Fincantieri SpA Q4 2024 Earnings Call Transcript

The following is excerpted from the question-and-answer section of the transcript.

Question: Alessandro Pozzi - Mediobanca - Analyst : Good afternoon. Thank you for taking my question, sir. I have three. And the first one, is on margin guidance for 2025. Certainly, meaningful improvement, year-on-year, and I guess there are, many different, driving factors. there is WASS. There is probably a mix effect. REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. MARCH 24, 2025 / 2:30PM, FCT.MI - Q4 2024 Fincantieri SpA Earnings Call There's also potentially, I guess the cost synergies, on the back of, higher productivity, given that you made, meaningful investments in previous years. So I was wondering, if you can give us a bit more color of, what -- what are the main drivers for the margin improvement? The second question is, there are a lot of export campaigns. I think last time you talked about Norway. I think since then, we've seen MoUs between Italy and Saudi Arabia. I think there are potential new opportunities with India as well. And yes, if you can give us maybe an update on export opportunities in Middle East and India as well. And also a follow-up from this one. Given the substantial amount of potential export military opportunities, would it make sense at some point potentially to convert cruise shipyards into military ones? Thank you.

Question: Alessandro Pozzi - Mediobanca - Analyst : Thank you. That's very helpful. Thank you very much. I'll turn it back.

Question: Emanuele Gallazzi - Equita - Analyst : Good afternoon, everybody. Thank you for taking my question. I have three questions. The first two are on the Naval business. Basically, we have heard a lot of talks about the need for consolidation of the defense industry. And you also mentioned the potential industrial opportunity. So I would like to have your view on this at this stage? And how do you see the European shipbuilding industry evolving in the coming year? The second one is on Trump that is supporting a re-shoring strategy for the shipbuilding industry. So I know that, it's probably early, but do you see, let's say, a risk or an opportunity from this and what could Fincantieri do for the US shipbuilding industry? And the third question is on the guidance and specifically on the net financial position guidance because if I'm not wrong, you are guiding for a net debt around EUR2 billion in 2025. Clearly, there is the acquisition of WASS, but also the cash in from Indonesia. So can you help us understanding the moving parts like the net working capital and the CapEx and if the guidance assume the full cash in of the EUR600 million financial credit in 2025? Thank you.

Question: Emanuele Gallazzi - Equita - Analyst : Thank you very much. Very clear. Thank you.

Question: Gabriele Gambarova - Intesa Sanpaolo - Analyst : Yes. Good afternoon, everybody. Three questions from my side. On the US and on the constellation program, if you could please give me some update. I think it's about execution, but we know that you need more blue collar workforce. So there are many pieces around any update on this front, even maybe pricing would be very useful. And then on Cruise, I understand you are managing, let's say, the business to remain at EUR4 billion. But even here, any comment on the Norwegian contract you signed a month ago would be interesting because it seems to me that the pricing environment is improving markedly. So it would be interesting to know if it's just my interpretation or something is moving on this front. And the third one, sorry, I return on the net debt guidance because it is not very clear to me. The normalized net debt at the end of 2024 was around EUR1.6 billion, so without considering the capital increase. But if I apply the 3.3 ratio to the expected EBITDA, I draw a debt which is higher than EUR2 billion. So there should be roughly EUR400 billion of absorption. I'm not able to understand even because you have Indonesia in the middle. So I was wondering, if we should refer to the 3.3 calculated on the normalized debt or the lower net financial position EBITDA reported, which is around 2.5, and this would mean basically a stable normalized debt by the end of 2025?

Question: Gabriele Gambarova - Intesa Sanpaolo - Analyst : Okay. Thank you very much, Pierroberto. Thank you.

Question: Antonio Gianfrancesco - Intermonte - Analyst : Hi, good afternoon, and thank you for taking my question. Two from my side. The first is about full year '25 guidance. So in light of the introduction into the guidance of a positive net results in full year '25, should we start to consider a dividend to be paid next year? And that was the first one. The second is about the opportunity related to the tender to build the five frigates for Norway Navy. As reported by some press articles, Fincantieri is currently short list together with some of your other well-known competitors. So what is the time line for knowing the outcome of the tender? And what are your expectations regarding this opportunity? Do you think it will be an advantage for you to be able to build the new frigates directly in Norway shipyards? And thank you.

Question: Antonio Gianfrancesco - Intermonte - Analyst : Very clear. Thank you. Thank you very much.

Question: Lucas Ferhani - Jefferies - Analyst : Hello. Good afternoon. Thank you for taking the time. I just wanted to ask a question on the underwater business separation you talked about from Q1 2025. Can you give us a bit more of a flavor on what you intend to disclose? I assume, the business will be split between kind of parts that go into naval and parts that are going into ESS. So what exactly do you want to show? And do you want to provide also maybe more information regarding the naval business as it becomes maybe a more important part of the business? Thank you.

Question: Lucas Ferhani - Jefferies - Analyst : Understood. I wanted also to ask whether the revenues on your EBITDA, but maybe I'll leave it then to the presentation.

Question: Lucas Ferhani - Jefferies - Analyst : Perfect. Thank you.

Question: Gabriele Gambarova - Intesa Sanpaolo - Analyst : Yes. Thank you. Thank you, again. Just a couple of follow-ons. The first one is on Offshore and Specialized Vessels, because the top line was up nicely, plus 28%, but the EBITDA margin was almost stable at 4.9%. So I was wondering what could be the path going on for this business, I guess, the top line growth, but what about margins? And the second and last is, I swear, on this. Basically, you're going to become profitable at bottom line level. I was wondering if you have an idea in rough on tax loss carry forward off balance fiscal credits basically. That's it.

Question: Gabriele Gambarova - Intesa Sanpaolo - Analyst : Okay. Okay. Thank you.