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MarketScreener Homepage  >  Equities  >  Italian Stock Exchange  >  Fincantieri S.p.A.    FCT   IT0001415246

FINCANTIERI S.P.A.

(FCT)
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THE BOD APPROVES 9M 2020 RESULTS: 100th CRUISE DELIVERED, REVENUES AT EURO 3.5 BILLION AND TOTAL BACKLOG FULLY PRESERVED AT EURO 36.8 BILLION

11/12/2020 | 12:51pm EST

THE BOD APPROVES 9M 2020 RESULTS: 100th CRUISE DELIVERED,

REVENUES AT EURO 3.5 BILLION AND TOTAL BACKLOG FULLY PRESERVED

AT EURO 36.8 BILLION

COVID-19 Update

  • No order cancellations and consistent progress in production, rescheduled following production downtime of Italian operations occurred in the first half of this year
  • Cruise industry - "No Sail Order" lifted in the United States, no suspension of operations in Italy. Leading cruise operators are currently planning a gradual resumption
  • Two cruise ships delivered from the Group's Italian shipyards amid the emergency - "Enchanted
    Princess", the 100th cruise ship delivered by Fincantieri and built for Princess Cruises, a Carnival Corporation brand, and "Silver Moon", for Silversea Cruises, a Royal Caribbean Group brand - and one expedition cruise vessel, built in Norway by Vard for Ponant
  • Effective measures to curb the spread of the virus have allowed a prompt detection of COVID-19cases
    • tested positive are now under 3%:
    • Body temperature measurement through thermoscanning
    • Staggered entrances and social distancing
    • Work-from-homepolicy (available for 48% of the functions/positions)
    • Daily supply of PPE in all Group's sites
  • Employees satisfaction for the commitment shown by the Company to face the emergency: 91%1
  • Production ramp up still deeply affected by the implementation of the new safety measures
  • Sound funding capacity with liquidity and credit lines to support the current situation and its foreseeable developments in the medium term, also thanks to the new loan, granted by a pool of banks and guaranteed by SACE, whose value amounts to euro 1.15 billion
  • Q3 2020 revenues (euro 1,165 million), EBITDA (euro 81 million) and margins (7.0%) show a recovery in production activities broadly in line with pre COVID-19performance

Consolidated 9M 2020 results

  • Revenues at euro 3,534 million (euro 4,217 million at September 30, 2019), down by 16.2%, negatively affected by the lower production value led by COVID-19 outbreak: production hours -19% compared to the ones originally planned (3.1 million of production hours of which 2.7 million hours related to 2020 first half) and euro 945 million loss in revenues
  • EBITDA, at euro 200 million, impacted by the downturn in production volumes of the Group's Italian sites
    (euro 306 million at September 30, 2019) with an EBITDA margin of 5.7%, up from 5.0% of the first half of the year (7.3% at September 30, 2019). The postponement of production programs led to an EBITDA shortage of approximately euro 71 million

1 Internal survey dated 30/06/2020

1

  • COVID-19related expenses, at euro 149 million, are accounted in the extraordinary expenses and are mainly attributable to a lower operating leverage led by the downturn of production volumes during operations downtime and gradual ramp up, as well as to expenses for ensuring staff health and safety
  • Total backlog2 at euro 36.8 billion, almost 6.3 times 2019 revenues, with an order intake of euro 1.9 billion: backlog at euro 26.9 billion (euro 28.4 billion at September, 2019) with 88 units to be delivered up to 2027, and soft backlog at euro 9.9 billion (euro 3.9 billion at September 30, 2019)
  • Net Debt3 at euro 1,425 million (euro 736 million at December 31, 2019), affected by the postponement of cruise ships deliveries and of part of expected installments. Such rescheduling, resulting in a working capital absorption, falls within of the Group's strategy to preserve the sizable backlog, as well as to strengthen the relationship with its clients, now engaged in improving the efficiency of their fleets also through new ships, fully compliant with new environmental, health and safety standards. The effects on net debt of these measures along with the rescheduling of deliveries - led by the production slowdown - is approximately euro 600 million, as expected. This gap will be bridged in the next few years, through the delivery of the ships in backlog.
  • Delivered 14 units from 9 different shipyards, of which 5 cruises, 2 naval vessels, and 3 fisheries
  • Fincantieri Marinette Marine prime contractor in the FFG(X)4 program for the first-in-class guided missile for the US Navy, and options for 9 additional units. FMM has also been shortlisted for the design and engineering of LUSV5, future large-size unmanned surface vessels
  • European tender for the supply of a EO/IR6 seeker emulator for the assessment of the Defense countermeasures systems effectiveness awarded to INSIS (renamed Fincantieri NexTech). The subsidiary signed a multi-yearagreement with Autostrade Tech and IBM for the implementation, sale, and joint maintenance of an innovative system for the monitoring and safeness on highway infrastructures
  • Marine Interiors will supply Shanghai Waigaoqiao Shipbuilding Co. Ltd (SWS) with 2,800 cabins for the cruise ship under construction, for which the JV CSSC, a joint venture between Fincantieri China and CSSC Cruise Technology Development Co. Ltd, is licensing the technological platform and a series of technical services
  • JV Naviris: second contract signed with OCCAR7 for a feasibility study on the mid-life upgrade (MLU) of four Horizon frigates (two units for the Italian Navy, and two for the French Navy)

Other key events

  • Safe Air: Fincantieri, in close collaboration with the ICGEB8 virology lab, has developed an new air sanitation system, "Safe Air", which will significantly improve air quality and purity on cruise ships
  • Vard signed an agreement for the engineering and construction of an additional innovative fishery unit for Luntos Co. Ltd. The first unit was ordered back in 2019

2Sum of backlog and soft backlog

3Excluding construction loans

  1. FFG(X): Future Frigate
  2. LUSV: Large Unmanned Surface Vessel
  3. EO/IR: electro-optical/infrared
  4. OCCAR: Organization for Joint Armament Cooperation
  5. ICGEB: International Centre for Genetic Engineering and Biotechnology

2

  • Infrastructures: San Giorgio bridge in Genoa, was inaugurated on August 3, 2020 at the presence of both the Italian President Sergio Mattarella and the Italian Prime Minister Giuseppe Conte. With reference to the partnership agreement established for the "Dall'Ara" stadium and anti-stadium project, the municipality of Bologna (IT) declared it as matter of public interest
  • Zeus keel laying: the experimental zero-emissionvessel, in construction in Castellammare di Stabia shipyard (NA), will be equipped with a 130 kW fuel cell system, and a battery-system guaranteeing navigation for 8 hours at a speed of 7.5 knots
  • Fincantieri's commitment to innovation celebrated with the MIKE9 award, won within the Global Companies cluster, for the company's forward-looking strategy and its sustainable business approach

* * *

Rome, November 12, 2020 - The Board of Directors of FINCANTIERI S.p.A. ("Fincantieri" or the "Company"), chaired by Giampiero Massolo, has examined and approved the interim financial information at September 30, 202010.

Giuseppe Bono, Fincantieri's Chief Executive Officer, stated: "Results at September 30 mirror the adversities, faced by the world economy and by Fincantieri as well, of one of the most challenging periods in history. The mere numerical comparison with the same period last year should not be considered relevant, with 2020 being a truly unprecedented year. Moving past the results, I want to highlight our ability to look forward, securing stability and work for the next years for our shareholders and stakeholders. The cruise industry is gradually recovering, as it should be, and that validates our strategy that has allowed us to preserve our backlog, keeping production visibility up to 2027/2028. As for the naval business, in addition to the recent prestigious order for the US Navy, we are currently negotiating with different countries to export FREMM frigates. Besides, we are also reaching pivotal milestones in innovative business areas with remarkable prospects, namely in infrastructures and within the context of cutting-edgeproducts and services.

Bono concluded "In the meantime, we implemented strict measures to safeguard our workers, the real asset of our Group, applying several protocols that contained infections within our sites. Furthermore, I must acknowledge the commitment embraced by the entire staff, working enthusiastically to cope with this challenging situation meanwhile ensuring a thriving future for the Group."

* * *

  1. MIKE: Most Innovative Knowledge Enterprise
  2. Prepared in accordance with international financial reporting and accounting standards (IAS/IFRS) and unaudited

3

FINANCIAL INFORMATION

30.09.2019

30.09.2019

31.12.2019

(euro/million)

30.09.2020

30.06.2020

restated

reported

(*)

5,849

Revenues

3,534

2,369

4,217

4,254

320

EBITDA

200

119

306

287

5.5%

EBITDA margin

5.7%

5.0%

7.3%

6.7%

  1. The 2019 comparative figures have been restated to mirror the discontinued operations of small vessels construction business within the fishery and the aquaculture sectors and the disinvestment of the Aukra shipyard

Revenues in the first nine months of 2020 were at euro 3,534 million, down by 16.2% compared to the same period last year. The performance was considerably affected by COVID-19 outbreak, mainly during the first semester. To respond to the health emergency, the Group has deemed necessary to suspend all activities in the Group's Italian plants and shipyards to protect its resources, ahead of the Government's emergency regulations, and to gradually resume them only after all the strict safety protocols had been implemented. Fincantieri revised then its production program following deliveries rescheduling. Such dynamics, mainly related to the Shipbuilding segment, resulted both in a loss of 3.1 million production hours, in comparison to the amount originally planned - of which 2.7 million attributable to the first semester only - and in lower revenues for euro 945 million (euro 790 million concerning the first half of the year). The production value downturn was also partly attributable to the negative impact (euro 42 million) of the conversion to Euro of foreign subsidiaries revenues, originally recorded in Norwegian Krone. It is note worth to mention that 85% of total revenues comes from foreign clients (81% at September 30, 2019).

Group EBITDA at September 30, 2020 stood at euro 200 million (euro 306 million at September 30, 2019), with an EBITDA margin of 5.7%, up from 5.0% first semester margin (7.3% at September 30, 2019). The shortfall in EBITDA of about euro 71 million (of which 6 million concerning Q3) is attributable to the aforementioned facts. Such a shortage in EBITDA is attributable to the Shipbuilding segment for euro 51 million (euro 48 million attributable to the first semester only) and to the Equipment, Systems and Services segment for euro 20 million (euro 17 million for the first semester only). The latter was also negatively impacted by the different combination of products and services delivered during the period. Offshore and Specialized Vessels' EBITDA was largely at breakeven as a result of the reorganization plan launched in 2019.

Shipbuilding

30.09.2019

30.09.2019

31.12.2019

(euro/million)

30.09.2020

30.06.2020

restated

reported

(***)

5,088

Revenues(*)

3,104

2,031

3,776

3,686

3,574

Cruise ships

2,258

1,504

2,677

2,587

1,503

Naval vessels

837

526

1,083

1,083

11

Other activities

9

1

16

16

375

EBITDA (*)

191

115

327

336

7.4%

EBITDA margin (*) (**)

6.2%

5.7%

8.7%

9.1%

(*) Before eliminations between operating segments

(**) Ratio between segment EBITDA and Revenue and income

(***)The 2019 comparative figures have been restated following the reallocation of Vard Electro's activities from the Offshore and Specialized Vessels to the Shipbuilding segment.

Revenues in the Shipbuilding segment at September 30, 2020 were equal to euro 3,104 million, down by 17.8% when compared to the first nine months of 2019.

4

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Disclaimer

Fincantieri S.p.A. published this content on 12 November 2020 and is solely responsible for the information contained therein. Distributed by Public, unedited and unaltered, on 12 November 2020 17:50:01 UTC


© Publicnow 2020
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Financials
Sales 2020 5 230 M 6 364 M 6 364 M
Net income 2020 -184 M -224 M -224 M
Net Debt 2020 1 508 M 1 835 M 1 835 M
P/E ratio 2020 -5,06x
Yield 2020 0,37%
Capitalization 909 M 1 104 M 1 106 M
EV / Sales 2020 0,46x
EV / Sales 2021 0,38x
Nbr of Employees 19 668
Free-Float 28,3%
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Technical analysis trends FINCANTIERI S.P.A.
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Mean consensus HOLD
Number of Analysts 5
Average target price 0,57 €
Last Close Price 0,54 €
Spread / Highest target 21,0%
Spread / Average Target 6,15%
Spread / Lowest Target -6,89%
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Managers and Directors
NameTitle
Giuseppe Bono Chief Executive Officer & Director
Giampiero Massolo Chairman
Massimiliano Cesare Independent Non-Executive Director
Paola Muratorio Secretary & Independent Director
Fabrizio Palermo Director