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Fincantieri: the BoD approves 9M 2018 results

Important steps taken on strategic alliances -ATTACHMENT

The Board of Directors of Fincantieri SpA, chaired by Giampiero Massolo, has examined and approved the interim financial information at September 30, 2018.

Results in line with the Business Plan 2018-2022 targets: revenues at September 30, 2018 up 8.5% compared to the same period of 2017, EBITDA margin at 7.3%, up 11% compared to September 30, 2017 (6.5%). 

Total backlog once again at record levels at euro 32.5 billion, almost 6.5 times 2017 revenues: backlog as at September 30, 2018 was euro 26 billion (euro 20.3 billion as at September 30, 2017) with 104 ships in the order book; the soft backlog at the same date was approximately euro 6.5 billion (approximately euro 5 billion as at September 30, 2017). The workload allows Fincantieri to reinforce its global leadership and ensures multi-year visibility in terms of backlog for the Italian shipyards.

Important commercial achievements in the quarter

in the cruise business, acquisition of a new important customer, Tui Cruises (Joint Venture between Tui Ag and Royal Caribbean Cruises), with an order for two new-concept, LNG-powered cruise ships; the order expands Fincantieri’s client portfolio to include a company of the Royal Caribbean Group. Conversion into order of an option for two cruise ships by Norwegian Cruise Line; confirmation of the order for a cruise ship by Cunard, an iconic brand belonging to Carnival Corporation & plc; signing of a MoA with Princess Cruises for two new-generation cruise ships. 

in the naval business, through the subsidiary Fincantieri Marinette Marine (in a consortium with Lockheed Martin Corporation) acquisition of a contract for a new Freedom-class unit of the US Navy Littoral Combat Ship program (LCS 29, the fifteenth of the program) and of an order from the US Government to advance work in support of the construction of four Multi-Mission Surface Combatant (MMSC) ships for the Kingdom of Saudi Arabia.

Vard acquired contracts for a third expedition cruise vessel by Hapag-Lloyd Cruises and for two new expedition cruise vessels by Viking. 

Key events after the quarter:

Fincantieri and MSC Cruises signed a memorandum of agreement (MoA) for the construction of four ultra-luxury cruise ships, further strengthening their ties; the ships will feature the best and latest environmental technology and other cutting-edge maritime solutions at sea (AVIONEWS). 

The company and Virgin Voyages signed a contract for the construction of a fourth cruise ship, featuring highly innovative design solutions, specifically to address energy recovery and the reduction of the overall environmental impact (AVIONEWS).

The industry and Leonardo have established the guiding principles to strengthen their cooperation in the naval sector by revamping their Orizzonte Sistemi Navali Joint Venture (of which Fincantieri holds a 51% stake) with the aim of giving the latter the responsibility for the development of the Combat Systems. The agreement will allow both companies to compete in an increasingly challenging market, enhancing their complementary expertise -developed at national level- in order to expand market presence abroad (AVIONEWS). 

The firm and Naval Group announced the start of discussions aimed at defining the terms and conditions for the incorporation of a 50/50 Joint Venture, which represents the first step towards the creation of a broader Alliance in the naval business as envisaged by the intergovernmental agreement signed on September 27, 2017 in Lyon (AVIONEWS). 

In the month of November, Vard’s delisting process was completed, following which Fincantieri holds a 95.99% stake in Vard. 

During the Board meeting Giuseppe Bono, Chief Executive Officer, said: “Fincantieri is living an important moment of its life. Revenue growth in the coming years will be ensured by a workload that, in terms of certainty and long term visibility has no equal in the country’s industrial landscape. Indeed, our total backlog stands at euro 32 billion, with scheduled deliveries stretching to 2027. Building upon this, we are laying the foundations to grow in the European shipbuilding and defense industries as protagonists. As recently announced, we are ready to set up our alliance with Naval Group through a Joint Venture that will make both of us more competitive globally. At the same time, the renewed partnership with Leonardo is a clear example of how Fincantieri is working to strengthen the national industry and to enhance the value of Italian excellences on export markets".

Below, the integral version of the financial report (nine pages).

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