How the accounts of Fincantieri are going

How the accounts of Fincantieri are going

All the details and scenarios of Fincantieri in the light of the half-yearly accounts

The lockdown period (from 13 March to 20 April) and the progressive recovery on the half-year accounts of Fincantieri, whose production returned to 'grind' only at the end of June, with 90% of the workforce at full speed, weighed heavily.

Yesterday, the board of directors of Fincantieri approved a half-year at June 30 marked by a negative result for 137 million euros (12 at 30 June 2019) net of the costs connected with the diffusion of COVID-19 for 114 million and disputes for damages asbestos for 23 million.

It is a contingency: no cancellation and record workload (38 billion), underlines the group led by the CEO, Giuseppe Bono.

As regards the cruise sector – reads the note by Fincantieri – "while in the United States the CDC (Center for Disease Control and Prevention) has extended the" no-sail order "until 30 September 2020, the shipping companies with routes in seas not subject to U.S. directives they have already resumed or are in the process of resuming them. Among these, Ponant, through the Paul Gauguin brand, resumed operations on July 15 in the seas of French Polynesia and Tahiti; likewise, the Carnival Group Aida brand has announced that activities will resume in Germany starting from August ”.

HERE IS THE INTEGRAL PRESS RELEASE YESTERDAY ISSUED BY FINCANTIERI

COVID-19 update

  • No cancellation of orders
  • Postponement of the production program with consequent drop in revenues, following the stoppage of activities
  • The delivery of three cruise ships during the second part of the year 2020 from Italian shipyards is expected
  • Gradual restart of production activities from 20 April 2020 with the simultaneous implementation of all the measures necessary to protect the health and safety of its employees and those related
  • As of June 30, the presence of production personnel on construction sites has reached about 90% of the workforce when fully operational

Consolidated results for the first half of 2020

  • Revenues at June 30, 2020 of € 2,369 million (€ 2,808 million at June 30, 2019), down 15.6%, reflecting the loss in value of production in the half-year of approximately € 790 million
  • EBITDA of euro 119 million (euro 227 million at June 30, 2019) with an EBITDA margin of 5.0% (8.1% at June 30, 2019). EBITDA was affected by the non-contribution of approximately € 65 million due to the production stoppage
  • Adjusted negative profit for the period of 29 million euros (47 million euros at 30 June 2019)
  • Result for the negative period for euro 137 million (euro 12 million at June 30, 2019) net of charges connected to the spread of COVID-19 for euro 114 million and litigation for asbestos damages for euro 23 million
  • Net financial debt of 980 million euros (736 million euros at 31 December 2019): reflects the typical dynamics of working capital relating to the construction of cruise ships accentuated by the COVID-19 effects with the postponement of the delivery of a cruise unit envisaged in the first half year and part of the commercial collections expected in the period
  • Total workload for 117 ships equal to € 37.9 billion (€ 32.7 billion at 31 December 2019), approximately 6.5 times the 2019 revenues: backlog of € 28 billion with 92 units in delivery until 2027 and soft backlog of € 9.9 billion
  • Delivered 10 ships from 7 different plants, including 3 cruise ships, 1 fishery unit and 1 military ship
  • Continuation of the diversification strategy with the development, through the various divisions and Group companies, of the electronics infrastructure and cyber security businesses, of the complete accommodation for the cruise ship sector, and of the systems, components and after-sales services (which only recorded a 5.7% increase in revenues in the last half year) and in the commercial sector through the award of orders for the offshore renewable energy sector (an SOV unit for the maintenance of marine wind farms), for the fishery sector (two innovative units) and for the infrastructure sector (reconstruction of the Port of Rapallo) and the signing of a partnership agreement for the design and reconstruction of the "Renato Dall'Ara" stadium (Bologna)

Other relevant events

  • Fincantieri Marinette Marine prime contractor in the "FFG (X)" program: contract of almost USD 800 million won for the design and construction of the class leader unit of the new missile frigate launchers for the US Navy. If exercised, options for an additional 9 units will bring the contract value to USD 5.5 billion
  • The load-bearing structure of the new Genoa bridge was completed in record time: the launch of the 19 spans at the end of April 2020 was completed
  • JV Naviris: signed the first 'Research and Technology' contract with OCCAR for five research projects
  • Commitment to sustainability renewed with the update of the 2018 – 2022 Sustainability Plan and the Group's dedication in the related area recognized:
  • The agreement with Eni for initiatives in the area of ​​decarbonisation and circular economy has been extended
  • Obtained B rating from CDP for its commitment to fight climate change. Positioning in the highest range of the Vigeo Eiris ranking, in first place among its reference peers

The Board of Directors of Fincantieri SpA ("Fincantieri" or the "Company"), meeting under the chairmanship of Giampiero Massolo , examined and approved the Half-yearly financial report at June 30, 2020, prepared in accordance with international accounting standards (IFRS).

The Board of Directors also approved the appointment of Dr. Fabio Gallia as General Manager of the Company, formulating him a wish for good work. The Board expressed the belief that Doctor Gallia will be able to contribute with his commitment and professionalism to the achievement of increasingly challenging and ambitious goals for the Group.

The Board then sent a warm thank you to engineer Alberto Maestrini for the professionalism, commitment and self-sacrifice with which he has held the position of General Manager since 2016, also expressing his best wishes for the prestigious professional challenges to come that he will face within the Group.

On the sidelines of the Board meeting, Giuseppe Bono, CEO of Fincantieri, commented: “We have faced this period in many ways dramatic with the utmost determination so that the company, once spent, would have the possibility of being stronger than before . This approach has proven successful and has allowed us not only to avoid the cancellation of orders, but also to win important tenders. And so the workload has reached a new record.

Today, in addition to having world leadership in the construction of cruise ships, we can also boast that for surface military ships. We faced the emergency of Coronavirus thinking that we had to preserve our resources and those of the related industries, fundamental assets of Fincantieri and the country. We succeeded in adopting a series of measures that obtained 91% of the satisfaction of our employees, as evidenced by the results of a survey carried out throughout the company. It is important to underline that today there are about 30,000 people inside our factories.

Obviously the economic and financial results are influenced by the production slowdown due to the Coronavirus. However, the workload allows us to look to the future with confidence, confirming a continuity of work for the next 6/7 years with consequent financial and economic performance in line with the targets of the previous Business Plan.

With regard to the other decisions resolved by the Board of Directors, I would like to offer particular thanks to Eng. Alberto Maestrini for the great dedication and professionalism with which he has held the position of General Manager over the past four years and the absolute loyalty to the company where he will continue to hold important and delicate positions. My personal welcome goes to Dr Fabio Gallia, appointed by the Board as new General Manager, along with that of the whole company. His prestigious positions as Chief Executive Officer in leading Italian companies and the participation on the Boards of numerous industrial companies express the figure of his caliber ".

Economic and financial results in the first half of 2020

The first half of 2020 closed with revenues of € 2,369 million (€ 2,808 million at 30 June 2019), down 15.6% compared to the first half of 2019 as a consequence of the suspension of the activities of the Group's Italian yards and plants quantifiable as about € 790 million of lost revenues due to the postponement of production programs.

Revenues and income at 30 June 2020 amounted to € 2,369 million, with changes compared to the same period of the previous year shown in the following table.

Revenues and income decreased by euro 439 million compared to the same period of the previous year (-15.6%). This effect, as explained above, is attributable to the postponement of production programs caused by the stoppage of activities and the slowdowns following the recovery in production of the Group's Italian shipyards and plants, resulting in a failure to recognize revenues in the half-year for approximately € 790 million. The drop in revenues is also attributable to the net negative impact (euro 39 million) of the conversion into Euro of the revenues denominated in Norwegian Kroner and United States Dollars generated by foreign subsidiaries.

The Shipbuilding sector recorded an overall decrease of 17.5% with the revenues from cruise ships which marked a decrease of 13.1% and the revenues from military ships decreased by 27.3%. At 30 June 2020, the revenues of the cruise ships business area contributed 57% of the Group's revenues (56% at 30 June 2019), while the incidence of the revenues of the military ships business area stood at 20% (24% as of 30 June 2019). The Systems, Components and Services sector saw its volumes grow by about 5.7% despite the stoppage of production activities in Italy, while the revenues of the Offshore and Special Ships sector were substantially in line with those of the same period of the year previous (-2.6%).

The period ended June 30, 2020 records an incidence of revenues generated by the Group with foreign customers equal to 84% compared to 81% in the corresponding period of 2019.

EBITDA at 30 June 2020 was equal to euro 119 million (euro 227 million in the first half of 2019) with an incidence on Revenues and income (EBITDA margin) of 5.0%, down compared to 8.1% of the June 30, 2019. EBITDA suffers the reduction in production volumes and the loss of productivity caused by the closure and consequent gradual reopening of the group's Italian sites. Likewise, the half-year EBITDA was affected by a non-contribution of approximately € 65 million following the postponement of naval orders in the closing period. The reduction in EBITDA is attributable to the Shipbuilding sector due to the suspension of production activities in Italy and to the lower contribution of the Systems, Components and Services sector due to the different mix of products and services sold in the period. VARD ended the half year with a substantially balanced EBITDA, showing the first positive effects of the restructuring plan started in 2019, which also resulted in the revision of the estimate of the costs to be completed of the orders in the portfolio and the reduction of production capacity in Norway.

The EBIT achieved in the first six months of 2020 is equal to euro 54 million compared to euro 150 million in the same period of the previous year, with an EBIT margin (percentage incidence on Revenues and income) equal to 2.3% (5 , 3% in the first half of 2019). The decrease in EBIT is attributable to the reasons already illustrated with reference to the Group's EBITDA. There is a lower incidence of depreciation compared to the previous half year following the reclassification to charges unrelated to the ordinary management of the depreciation and amortization relating to the period of production downtime induced by COVID-19.

The Result for the adjusted period is negative for euro 29 million at June 30, 2020 (positive for euro 47 million at June 30, 2019). Financial and investment charges and income have a negative value of euro 66 million (negative for euro 63 million at 30 June 2019). The increase is mainly attributable to higher unrealized charges deriving from the conversion of the loan granted to Vard Promar into US dollars.

Non-recurring non-recurring income and expenses are negative for euro 139 million (euro 27 million at June 30, 2019) and include the costs associated with the impacts deriving from the spread of the COVID-19 virus for euro 114 million, the costs relating to disputes for asbestos damages for euro 23 million and other charges related to non-recurring activities for euro 2 million. COVID-19 costs mainly relate to the failure to absorb fixed production costs for the period of production stoppage (approximately € 65 million, of which € 17 million of depreciation), costs for healthcare and expenses to guarantee health and personnel safety.

The result for the period, as a result of the above, stood at a negative value of euro 137 million (positive for euro 12 million at June 30, 2019). The result attributable to the Group is negative for euro 135 million, compared to a profit of euro 16 million in the same period of the previous year.

Net invested capital at 30 June 2020 amounted to euro 1,867 million, an increase compared to euro 1,786 million at December 31, 2019. Specifically, net fixed assets, equal to euro 1,887 million (euro 1,905 million at December 31, 2019) overall a decrease of euro 18 million. The changes include i) the decrease in the value of intangible assets and property, plant and machinery for euro 26 million, where investments in the half year (euro 122 million) were more than offset by amortization for the period (euro 73 million) , the negative effect of the translation of the financial statements in foreign currency (euro 56 million) and the reduction in fixed assets (euro 19 million) and ii) the increase in the item Equity investments (euro 30 million) due to the subscription, by VARD, of a stake in the capital of a shipping company operating in the Offshore sector, in addition to the transfer in the same of a ship previously registered under fixed assets.

Net working capital was negative for euro 26 million (negative for euro 125 million at December 31, 2019). The main changes concerned i) the reduction in work in progress on orders and advances from customers (euro 434 million) due to the deliveries of cruise ships during the half year and the reduction in production activities at Italian sites; ii) the increase in trade receivables (€ 406 million) for the billing of the final installment of a cruise unit delivered in the second half of 2020; iii) the reduction in trade payables (euro 288 million) mainly as a consequence of the lower volumes developed in the half year.

The consolidated net financial position, which does not include construction loans, shows a negative balance (payable) for euro 980 million (payable for euro 736 million at December 31, 2019). The increase in the consolidated net financial position is mainly due to the typical dynamics of the working capital relating to the construction of cruise ships, accentuated by the postponement of the delivery date of a cruise unit expected in the half year and part of the commercial collections expected in the period. The increase in financial requirements was only partially mitigated by the reduction in production volumes deriving from the temporary closure of the Group's Italian shipyards.

Construction loans at June 30, 2020 totaled € 1,001 million, with an increase of € 190 million compared to December 31, 2019, and relate to the Parent Company for € 800 million and to the subsidiary VARD for € 201 million. Please note that, in consideration of the operational characteristics of construction loans and, in particular, of the fact that these credit instruments are obtained and can be used exclusively to finance the orders to which they refer, they are considered by management as advances received by customers and are therefore classified within the Net Working Capital.

In the first half of 2020 the ROI and ROE income indicators are respectively 3.7% and -27.9%. The changes in ROI and ROE are mainly attributable to operating results, EBIT and Net result, which compared on an annual basis, saw a second half of 2019 impacted by Vard's restructuring plan and a first half of 2020 which discounts the effects of COVID -19.

The solidity and efficiency indicators of the capital structure reflect the increase in the Group's total financial debt and net financial position, accompanied by the reduced profitability of the period and by the impact on the shareholders' equity of the half-year results; also in this case the impacts are mainly attributable to the effects of COVID-19.

Group operating results and performance indicators for the first six months of 2020

Orders and Workload (backlog)

In the first six months of 2020, the Group recorded new orders for € 1,723 million compared to € 6,627 million in the corresponding period of 2019, with a book-to-bill ratio (new orders / revenues) of 0.7 (2, 3 to 30 June 2019). It should be remembered that in the first half of 2019 the Group had recorded a record level of orders acquired. Of the total orders, gross of the consolidations between the various sectors, the Shipbuilding sector weighs 79% (96% in the first half of 2019), the Offshore sector and Special ships for 10% (1% in the first half of 2019) and the Systems, Components and Services sector for 19% (5% in the first half of 2019).

As regards the Shipbuilding sector, for the first six months of 2020, the order for the shipowner Norwegian Cruise Line is noted which, in addition to the extension, provides for further changes agreed on 4 cruise units already in the portfolio.

With reference to the military ships business area, the Group was awarded the contract for the detailed design and construction of the class leader unit of the new missile frigates for the United States Navy under the FFG (X) program. The Group, through the American subsidiary Fincantieri Marinette Marine, prevailed over the main shipbuilding groups in the world, for the detailed design and construction of the program's head unit. The contract also includes options for the design and construction of the next 9 units. The award represents an important evolution of the strategic profile of American operations: for the first time, in fact, Fincantieri Marinette Marine will play the role of prime contractor in a contract for the US Navy.

Again in the military, it should be noted that Naviris, a 50/50 joint venture of Fincantieri and Naval Group, has signed the first R&T contract for a program with the European Organization for Armaments Cooperation with OCCAR. of 5 research projects, which will form the basis of long-term cooperation between Fincantieri and Naval Group. Naviris, prime contractor, will coordinate the technical activities entrusted to the two companies and will have the intellectual property of all the results of the research developed.

In the Offshore and Special Ships sector, VARD has signed the first order for the design and construction of a Service Operation Vessel (SOV), specifically intended for the maintenance of the Greater Changhua marine wind farms, managed by the Danish electricity company Ørsted. This order, which marks the entry of the Norwegian subsidiary into the promising offshore renewable energy sector, confirms the diversification strategy defined by the Parent Company. In addition, it should be noted that the subsidiary signed contracts for 2 fishery units in the half year.

Finally, in the Systems Components and Services sector, the Group, through the subsidiary Fincantieri Infrastructure Maritime Works, has signed the contract for the reconstruction, reinforcement and adaptation of the historic international tourist port of Rapallo, significantly damaged by the storms of October 2018. The works for the reconstruction of the port will also aim to secure the town and the marine area of ​​Rapallo.

The Group's total workload reached the level of € 37.9 billion on 30 June 2020, of which € 28.0 billion backlog (€ 29.5 billion at 30 June 2019) and € 9.9 billion soft backlog (€ 3.6 billion at 30 June 2019) with a development of the orders in the portfolio expected up to 2027. The backlog and the overall workload guarantee respectively 4.8 and 6.5 years of work if compared to the developed revenues in the year 2019.

Of the Group's total workload, gross of consolidations between sectors, the Shipbuilding sector represents 94% of the Group's workload (94% in the first half of 2019), the Offshore and Special Ships sector weighs 3% ( 3% in the first half of 2019) while the Systems, Components and Services sector for 7% (5% in the first half of 2019).

Investments

Investments made during the first six months of 2020 amount to euro 122 million, of which euro 25 million in intangible assets (euro 7 million for development projects) and euro 97 million in property, plant and machinery. The incidence of investments on the revenues developed by the Group is 5.2% in the first six months of 2020 compared to 3.5% in the first six months of 2019. Investments in property, plant and machinery made in the first six months of 2020, although affected by the slowdowns due to the effects generated by COVID-19, went in continuity with what started in previous years and mainly concerned: i) the continuation of the adjustment activities of the operating areas and infrastructures of some Italian plants to the new production scenarios, ii) the increase in the safety standards of the plants, equipment and buildings and iii) the continuation of activities to increase the efficiency of the production processes of the Vard Tulcea and Braila construction sites, preparatory both for construction of the hulls and the multi-year program for the construction of sections and pre-fitted sections of cruise ships to support the product network vo of Fincantieri.

Organic

The workforce increased from 19,823 units (of which 9,334 in Italy) at 31 December 2019 to 19,668 units (of which 9,522 in Italy) at 30 June 2020. This decrease is mainly attributable to the reduction in the workforce of Vard and in Norway as a result the closure of the Aukra and Brevik shipyards which in Romania as a result of the efficiency improvement actions undertaken by the Group.

Returns

The following table shows the deliveries expected for the units in the portfolio for the main business areas, divided by year.

Predictable evolution of management

For the second half of the year, the production volumes of the Group's Italian shipyards are expected to return in line with those before COVID-19. In the Cruise area, the Company will be engaged in the delivery of 3 units whose dates have been rescheduled compared to the contractual ones following the production stoppage. In the military area, ongoing programs continue with the Ministry of Defense of Qatar and for the renewal of the Italian Navy fleet, with the aim of recovering substantially within the year the production activity lost in the lockdown months. The production activities of the foreign yards have not been interrupted, in line with the provisions of the local government authorities, although there has been a moderate slowdown in production activities which is expected to recover in the coming months.

As for the cruise sector, while in the United States the CDC (Center for Disease Control and Prevention) has extended the "no-sail order" until 30 September 2020, the shipping companies with routes in seas not subject to US directives have have already resumed activities or are about to resume them. Among these, Ponant, through the Paul Gauguin brand, resumed operations on July 15 in the seas of French Polynesia and Tahiti; in addition, the Carnival Group Aida brand has announced that operations will resume in Germany from August.

It should be noted that, over the past few weeks, the main shipping companies have unequivocally expressed their intention not to cancel any existing order, favoring the entry into their fleet of new ships at the expense of the less efficient ones.

A more performing fleet will allow shipowners to implement the new health security measures, to generate a greater return on investment also by making operating expenses more efficient and at the same time to comply with increasingly stringent environmental regulations.

As evidence of the recovery prospects of the cruise industry, it should be remembered that according to a recent survey conducted by UBS in May, 85% of cruise passengers have declared their intention to still want to travel on cruise ships, despite the health emergency that has sector affected [1]. Also, the main shipping companies have made public the data on reservations for the year 2021, highlighting a positive recovery trend that brings the market back to historic levels.

With reference to medium-long term scenarios, the Group will be engaged in developing the huge workload acquired to date and in converting the consistent soft-backlog into firm orders. The Group also, albeit in a challenging and heavily influenced global and market context by the spread of the COVID-19 pandemic, has maintained its ability to acquire new orders in the core sectors and to seize further diversification opportunities. This ability, combined with the pursuit of the objective of preserving the current workload, suggests that at present the Group will tend to return to the levels of growth and margins incorporated in the current order backlog.

In light of the above, the 2020-2024 Business Plan will be finalized as soon as a more detailed analysis of the effects in the medium-long term of the consequences of the COVID-19 emergency on the macroeconomic context and the operating sectors in which the Group operates is possible .

Sector performance

Revenues and income

Shipbuilding sector revenues as at 30 June 2020, amounted to 2,031 million euros and a decrease of 17.5% compared to the first half of 2019 mainly due to the postponement of production programs following the shutdown of the Group's Italian shipyards which led to a lack of recognition of revenues in the half year for euro 740 million. Revenues for the period refer for € 1,504 million to the cruise ships business area (€ 1,730 million at 30 June 2019) with a decrease of 13.1% which also reflects the negative effect of the change in the Euro / Corona exchange rate Norwegian (approximately euro 28 million) generated by the conversion of the financial statements of the Norwegian subsidiaries, and for euro 526 million to the military ships business area (euro 723 million at June 30, 2019) with a decrease of 27.3% which benefited from the positive change in the Euro / Usd exchange rate (approximately € 6 million) deriving from the conversion of the financial statements of the US subsidiaries.

The revenue trend of the cruise ships business area reflects on the one hand the production acceleration of the first months of 2020, made necessary by the development of the large workload and scheduled deliveries, and on the other the production stoppage in the Italian construction sites of the Group induced by the COVID-19 emergency and the gradual recovery in production starting from 20 April 2020.

The decrease in revenues from the military ships business area reflects on the one hand the postponement of the progress of construction activities related to the orders for the Ministry of Defense of Qatar and for the renewal of the Italian Navy fleet, following the suspension and the slowdown in production in Italy, and on the other the greater contribution of the subsidiary FMG, engaged in the development of the LCS program and the Foreign Military Sales program between the United States and Saudi Arabia.

EBITDA

The sector EBITDA at 30 June 2020 is equal to euro 115 million (euro 239 million at 30 June 2019), with an EBITDA margin of 5.7% (9.7% at 30 June 2019). The margins of the sector were affected by the lesser progress in the construction of cruise ships and military programs in Italy following the postponement of production programs which led to a failure to recognize EBITDA for approximately € 48 million. It should be noted that the Vard Cruise is substantially in balance in line with the subsidiary's restructuring plan launched in 2019, which also led to the revision of the estimate of the costs to be completed for the orders in the portfolio.

Returns

The ships delivered in the period are:

  • "Seven Seas Splendor", the second unit for the client Regent Seven Seas Cruises, brand of the Norwegian Cruise Line group, at the Ancona plant;
  • "Scarlet Lady", the first of four ships for the shipowner Virgin Voyages, new operator of the cruise sector, at the Sestri Ponente plant;
  • “Le Bellot”, the fifth cruise unit for the Ponant customer at the Soviknes plant (Norway);
  • a fishery unit for the customer Finnmark Havfiske AS at the Soviknes plant (Norway);
  • LCS 19 "St. Louis ”, the tenth unit for the US Navy, under the LCS program, at the US factory in Marinette (Wisconsin).

OFFSHORE AND SPECIAL SHIPS

Revenues and income

Revenues of the Offshore and Special Ships sector at 30 June 2020 amount to euro 228 million, a decrease of 2.6% compared to the first six months of 2019 (euro 234 million), and reflect the negative impact deriving from the change in the Euro exchange rate / Norwegian Krone (euro 19 million) due to the conversion of the financial statements of the Norwegian subsidiaries.

EBITDA

The sector EBITDA at 30 June 2020 was negative for 1 million euros (negative for 33 million euros at 30 June 2019), with an EBITDA margin of -0.4% (-13.9% at 30 June 2019). The substantial breakdown of EBITDA in the first half of 2020 highlights the effects of the restructuring plan, initiated by the Group's management in 2019, which also resulted in the revision of the costs to be completed of the orders in the portfolio and the reduction of the production capacity that saw the closure of two Norwegian shipyards of Aukra and Brevik and the exit from the business of the construction of small size vessels for the fishery sectors and of the support vessels to the fishery farms to concentrate production on more profitable sectors .

Returns

Deliveries for the period were:

  • 1 OSCV unit (Offshore Subsea Construction Vessel) to the shipping company Island Offshore AS at the Brevik shipyard (Norway);
  • 1 fishery unit delivered to the shipping company Nergard Havfiske AS at the Brattvåg shipyard (Norway);
  • 2 ferry units delivered to the shipowner Boreal Sjø AS at the Langsten shipyard (Norway);
  • 1 aqua unit delivered to the shipyard of Langsten (Norway) to the shipping company Remøybuen AS.

Revenues and income

Revenues of the Systems, Components and Services sector, equal to euro 392 million (+ 5.7% compared to the first half of 2019), confirm the growth trend, despite the impact of approximately euro 120 million in revenue slippage deriving from the stoppage production of some activities in Italy, thanks to the contribution deriving from Fincantieri Infrastructure, engaged in the reconstruction of the bridge over the Polcevera river in Genoa and the development of IT and electronics activities following the acquisition of the INSIS Group. The acquisition, which took place in July 2019, is part of the development plan of a pole of excellence of electronic systems and software in the defense and civil sectors.

EBITDA

The sector EBITDA at 30 June 2020 is equal to euro 24 million (euro 39 million at 30 June 2019) with an EBITDA margin which stands at 6.0%. The decrease in margins is due to the postponement of production programs with a lack of EBITDA contribution, for € 17 million, as well as to the different mix of products and services sold in the period compared to the first six months of the previous year.

The Other activities mainly include Corporate costs for guidance, control and coordination activities which are not allocated to the other sectors.

Other information

Other significant events of the period

The first Board of Directors of Naviris, the 50/50 joint venture between Fincantieri and Naval Group, was held on January 14, 2020. This partnership consolidates the shared desire of the two companies to build a future of excellence for the marine engineering and marine industries. Giuseppe Bono was assigned the Presidency and Hervé Guillou is a member of the Board of Directors. An intergovernmental agreement was signed during the Franco-Italian summit in Naples on 27 February 2020 which reaffirms the full support of France and Italy for the joint venture. This agreement makes the long-term alliance initiated by the two industrial groups fully operational.

On January 24, 2020, Fincantieri and the Ministry of Defense of Qatar, through Barzan Holdings, a company 100% owned by the Ministry of Defense of Qatar, signed a Memorandum of Understanding (MoU) in Doha aimed at strengthening the strategic partnership through the evaluation and studies of new technologies and capabilities, which could lead to the future acquisition of new units as early as 2020.

On February 24, 2020 Marakeb Technologies, industry leading automation solutions provider, and Fincantieri signed a Memorandum of Understanding (MoU) to explore collaboration opportunities in the automation field.

On March 6, 2020, Cassa Depositi e Prestiti, Eni and Fincantieri, confirming the common commitment in the transition towards decarbonisation and environmental sustainability, signed a Memorandum of Understanding for the development of joint projects within the circular economy, aimed at identifying and implementing technological solutions to deal synergistically with the phenomenon of the marine litter, which compromises the marine and coastal ecosystem mainly due to floating plastic waste and microplastics. The agreement was signed with the aim of studying and developing technologies for the collection of waste dispersed at sea and along the coasts and using them to generate products for mobility and industrial applications.

On March 10, 2020, Fincantieri Infrastructure launched the new 100m steel deck at high altitude. The bridge whose profile will recall the ship's hull as designed by Renzo Piano has overtaken the Polcevera stream. In the second half of the month, the last 100-meter maxi-span was also launched, which led the new Genoa bridge to cross the railway.

On March 13, 2020, following the manifestation of the Coronavirus epidemiological phenomenon and in application of the measures that the Government has gradually implemented, Fincantieri decided to suspend production activities at the Group's Italian sites from March 16 to 29.

On March 26, 2020, despite having put in place all the necessary actions for the safety of its employees, Fincantieri decided to continue the suspension of the work activity of the factories and offices until the date indicated by the Prime Minister's Decree of Ministers of 22 March. To this end, Fincantieri and the national FIM – FIOM – UILM Trade Unions have signed an agreement which provides for the possibility of using the Ordinary Wages Guarantee Fund (CIGO) for the staff of all company sites. In the period covered by the CIGO, however, the maintenance activities of the plants and essential services of the sites were carried out, as well as the direction and management strictly necessary for the current obligations of the company, where possible by applying the smart working tool, and for the performance of preparatory activities for productive recovery.

On April 28, 2020 in Genoa, the last steel span of the bridge over the river Polcevera was launched in the presence of the Prime Minister Giuseppe Conte, the Minister of Infrastructure and Transport Paola De Micheli, the Governor of the Liguria Region Giovanni Toti and the Mayor of the city of Genoa and Commissioner for reconstruction Marco Bucci.

On 5 May 2020 in the framework of the agreement for the promotion and financing of didactic-experimental activities in the naval field, signed last November by the Magnificent Rector of the University of Genoa, Paolo Comanducci, and by Giuseppe Bono, CEO of the Fincantieri Group , the parties signed the agreements to start four PhD projects, lasting three years each. The initiative provides for an overall investment by Fincantieri of over 250,000 euros, relating to the completion of the projects.

On May 19, 2020, Fincantieri announced that it has completed the development of an innovative family of tunnel thrusters specifically dedicated to the cruise market, which establishes a new state of the art with respect to the specific requirements of the application including silence, efficiency, reliability and environmental sustainability.

On 3 June 2020, Eni's CEO Claudio Descalzi and Fincantieri's Giuseppe Bono signed a Memorandum of Understanding (MoU) which extends the collaboration in the field of Research and Development started between the two Italian companies in the 2017.

On 4 June 2020, Naviris signed with OCCAR, the European Organization for Armaments Cooperation, the first research and technology (R&T) contract for a program of 5 research projects, which will form the basis of long-term cooperation. term between Fincantieri and Naval Group. Naviris, prime contractor, will coordinate the technical activities entrusted to the two companies and will have the intellectual property of all the results of the research developed.

Main events after June 30, 2020

On 2 July 2020 the Group, through the subsidiary Insis, acquired a majority stake in Support Logistic Services Srl, a company based in Guidonia Montecelio (Rome), specialized in the construction, installation and maintenance of satellite communication systems, radar and radio communication systems, for military and civil applications.

On 10 July 2020, "Le Jacques Cartier", the last cruise unit of the Explorer series for the owner Ponant, was delivered to the shipyard in Søviknes, Norway. In just two years, all six units of the series were delivered, entirely built at the Norwegian shipyards of VARD.

On July 22, 2020, Naviris signed the contract with OCCAR (European Armament Cooperation Organization) relating to the feasibility study for the mid-life upgrade (MLU) of the four Horizon-class destroyers. Naviris will work in close collaboration with its industrial partners Fincantieri, Naval Group, Leonardo, Thales, Eurosam, MBDA and Sigen.


This is a machine translation from Italian language of a post published on Start Magazine at the URL https://www.startmag.it/smartcity/cosa-succede-ai-conti-di-fincantieri/ on Fri, 31 Jul 2020 08:09:10 +0000.