillars aimed at making Fincantieri evolve into a world leader in enabling the energy transition for large ships and in the construction and management of increasingly automated and digitized ships. This evolution is possible thanks to the focus on our three core businesses – cruise ships, naval vessels and specialized offshore vessels – with reference to which we are ready to be pioneers in enabling new technologies. The plan includes continued efforts on the modernization and digitization of shipyard operations towards excellence, and the utmost attention to financial discipline and deleveraging” concluded Folgiero.
THE ECONOMIC OBJECTIVES
According to the group, Fincantieri will return to profit in 2025, the year in which revenues of 8.8 billion euros are expected (estimated at 9.8 billion in 2027). Over the three-year period, the company expects the EBITDA margin to go from 7% to 8%.
The new guidelines of the new 2023-2027 strategic plan also aim for a net financial position/EBITDA ratio of 4.5-5.5 times and 2.5-3.5 times, respectively.
IMPROVED DEBT
Looking at the results of the first 9 months of the year of Fincantieri, the net financial position is in debt of 3.03 billion (up compared to 2.2 billion as at 31 December 2021), however an improvement compared to 30 June 2022 (debt for 3.2 billion at 30 June), consistent with production volumes, investments and the delivery plan.
NO CAPITAL INCREASE
Therefore for Folgiero, Fincantieri will not "need" a capital increase, given the deleveraging objectives incorporated in the business plan.
As Bloomberg writes, the Trieste-based shipbuilding group wants to drastically reduce its debt-to-profit ratio in the new business plan through 2027, as the state-controlled shipbuilder tries to avoid seeking new funds from investors, according to CEO Folgiero .
Therefore, the hypothesis of recapitalization for Fincantieri is excluded, which has been rumored for months after Pierroberto Folgiero was appointed new managing director of the group, succeeding Giuseppe Bono after twenty years, CEO since 2002. In recent years, "the CEO Bono has repeatedly excluding that Fincantieri needed a capital increase unless it carried out large mergers and acquisitions” Banca Akros recalled in the spring. In the long run, the appointment of a new leader "may mean that the strategy will change".
Precisely for this reason, the bank's analysts did not exclude that Folgiero could carry out "an in-depth review of the business with possible implications in terms of write-downs and, in the worst case, a capital increase as he did when he took over 8 years ago by Maire Tecnimont”.
But, with the new industrial plan, the number one of Fincantieri has averted the capital increase for the naval group.
This is a machine translation from Italian language of a post published on Start Magazine at the URL https://www.startmag.it/smartcity/fincantieri-tutti-i-piani-e-il-nodo-del-debito/ on Fri, 16 Dec 2022 11:16:49 +0000.