Fincantieri S p A : Solid performance in the First Quarter of 2024 with growth in all key metrics

Rome, May 14, 2024

Press Release

SOLID PERFORMANCE IN THE FIRST QUARTER OF

2024 WITH GROWTH IN ALL KEY METRICS

***

EBITDA UP 16% YoY, STRONG MARGIN EXPANSION AND DELEVERAGING PATH CONFIRMED

• Revenues substantially stable at euro 1,767 million, up 0.2% vs Q1 2023
• EBITDA at euro 100 million, up ca. 16% YoY (euro 87 million in Q1 2023)
• EBITDA margin at 5.7%, significantly improved vs 4.9% in Q1 2023 and 5.2% in FY 2023
• Net financial position (NFP) negative at euro 2,413 million, materially lower than Q1 2023 (euro 2,922 million) and substantially in line with FY 2023 (euro 2,271 million)

SOUND COMMERCIAL PERFORMANCE DRIVEN BY ACCELERATING DEMAND IN ALL BUSINESSES

• Total backlog at euro 39.3 billion, ca. 5.1x FY 2023 revenues, confirming a solid commercial development in all businesses, with a soft backlog of euro 17.3 billion
• In March 2024, Fincantieri signed a contract for 2 PPA units with the Indonesian Ministry of Defence, subject to the necessary authorizations from the competent authorities. In early April, the Company signed a major cruise contract for 4 new cruise ships, finalized at the beginning of the second quarter, and a letter of intent with the same shipowner for the construction of 4 additional units with a gross tonnage of approximately 200,000 tons each. Contracts for 3 Offshore units were signed in April.
• 4 ships delivered, including Sun Princess, Fincantieri's first LNG-powered cruise ship and the largest ever built in Italy, 85 ships in portfolio with deliveries scheduled up to 2030

2024 GUIDANCE

• Fincantieri confirms its guidance for 2024:
• • Revenues at approximately euro 8 billion, up by around 4.5% YoY
  • EBITDA margin at around 6%, up by 1 percentage point vs 2023
  • Leverage ratio (NFP/EBITDA) between 5.5 and 6.5x

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Rome, May 14, 2024

(euro/million)	31.03.2024	31.03.2023	% Change1
Revenue	1,767	1,764	0.2%
EBITDA(1)	100	87	15.8%
EBITDA margin(*)	5.7%	4.9%	0.8 p.p.
Order intake(**)	539	909	-40.7%

1. This figure does not include extraordinary or non-recurring income and expenses. See definition contained in the paragraph Alternative Performance Measures
   (*) Ratio between EBITDA and Revenues
   (**) Net of eliminations and consolidation adjustments

(euro/million)	31.03.2024	31.12.2023	% Change
Net financial position(1)	2,413	2,271	6.2%
Backlog(*)	21,956	23,072	-4.8%

1. See definition contained in the paragraph Alternative Performance Measures
   (*) Net of eliminations and consolidation adjustments

THE EXPANSION IN THE UNDERWATER BUSINESS CONTINUES

On May 9, 2024 an agreement was signed for the acquisition of Leonardo S.p.A.'s "Underwater Armament Systems" business, which, also considering the already signed commercial collaboration agreements and the recent acquisition of Remazel Engineering S.p.A., accelerates and completes Fincantieri's leadership role as technological aggregator in the underwater and naval defence sectors, in line with its strategy.

CAPITAL INCREASE

To finance this acquisition, the Company resolved to submit for approval to the extraordinary Shareholders' meeting a proposal to authorize the Board of Directors to increase the share capital by issuing new ordinary shares to be offered in option to Shareholders for a maximum amount of euro 400 million. As per the authorization's proposal, the Shareholders who subscribe to the rights issue will receive free warrants to subscribe new Fincantieri shares to be issued under a capital increase of up to euro 100 million exercisable within 36 months.

LAUNCH OF THE EMPLOYEE STOCK OWNERSHIP PLAN

The "2024-2025 Employee Stock Ownership Plan" for the Group employees was approved at the Shareholders' Meeting held on 23 April 2024.

* * *

1 The percentage changes shown throughout the document are calculated based on data rounded to the nearest thousand

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Rome, May 14, 2024

Rome, May 14th 2024 - The Board of Directors of Fincantieri S.p.A. ("Fincantieri" or the "Company"), chaired by General Claudio Graziano, has approved the interim financial information as of March 31, 20242.

Pierroberto Folgiero, Fincantieri Chief Executive Officer and General Manager, commented: "We are very satisfied with the results achieved in the first quarter of 2024, which confirm and strengthen the excellent economic, financial and commercial performance delivered last year. Our order intake recorded in the first months of the year further confirms the robust growth in demand in both the civil and military sectors, especially in the Southeast Asian defense market, which, together with the Middle East, was a strategic target of the business plan. The 16% increase in EBITDA in absolute terms and the significant improvement in marginality, up 0.8 points compared to the first quarter of 2023, testify to the effectiveness of the actions outlined in the business plan aimed at organically increasing profitability. Regarding the new strategy, the acquisition of the "Underwater Armament Systems" business line from Leonardo S.p.A. is a significant step that further strengthens our position in the underwater and naval defence sector, whose geopolitical importance is progressively growing. This agreement will allow us to accelerate our technology integration strategy and offer our customers new solutions and products in the new underwater domain. The strategic focus on the digitalization of the ship as a system and the reduction of emissions continues, leading to the industrialization of solutions which are both distinctive for our offer and highly innovative for our customers".

Folgiero concluded: "In order to ensure the widest possible participation in the Group's growth and success, we have launched the '2024-2025 Share Ownership Plan' for our employees, who represent the key factor to guarantee the sustainable success of the company both in the short and long term".

2 Prepared in accordance with international financial reporting and accounting standards (IAS/IFRS) and unaudited

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Rome, May 14, 2024

Highlights

In the first quarter of 2024, the Group confirms its strong profitability growth, with EBITDA up 16% to euro 100 million and EBITDA margin at 5.7% (4.9% in Q1 2023 and 5.2% at the end of 2023).

These achievements reflect a steady increase in margins in all business segments.

Revenues are substantially stable at euro 1,767 million (up 0.2% compared to March 31, 2023), with a progressive acceleration foreseen in the next quarters in line with the production schedule. 2024 guidance is thus confirmed, with revenues expected around euro 8 billion at the end of the year, up 4.5% compared to FY 2023.

The Q1 2024 order intake amounts to euro 539 million and does not include the euro 1.18-billion-contract signed with the Indonesian Ministry of Defence for the supply of 2 PPA units, subject to the necessary authorizations from the competent authorities.

At the end of the first quarter of 2024, the Group business has a significant backlog of about euro 22.0 billion, with 85 ships to be delivered up to 2030, and a soft backlog of euro 17.3 billion.

Net financial debt stands at euro 2,413 million as of March 31, 2024, significantly lower than Q1 2023 (euro 2,922 million) and substantially in line with FY 2023 (euro 2,271 million) mainly due to working capital dynamics.

The ongoing deleveraging process is confirmed, with a leverage ratio (NFP/EBITDA) expected between 5.5 and 6.5x at the end of the year.

Opportunities and strategic developments

• Agreement signed with Leonardo in the underwater business: an agreement for the acquisition of Leonardo's "Underwater Armament Systems" (UAS) business was signed on May 9, 2024. The transaction, aimed at strengthening the group's positioning in the underwater and defence sectors, is expected to be completed at the beginning of 2025. The value of the acquisition is equal to euro 300 million as fixed Enterprise Value, subject to usual price adjustment mechanisms, in addition to a maximum of euro 115 million as a variable component based on certain growth assumptions linked to the performance of the UAS business line in 2024, for a total maximum Enterprise Value of euro 415 million.
• Other developments in the underwater industry: the closing in February 2024 of the acquisition of Remazel, a global leader in the design and supply of highly complex top-side equipment for subsea vehicles, further confirms Fincantieri's growth in the underwater business, a strategic and high value- added sector expected to play an increasingly important role in the Group's plans. Another step in this direction has been taken with the Memorandum of Understanding (MoU) signed in March 2024 with Saipem. The MoU is aimed at evaluating the opportunities for integration between Fincantieri's surface ships and submarines with Saipem's drones, in order to compete in national and international surveillance and control programs for critical underwater infrastructures.

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Rome, May 14, 2024

• New agreements for export growth in the Defence sector: thanks to the term sheet signed in February 2024 for the creation of a joint venture with EDGE, one of the world's leading advanced technology and defense groups, Fincantieri is ready to capitalize on new global export opportunities, with a particular focus on the manufacturing of a broad range of sophisticated naval vessels in the United Arab Emirates and a pipeline valued at approximately euro 30 billion. In March, the Group also signed an MoU with the Alexandria shipyard to investigate opportunities for the shipyard to build new vessels and develop new defence programs. Finally, Fincantieri relaunched its business relations with the Indonesian Ministry of Defense, with the conclusion, on March 28, 2024, of a euro 1.18- billion-contractfor the supply of 2 PPA units. The two ships, originally destined for the Italian Navy, are currently under construction and fitting.
• Major agreement in the Cruise sector: announced on April 8, 2024 a significant order from Norwegian Cruise Line Holdings for the construction of 4 next-generationcruise ships, of which 2 for Regent Seven Seas Cruises and 2 for Oceania Cruises brands, scheduled for delivery between 2026 and 2029. The Group has also signed a Letter of Intent with the same shipowner to explore the construction of 4 additional units (the largest ever built for the Norwegian Cruise Line brand). The ships, slated for delivery between 2030 and 2036, will have gross tonnage of approximately 200,000 tons and the capacity to accommodate around 5,000 passengers each. This second agreement, subject to financing and other standard terms and conditions for such transactions, marks a highly significant new phase in the long-term partnership between the two Groups.

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Operational review by segment

Revenues (euro/million)	31.03.2024	31.03.2023	% Change
Shipbuilding	1,338	1,427	-6.2%
Offshore and Specialized Vessels	299	238	25.7%
Equipment, Systems and Infrastructure	278	265	5.0%
Consolidation adjustments	(148)	(166)	10.8%
Shipbuilding	1,767	1,764	0.2%

Revenues stand at euro 1,767 million at the end of March 2024, substantially in line with the first quarter 2023, with full-year growth expectations confirmed. The Offshore and Specialized Vessels and Equipment, Systems and Infrastructure segments close the period with revenues up 25.7% and 5.0%, respectively, offsetting the expected decrease in Shipbuilding revenues (-6.2%). Before consolidation adjustments, the contribution of the operating segments to Group's total revenues is driven by Shipbuilding, which accounts for 70% (74% in Q1 2023), with Offshore and Specialized Vessels at 16% (12% in Q1 2023) and Equipment, Systems and Infrastructure at 14% (stable vs Q1 2023) of Group's total revenues.

On the commercial front, the Group's order intake in the first quarter 2024 amounts to euro 539 million, compared to euro 909 million in the same period of 2023, with a book-to-bill ratio (orders/revenues) at 0.3x (0.5x as of March 31, 2023).

Order intake (euro/million)		31.03.2024		31.03.2023
	Amount	%	Amount	%
Fincantieri S.p.A.	103	19	82	9
Rest of Group	436	81	827	91
Total	539	100	909	100
Shipbuilding	141	26	252	28
Offshore and Specialized Vessels	498	93	533	59
Equipment, Systems and Infrastructure	207	38	238	26
Consolidation adjustments	(307)	(57)	(114)	(13)
Total	539	100	909	100

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Rome, May 14, 2024

The table below highlights the number of vessels delivered and ordered during the first quarter 2024:

Deliveries and Order intake (number of vessels)	31.03.2024	31.03.2023	Change
Vessels delivered	4	5	(1)
Vessels ordered	4	6	(2)

As of March 31, 2024, the Group's total backlog reaches euro 39.3 billion, including euro 22.0 billion backlog (Euro 23.1 billion as of December 31, 2023) and euro 17.3 billion soft backlog (euro 11.7 billion as of December 31, 2023) with a portfolio visibility up to 2030.

Backlog and total backlog guarantee respectively about 2.9 and 5.1 work years in relation to 2023 revenues.

At the end of the first quarter, the number of ships in the portfolio was 85, stable compared to the end of 2023.

The backlog breakdown by sector is shown in the table below.

Total backlog breakdown (euro/million)		31.03.2024		31.12.2023
	Amount	%	Amount	%
Fincantieri S.p.A.	14,882	68	15,883	69
Rest of Group	7,074	32	7,189	31
Total	21,956	100	23,072	100
Shipbuilding	17,755	81	18,908	82
Offshore and Specialized Vessels	2,086	10	1,866	8
Equipment, Systems and Infrastructure	2,730	12	2,688	12
Consolidation adjustments	(615)	(3)	(390)	(2)
Total	21,956	100	23,072	100
Soft backlog (**)	17,300	100	11,700	100
Total backlog	39,256	100	34,772	100

(*)Soft backlog stands for the value of existing contract options and letters of intent as well as of contracts at an advanced stage of negotiation, none of which yet reflected in the order backlog

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SHIPBUILDING

(euro/million)	31.03.2024	31.03.2023	% Change
Revenue and Income(*)	1,338	1,427	-6.2%
EBITDA(1)(*)	84	78	7.5%
EBITDA margin(*)(**)	6.2%	5.4%	0.8 p.p.
Order intake(*)	141	252	-44.0%
Vessels delivered (number)	1	1	-

(*) Before adjustments between operating segments

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

(1) This figure does not include Extraordinary or non-recurring income and expenses. See definition contained in the paragraph Alternative Performance Measures

In the first quarter 2024, as expected, the Shipbuilding business reports a 6.2% decrease in revenues to euro 1,338 million compared to the same period of 2023, including euro 914 million related to the Cruise segment (euro 930 million as of March 31, 2023), euro 415 million to the Defense segment (euro 484 million as of March 31, 2023) and euro 9 million to the Ship Interiors business with third-party customers (euro 12 million as of 31 March, 2023). The Cruise and Naval businesses contribute 48% and 22%, respectively, to total consolidated revenues (48% and 25% as of March 31, 2023)3.

Cruise segment revenues in Q1 2024 are substantially in line with Q1 2023.

The 14.4%YoY reduction in revenues in the Defense segment is consistent with the development of the backlog in Italy, following deliveries made during 2023, and is affected by lower production volumes in the American shipyards in the first quarter, in particular in relation to the development of the Constellation FFG(X) and the United States - Saudi Arabia Foreign Military Sales programs.

EBITDA of the segment as of March 31, 2024 amounts to euro 84 million, with an EBITDA margin of 6.2% in the quarter, significantly higher than the margin reported as of March 31, 2023 (EBITDA margin 5.4%). In particular, the EBITDA benefits from the positive effects associated with the completion of the corvette program for Qatar.

Shipbuilding orders in the first quarter of 2024 amount to euro 141 million, mainly related to additional work on cruise ships already in portfolio.

In the Cruise segment, in the first quarter of 2024, the cruise ship "Sun Princess", the first unit of the new LNG (liquefied natural gas) class for the shipping company Princess Cruises, a Carnival group brand, and the largest ship ever built in Italy, was delivered at the Monfalcone shipyard.

With regard to the Defense segment, on March 28, 2024, Fincantieri signed a contract with the Indonesian Ministry of Defense worth €1.18 billion for the supply of 2 PPA units, subject to the authorizations required by competent authorities.

3 Before adjustments between operating segments

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OFFSHORE AND SPECIALIZED VESSELS

(euro/million)	31.03.2024	31.03.2023	% Change
Revenue and income(*)	299	238	25,7%
EBITDA(1)(*)	13	9	41,6%
EBITDA margin(*)(**)	4,3%	3,8%	0,5 p.p.
Order intake(*)	498	533	-6,6%
Vessels delivered (number)	3	4	-1

(*) Before adjustments between operating segments

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

(1) This figure does not include Extraordinary or non-recurring income and expenses. See definition contained in the paragraph Alternative Performance Measures

As of March 31, 2024, the Offshore and Specialized Vessels segment reports revenues at euro 299 million, up 25.7% compared to Q1 2023. The revenue increase reflects the significant contribution of the orders for offshore wind support vessels awarded last year.

EBITDA is positive at euro 13 million in the first quarter (euro 9 million as of March 31, 2023), with an EBITDA margin at 4.3% (3.8% in the first quarter of 2023), confirming the path of recovery of Vard's margins outlined in the Business Plan.

The order intake in the Offshore and Special Vessels segment amounted to euro 498 million in the first three months of 2024 and is mainly related to the following orders:

• 2 CSOV units for the Windward Offshore consortium;
• 1 CSOV unit for Cyan Renewables;
• 1 CSOV unit for Navigare Capital Partners.

The units delivered during the first quarter 2024 were:

• 1 Marine Robotic unit for Ocean Infinity;
• 1 Fishery unit for Deutsche Fischfang-Union;
• 1 CSOV unit for Norwind Offshore.

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Rome, May 14, 2024

EQUIPMENT, SYSTEMS AND INFRASTRUCTURE

(euro/million)	31.03.2024	31.03.2023(*)	% Change
Sector
Revenue and income (**)	278	265	5.0%
EBITDA (1) (**)	16	10	70.5%
EBITDA margin (**) (***)	5.8%	3.6%	2.2 p.p.
Order intake	207	238	-13.2%
Electronics and Digital Products
Revenue and income (**)	82	76	7.7%
towards other Group businesses	61	56	7.9%
EBITDA (1) (**)	2	4	-42.7%
EBITDA margin (**) (***)	2.8%	5.4%	-2.6 p.p.
Mechanical Systems and Components
Revenue and income (**)	73	59	25.2%
towards other Group businesses	44	34	31.0%
EBITDA (1) (**)	8	4	102.9%
EBITDA margin (**) (***)	10.8%	6.7%	4.1 p.p.
Infrastructure
Revenue and income (**)	123	131	-5.7%
towards other Group businesses	3	3	-1.0%
EBITDA (1) (**)	6	2	273.8%
EBITDA margin (**) (***)	4.9%	1.2%	3.7 p.p.

1. The data as of 31.03.2023 were restated due to the redefinition of the operating segments

1. Before adjustments between operating segments

(***) Ratio between EBITDA and revenue and income of the sector

(1) This value does not include non-recurring income and expenses from ordinary operations. See definition in the paragraph Alternative Performance Measures

As of March 31, 2024, revenues from the Systems, Components and Infrastructure segment accounts for euro 278 million, up 5.0% compared to the first quarter of 2023. The increase is mainly attributable to the inclusion of the Remazel Group (euro 14 million) in the Mechanical Systems and Components cluster and consolidated as of February 15, 2024. The Electronics and Digital Products cluster records a 7.7% increase, thanks to the higher volumes developed in the first quarter of 2024 by Vard Electro to support cruise ship construction and offshore wind activities. The Infrastructure cluster revenues decrease by 5.7%, mainly due to the lower level of progress, compared to the previous period, of the works related to the contract for the construction of the Miami terminal for MSC, which is expected to be completed in 2024.

The segment's EBITDA is positive for euro 16 million as of March 31, 2024, with an EBITDA margin at 5.8% materially higher than the 3.6% margin recorded as of March 31, 2023, and in line with the Company's growth forecasts. The improvement in the EBITDA margin compared to the first quarter of 2023 is due to the positive contribution of the Mechanical Systems and Components cluster, also thanks to the

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