Sanlorenzo S p A : H1 2020 consolidated results and Ordinary Shareholders’ Meeting

SANLORENZO S.P.A.:

THE BOARD OF DIRECTORS HAS APPROVED

THE HALF-YEARLY FINANCIAL REPORT AS AT 30 JUNE 2020

Solid results and an order portfolio at €566 million allow the company to confirm the positive outlook

for the current year with Net Revenues New Yachts and EBITDA in line with 2019

The strategy to expand the product ranges and introduce innovations and technologies in the market

heavily geared towards sustainability principles continued, with further investments in R&D

THE SHAREHOLDERS' MEETING APPROVED

THE AUTHORISATION TO PURCHASE AND DISPOSE OF TREASURY SHARES

• Consolidated net revenues from the sale of new yachts (Net Revenues New Yachts) of €184.1 million: - 10.4% compared to €205.4 million in the first half of 2019 (-6.9% on a like-for-like basis)
• Consolidated adjusted EBITDA amounted to €25.8 million: -0.3% compared to €25.8 million in the first half of 2019, corresponding to 14.0% of Net Revenues New Yachts
• Group net profit at €10.5 million: -0.6% compared to €10.6 million in the first half of 2019, corresponding to 5.7% of Net Revenues New Yachts
• Investments of €12.4 million compared to €19.1 million in the first half of 2019
• Group net financial position as at 30 June 2020 of €23.5 million, a clear improvement compared to €60.7 million as at 31 March 2020 (€9.1 million as at 31 December 2019 following the IPO)
• Gross backlog as at 30 June 2020 of €565.6 million, growth of €64.8 million compared to €500.8 million as at 31 March 2020 (€567.6 million as at 30 June 2019)
• Order intake supported by a plan of targeted marketing and commercial initiatives starting from September, including "Sanlorenzo Elite Weekends", private boat shows in the Company's shipyards in La Spezia. Participation to the Genoa Boat Show confirmed
• Outlook confirmed for the current year: Net Revenues New Yachts and EBITDA in line with 2019
• The Ordinary Shareholders' Meeting approved the authorisation to purchase and dispose of treasury shares up to a maximum of 3,450,000 shares

1

Ameglia (SP), 31 August 2020 - The Board of Directors of Sanlorenzo S.p.A. ("Sanlorenzo" or the "Company"), which met on today's date, examined and approved the Half-yearly Financial Report as at 30 June 2020.

Massimo Perotti, Executive Chairman of the Company, stated:

«The results for the first half of 2020 once again confirm the validity of Sanlorenzo's business model, which has proven its resilience in the different phases of the economic cycle. In particular, the growth in profitability in the first few months of 2020 was extremely positive and solid in the current context, also benefitting from the effects of significant investments already made to increase production capacity, which have enabled a notable increase in the efficiency of all sites.

Important factors in the future stability of these results were Sanlorenzo's ability to respond to the restrictions connected with COVID-19 and the speed with which the measures were adopted. The initiatives which the Company put in place actually made it possible to limit the suspension of activities to just 28 days - partially already recovered in August - and to confirm the current orders, as with the deliveries of yachts in the summer period.

At the same time, the growth trend in the order portfolio continues, which, as at 30 June, reached €566 million - an increase of €65 million compared to March - and is distinguished for being covered almost entirely by end customers. This provides excellent visibility over the coming months and enables us to again confirm the forecasts for the performance of the current year in line with the results in 2019».

ANALYSIS OF CONSOLIDATED NET REVENUES NEW YACHTS

Net Revenues New Yachts1 for the first half of 2020 amounted to €184.1 million, marking a drop of 10.4% compared to €205.4 million as at 30 June 2019, due to the restrictions imposed by Governments to limit the spread of COVID-19. On a like-for-like basis, excluding Net Revenues New Yachts generated by GP Yachts S.r.l., whose equity investment was sold by the Company in July 2019, the downturn in Net Revenues New Yachts came to 6.9%.

Net Revenues New Yachts by division

(€'000)		Six months ending as at 30 June		Change
	2020	% of total	2019	% of total	2020 vs. 2019	2020 vs. 2019%
Yacht Division	109,994	59.7%	124,429	60.6%	(14,435)	-11.6%
Superyacht Division	59,113	32.1%	65,911	32.1%	(6,798)	-10.3%
Bluegame Division	15,038	8.2%	7,396	3.6%	7,642	+103.3%
Other2	-	-	7,670	3.7%	(7,670)	-100.0%
Net Revenues New Yachts	184,145	100.0%	205,406	100.0%	(21,261)	-10.4%

In the first half of 2020, the Yacht Division generated Net Revenues New Yachts of €110.0 million, equal to 59.7% of the total, down by 11.6% compared to the same period of 2019.

The Superyacht Division generated Net Revenues New Yachts of €59.1 million, corresponding to 32.1% of the total, down by 10.3% compared to the first half of 2019.

The Bluegame Division generated Net Revenues New Yachts of €15.0 million, corresponding to 8.2% of the total, up by 103.3% compared to the first half of 2019.

1Net Revenues New Yachts are calculated as the algebraic sum of revenues from contracts with customers relating to new yachts net of relative fees. In accordance with IFRS standards, the selling price of new yachts and therefore also the calculation of the related revenues reflects the difference between the contractually attributed value of the pre-owned boats subject to exchange and their relative fair value.

2The item "Other" includes Net Revenues New Yachts realised by GP Yachts S.r.l., whose equity investment sold by the Company on 19 July 2019.

2

Net Revenues New Yachts by geographical area3

(€'000)		Six months ending as at 30 June		Change
	2020	% of total	2019	% of total	2020 vs. 2019	2020 vs. 2019%
Europe	112,628	61.2%	128,301	62.46%	(15,673)	-12.2%
APAC	34,456	18.7%	35,470	17.27%	(1,014)	-2.9%
Americas	19,851	10.8%	30,503	14.85%	(10,652)	-34.9%
Middle East and Africa	17,210	9.3%	11,132	5.42%	6,078	+54.6%
Net Revenues New Yachts	184,145	100.0%	205,406	100.0%	(21,261)	-10.4%

In the first half of 2020, Europe, which is the Group's historic market, recorded Net Revenues New Yachts of €112.6 million (of which €19.8 million generated in Italy), accounting for 61.2% of the total, marking a decline of 12.2% compared to the same period of 2019.

The APAC area recorded Net Revenues New Yachts of €34.5 million, accounting for 18.7% of the total and essentially stable compared to the first half of 2019, thanks to a solid recovery of sales in the second quarter.

The Americas recorded Net Revenues New Yachts of €19.9 million, a decrease of 34.9% compared to the first half of 2019, accounting for 10.8% of the total, a result more impacted by the pandemic.

Significant growth was recorded in the Middle East and Africa, with Net Revenues New Yachts up by 54.6%, reaching €17.2 million, corresponding to 9.3% of the total, mainly thanks to the growth of the Superyacht Division.

ANALYSIS OF CONSOLIDATED OPERATING RESULTS AND NET PROFIT

Adjusted EBITDA4 in the first half of 2020 stood at €25.8 million, essentially stable with respect to the result in the first half of 2019, showing an increase of the margin as a percentage of Net Revenues New Yachts, sitting at 14.0%, compared to 12.6% in the same period in 2019.

The significant increase in operating margins is linked to the progressive increase in prices of new orders thanks to the strengthening of the Company's commercial positioning and the efficiencies generated by the implementation of new production capacity following the investments made in the course of 2019 and the early months of 2020.

EBITDA5, including the non-recurring items mostly relating to the portion of non-monetary costs for the period of the 2020 Stock Option Plan and the expenses incurred due to COVID-19, amounted to €25.1 million, down by 2.9% compared to €25.8 million in the first half of 2019, against an improvement in the incidence on Net Revenues New Yachts, which went from 12.6% as at 30 June 2019 to 13.6% as at 30 June 2020.

EBIT amounted to €15.9 million, down by 14.6% compared to €18.7 million in the first half of 2019, corresponding to 8.7% of Net Revenues New Yachts, mainly due to the growth in amortisation/depreciation, which rose from €7.2 million in the first half of 2019 to €9.1 million in the first half of 2020 as a result of the implementation of investments targeted at increasing production capacity and developing new products.

Net financial expenses amounted to €1.1 million, marking a decrease of 50.5% compared to €2.2 million in the first half of 2019. The reduction compared to the same period of 2019 is linked to the better financial conditions applied to the Company by credit institutions and the reduction in debt compared to the first half of 2019, achieved also thanks to proceeds from the share capital increase connected to the IPO.

3On the basis of the nationality of the final customer.

4Adjusted EBITDA is calculated by adding amortisation/depreciation expenses to operating profit/loss adjusted for non-recurring items. 5EBITDA is calculated by adding amortisation/depreciation expenses to operating profit/loss.

3

Income taxes fell from €5.8 million as at 30 June 2019 to €4.6 million in the first half of 2020, corresponding to 30.9% of the pre-tax result.

Group net profit for the first half of 2020 amounted to €10.5 million, essentially stable with respect to the figure in the first half of 2019, amounting to €10.6 million. The incidence on Net Revenues New Yachts rose from 5.2% as at 30 June 2019 to 5.7% as at 30 June 2020.

ANALYSIS OF CONSOLIDATED BALANCE SHEET AND FINANCIAL RESULTS

Net working capital as at 30 June 2020 was positive for €31.3 million, compared to €11.5 million as at 31 December 2019 and €66.7 million as at 31 March 2020. The decrease compared to the figure as at 31 March 2020 amounted to €35.4 million.

Net trade working capital as at 30 June 2020 was positive for €41.0 million, compared to €(1.2) million as at 31 December 2019. Compared to the figure as at 31 March 2020, amounting to €56.6 million, net trade working capital recorded a decrease of €15.6 million.

Net financial position as at 30 June 2020 was €23.5 million, compared to €9.1 million as at 31 December 2019 and €60.7 million as at 31 March 2020. The reduction in net financial position compared to 31 March 2020 was €37.2 million.

Cash and cash equivalents as at 30 June 2020 came to €80.7 million, an increase of €20.5 million compared to 31 December 2019 (€60.2 million) and €17.4 million compared to 31 March 2020 (€63.3 million), leading net current financial debt to show a net cash position of €30.1 million.

The changes in net working capital and the net financial position compared to the first quarter were positively influenced by the trends relating to the seasonal nature of orders typical of the industry, which see deliveries of yachts concentrated in the summer months.

As at 30 June 2020, the Group also had bank credit facilities to cover its liquidity requirements of €110.4 million6, showing an increase of €28.5 million compared to 31 December 2019 and of which €92.3 million available.

Investments made in the first half of 2020 amounted to €12.4 million compared to €19.1 million in the first half of 2019, of which €6.6 million were dedicated to product development and to the creation of models and moulds, and €3.4 million linked to the programme to increase production capacity launched in 2017.

The strategy to expand the product ranges and introduce innovations and technologies in the market heavily geared towards sustainability principles was reconfirmed. Investments in research and development and the creation of new products actually rose by 13.8% compared to €5.8 million in the first half of 2019.

BACKLOG

The backlog7 as at 30 June 2020 amounted to €565.6 million (€381.5 million net of production increases recorded as revenue during the period), growth of €64.8 million compared to €500.8 million as at 31 March 2020 and in line with the figure as at 30 June 2019, €567.6 million.

• Not inclusive of credit lines for reverse factoring and confirming.

7Backlog is calculated as the sum of the value of all orders and sales contracts signed with customers or brand representatives relating to yachts for delivery or delivered in the current financial year or for delivery in subsequent financial years. For each year, the value of the orders and contracts included in the backlog refers to the relative share of the residual value from 1 January of the financial year in question until the delivery date. The backlog relating to yachts delivered during the financial year is conventionally cleared on 31 December.

4