Fincantieri Aktie

Good afternoon. This is the Chorus Call conference operator. Welcome, and thank you for joining the Fincantieri First Quarter 2026 Results Conference Call. [Operator Instructions]

At this time, I would like to turn the conference over to Mr. Folgiero, Chief Executive Officer and Managing Director. Please go ahead, sir.

Apologies for the technical issue. We will start again. So, we are pleased to present another strong set of results, which further demonstrate Fincantieri's ability to capitalize on favorable macro trends while maintaining financial discipline and ensuring consistent execution of its backlog. This strong momentum builds upon a remarkable 2025 and provides a solid foundation to support the group's growth strategy. We achieved a solid revenue performance despite the unfavorable comparison with a particularly strong Q1 2025, which benefited from the order for 2 PPA units for the Indonesia Navy.

Revenue visibility for the rest of the year and beyond is very clear, supported by the group's significant long-term backlog. We delivered a further material improvement in EBITDA margin of approximately 1 percentage point year-on-year, reaching 7.4% in Q1 2026, reflecting a remarkable increase in profitability across all segments and the strong commitment on operational efficiency, cost discipline and execution excellence.

On the commercial front, we achieved a new record high total backlog at over EUR 74 billion, with the new contracts further extending the visibility on deliveries up to 2039. The value of the contract signed in the first 4 months of the year already exceeded the 2026 annual target of approximately EUR 11 billion envisaged in 2026-2030 business plan.

Our deleveraging path continues with net debt adjusted EBITDA last 12 months ratio increasing to 1.1x -- significantly improving compared to the full year 2025, supported by cash generation over the period and by the EUR 15 million (sic) [ EUR 500 million ] capital increase completed in February 2026. On top of this robust set of results, fully confident on the group's growth trajectory, we are raising our 2026 guidance.

Let's turn now to Page 4. Going deeper into our commercial performance, we achieved another strong set of results in the first quarter 2026, with a book-to-bill at 1.6x and an all-time high total backlog of EUR 74.2 billion, increasing by 17.4%, compared to the end of 2025 and guaranteeing approximately 8.1 years of work. The backlog in Q1 2026 reached EUR 42.7 billion. The new significant orders announced in the first quarter of the year, which I mentioned before, are included in the soft backlog and will feed into the order intake and backlog as they become effective in the coming months.

Let's now move to Page 5 to have a look at our order book and deliveries. In the first 3 months of 2026, we delivered 5 units: 2 cruise, 3 offshore vessels from 5 different shipyards. This is an impressive result, also considering that this year, we expect to deliver a record of 8 cruise vessels. In April, we also delivered the first multi-purpose support vessel, Tritone, to the Italian Navy following an extensive upgrade program on the original Vard offshore ship. The vessel is designed to ensure maximum operation of versatility with specific reference to the underwater domain. As we speak, we have a full slate of deliveries scheduled for the medium, long term, offering a clear and profound visibility up to 2036 with 94 units in order book. Considering the new order for 3 cruises ships for Princess Cruises signed in April 2026, we have extended the visibility up to 2039.

Let's now move to Page 6 for an overview of our commercial performance. In the first months of 2026, we signed important contracts exceeding the target set for the full year, confirming the group's impressive commercial momentum. As mentioned, these are still subject to financial and other typical conditions, therefore, not yet reflected in the order book, but with a clear visibility in their conversion into hard backlog. We confirm our leadership in the construction of increasingly advanced and sustainable cruise ships with new orders signed for 3 new LNG-powered Voyager class vessels for Princess Cruises in addition to the contract signed in the first quarter of 2026 with Viking for -- NCLH for 5 cruise ships.

We continue to strengthen our position in the U.S. with an important contract covering materials and engineering for the first 4 units under the 35 ship Medium Landing Ship program. This step precedes a future award of construction contracts and represents an important step in the evolution of our long-standing partnership with U.S. Navy.

Last but not least, in the Underwater business. In February, we signed the largest order ever for WASS for the supply of lightweight torpedoes for the Royal Saudi Naval Force, not yet included in the backlog. In addition, we signed 2 key strategic agreements for the production of a new class of high-speed, multi-mission Unmanned Surface Vessel developed by Saildrone, marking a concrete step forward in Fincantieri's industrial strategy to integrate and manage solution into its defense portfolio. And the strategic agreement with KAYO to establish a joint venture in deconstruction and maintenance of Naval assets in Albania. Also pursuing commercial opportunity for smaller Naval vessels in international markets, in which Fincantieri will act as prime contractor, opening up new geographical markets, new product lines and expanding our production.

The strong commercial momentum supports our balanced strategy, which maximizes the value growth opportunities intrinsic in all of our business segments. In Cruise, we continue to benefit from our profound backlog, which gives us very long-term visibility and enables us to tie in our supply chain for the long haul. This impressive backlog is also significantly derisked, thanks to a very high proportion of sister ships and only 7 prototypes in our order book.

The full saturation of our shipyard capacity optimizes our fixed costs and increases our margins. The margin growth in Cruise is clearly visible in the overall results of the first quarter 2026. We are also seeing a positive evolution on prices with revenue per gross ton increasing by more than 20% between 2026 and 2030, as well as an improvement in payment conditions and recent contracts.

In defense, market backdrop remains extremely supportive. As we have mentioned recently, we expect approximately EUR 5 billion new orders in the coming months, also supported by the progressive allocation of the safe funding facility. More broadly, we continue to see structural growth in naval defense also in the medium, long term with a macro trend, which is decoupled for the new -- from the news flow on ongoing conflicts.

The current tension on energy supply and prices has sparked a demand for energy security, in particular, in Europe, which provides significant opportunities in offshore, both for wind and oil and gas. It also promotes the strategic importance of developing regional value chains, additional growth opportunity for Vard are emerging in defense, including the evolution of the Vard-like mothership concept, as I mentioned, and the Nordic defense programs as well as in commercial segments such as cable-layers and next-generation icebreakers.

Finally, in underwater, rising geopolitical tensions and the growing need to protect critical energy and communication infrastructure are accelerating demand for advanced subsea solutions, threat mitigation technologies and nonconventional capabilities in high value-added premium margin market. There are also significant opportunities in commercial applications in underwater telecommunications, deep-sea mining, energy at sea, and aquaculture, which we intend to capture.

This positive outlook, coupled with the solid performance delivered in Q1 gives us full confidence in our trajectory and enables us to raise our 2026 guidance. We expect revenue in a range of EUR 9.3 billion to EUR 9.4 billion; EBITDA in the range of EUR 700 million to EUR 710 million; with an EBITDA margin confirmed at approximately 7.5%. Net profit in the range of EUR 140 million to EUR 180 million. And finally, net debt adjusted EBITDA ratio at approximately 2x, which equals to 1.3x including the capital increase completed in February 2026.

Turning to Page 9 for more color on nonorganic growth plans. As we communicated, the EUR 500 million capital increase that we successfully completed last February is intended to support our selective inorganic growth strategy through M&A opportunities, in particular, in relation to unconventional underwater solutions, where we see significant space to expand our position and in technologies that will enable us to accelerate our product and process innovation.

The underlying funding strategy is consistent with the one we applied for the acquisition of WASS, where the capital raise was used to fund the acquisition of the division. Such track record in M&A in recent deals like Remazel and WASS is strong in light of the growth profile of these companies that have been highly accretive to the group's performance. We are currently looking at a number of potential targets, and of course, we will update you in the upcoming months.

Now I will hand the call over to Giuseppe, who will discuss our financial results for the first quarter of 2026 in more detail. Please, Giuseppe.

Thank you, Pierroberto. I'm on Page 11 right now. Good afternoon, everybody. For the first 3 months of 2026, order intake stands at a solid EUR 3.4 billion not fully comparable to the extraordinary record level we had in the first quarter 2025, that level included the 4 NCL Jumbo cruise ships, but nonetheless, significantly higher than the average Q1 order intake over the last 5 years.

As Pierroberto mentioned before, we also signed several major contracts in the first months of 2026, i.e., up to now for a value of over EUR 12 billion. and these are reflected in the soft backlog are still subject to financing and other typical terms and conditions of the sector. And of course, they will feed into the order book and backlog in the coming months.

Again, on the first quarter, the book-to-bill ratio stands at 1.6x, reflecting the sustained growth in Fincantieri's commercial pipeline, supported by strong demand across all core business segments. Shipbuilding order intake landed at EUR 3.2 billion with 2 AIDA cruise ships contracts becoming effective and Underwater, and Equipment, Systems and Infrastructure order intake increased by 24% and 62%, respectively, compared to the first quarter of 2025.

On Page 12. Our total backlog, reaches yet another all-time high at EUR 74.2 billion, increasing 17.4% compared to year-end 2025 and this is driven by strong growth in the soft backlog, thanks to the new contracts signed and solid order intake. In detail, backlog grew to EUR 42.7 billion from EUR 41.1 billion in the first quarter of 2025 and soft backlog increased to EUR 31.5 billion compared to EUR 22.1 billion as of the end of the first quarter of last year. We delivered 5 units from 5 different shipyards, 2 for cruise and 3 from offshore.

On financials on Page 13. Revenues reached EUR 2.1 billion in the first quarter of 2026, and this is compared to EUR 2.376 billion in the prior year period. Of course, the year-on-year comparison is skewed as Q1 2025 was particularly strong, benefiting from the order of the 2 PPAs for the Indonesian Navy that Pierroberto mentioned before. Excluding this effect, revenue in the first quarter of 2026 recorded an increase of 6% year-on-year.

In particular, Cruise revenues grew by almost 17%, driven by backlog execution, and the progress of construction programs already acquired. The year-on-year decrease in Defense is mainly due to the positive contribution from the sale of the 2 PPA that I mentioned before, this is in the first quarter of 2025, but it also reflects the impact on 2026 revenues of the redefinition of the Constellation program for the U.S. Navy announced in November 2025, which leads to a shift forward in revenues expected in the United States. Of course, those revenues are linked to the new contracts expected to be finalized during the year, including the order for 4 units under the Medium Landing Ship program you already saw first order being acquired by Fincantieri in the U.S. in the recent months.

Offshore revenues reached EUR 360 million, up by a little over 12% compared to the same period of 2025 and the underwater segment posted a very strong increase in revenues, up 43.3% year-on-year, driven by the consolidation of WASS Submarine Systems and of course, it's solid performance, and the accelerated advancement progress of the U212NFS submarine program for the Italian Navy.

Last but not least, Equipment, Systems and Infrastructure segment also recorded continued growth with revenues up almost 9% to EUR 309 million, mainly driven by the Mechatronics segment and the Infrastructure segment, respectively, 24.6% and 7.1%.

On Page 14, EBITDA, remarkable margin increased to 7.4% from 6.5% reported in the same period of the year before. And this, of course, more than compensates the effect of the Indonesian Navy order on the first quarter of 2025. In detail, shipbuilding EBITDA margin increased significantly to 7.5% versus 6.8% in the first quarter of 2025, mainly supported by the Cruise segment, and this is due to better pricing dynamics and efficiency initiatives and maximization of the operating leverage. Offshore and underwater EBITDA both increased reaching margins of 5% and 17.1%, respectively, showcasing the growth trajectory of both businesses.

The Equipment, Systems and Infrastructure segment delivered a strong contribution to the group's profitability with EBITDA rising by 40.2% and EBITDA margin reaching 6.4%, 1.5 percentage point higher than the 4.9% in the first quarter of 2025. Main drivers are a significant contribution from the electronics and digital products, plus 155%. The Infrastructure segment, plus 27% and a double-digit profitability in the Mechatronics segment at 10.7%. Deleveraging accelerating, thanks to cash generation on Page 15, as at March 31, 2026, as we said before, adjusted net debt strongly improved compared to the end of 2025, reaching EUR 771 million versus EUR 1.3 billion at the end of fiscal year 2025. This value includes noncurrent financial receivables as well as the effect of the capital increase of February 2026.

Excluding the effect of the capital increase adjusted net debt improved to EUR 1.3 billion, almost supported by cash generation and over the period. Leverage ratio improved to 1.1x compared to 1.9x recorded as of year-end. And of course, the 1.1x is 1.8x, excluding the effect of the capital increase. Net working capital is negative at EUR 705 million, slightly decreasing compared to the end of last year, where it was negative at EUR 634 million. We did increase in construction contracts and client advances, EUR 206 million, partially compensated by an increase in trade receivables and a decrease in trade payables.

With that, I will now hand the call back to Pierroberto for his concluding remarks.

Thank you, Giuseppe. Let me now summarize our key takeaways on Page 17. We reported solid financial performance in the first quarter of 2026, with a strong margin improvement driven by the positive contribution from all our business segments. Commercial performance marks a new milestone with a new record total backlog and new contracts signed, providing profound visibility beyond the next 10 years. Thus, securing a clear and structural operating leverage for the years to come.

Our strategic defense business best positions us to capitalize on an acceleration in demand driven by the current geopolitical scenario with the near-term opportunity pipeline of approximately EUR 5 billion expected in the coming months. The strong set of results achieved allowed us to raise our full year guidance reinforcing our commitment to the growth trajectory envisaged in the new 2026-2030 business plan.

Finally, the successful completion of the capital increase in February 2026 demonstrates strong market confidence while providing additional firepower to pursue our strategy of selective M&A.

With that, we are now open to take your questions.

[Operator Instructions] First question is from Antonio Gianfrancesco, Intermonte.

I have two. The first one, because looking at broader picture, the group today benefits from a very large total backlog, stronger execution in cruise, with margins providing particularly accretive even in a phase where the defense contribution is temporarily lower. But the point is -- my point is exactly on this because just coming back for a moment on the defense order pipeline? Because at the Capital Markets Day, you indicated around EUR 5 billion of potential order over 6 months. And now you are reiterating this target on upcoming months. So my impression is that visibility on some of these opportunities remain very high especially on domestic programs and U.S. I think the main variable is more related to timing than to the existence of the demand. So I was wondering how we should think about the risk that most of this order intake slips beyond the original 6-month window and whether, let's say, a delay in the award of contracts could represent a risk for the achievement of the 2028 plan targets.

The second question is on the offshore segment. We have seen a softer performance in first quarter in terms of order intake. So can you help us better understand how you see the outlook evolving from there, in particular, which geographies and end markets are you currently monitoring more closely for new opportunities. And what could drive a reacceleration of the ongoing business going forward?

On your first question, I'm sure that when we say 6 months, you understand that we are saying in the very short term, then you have to finalize contracts. There are a number of fulfillments. So I would be very, I would say, uncomfortable with someone that is counting the seconds, the days. And -- so on your first question, I believe it's a no-brainer. If we are saying that there are EUR 5 billion of discussions that are close to the finalization, it means that there are name and surnames that we have disclosed. As far as the Italian Navy is concerned, so we made explicit reference to the DDX, the Destroyer to the LSS, which are the logistics ships. We made disclosure on [indiscernible]. So all offers that are on the table and in the process of being, I would say, finalized. And again, only these three, if you know the metrics, and if you are knowledgeable about the short-term and long-term Ministry of Defense expenditure, you will know that it's not. There's no risk there. It's a matter of finalizing paperwork.

Again, then I don't want to cut a long story too short. Obviously, the relevant financing has to be there in order for the public administration to execute, but it's written in the public document here and there. The rest has to do with negotiations with foreign navies with respect to which, for obvious reasons, we are being as confidential as possible. Again, these kind of discussions are equally triggered by the availability and accessibility of SAFE, which is this big financial measure made available by the European Union. So again, also in that respect, everything is going, and so we don't have any special information to share, which means to deviate from the expectation of EUR 5 billion in the very short term.

So having said that, we believe that revenues, full year revenues for 2026 are solid. In fact, we have not only reiterated the guidance on revenues, but we have also a little bit fine-tuned upward. So again, the comparison with last year -- first quarter last year, is driven not only by Indonesia but by a peculiar contract being the sale of a ship with a specific accounting treatment being a sale of the ship. So it's, I would say, comparing 2 quarters that are not comparable in terms of the way revenues are recognized in a sale of an existing ship vis-a-vis revenues recognition according to the work in progress accounting mechanism.

So on the order side, we feel confident. On the revenue side, we feel confident. A little bit of color on offshore, which was your second question. The offshore market is a market in which there are multiple kind of ships that can subsidize each other. That is the world of the energy, which is divided into 2 legs, the wind farms and the oil and gas. And what we experience regularly is that if by chance the wind is slowing a little bit down, the oil and gas will compensate a little bit up because it's very clear that the world needs energy. Either you produce electrons or you produce energy from hydrocarbons, no way to stay where you are. And so it is impellent to grow.

So sometimes one leg is working more. The other time, the other leg is working more. Yes, today, investment decisions in energy matters is inevitably hindered or I would say, affected or influenced by the war, the conflict, the energy, I would say, sense of urgence. But on top of it, it is very important to say that there are other kind of specialized vessels in which Vard is very versatile. So on top of addressing as usual, wind and oil and gas at sea, wind and oil and gas infrastructure at sea, they are addressing also cable-layers. A lot of special vessels for underwater research which is something that is remarkably interesting more and more on top of icebreakers and on top of positioning Vard on the specific demand of Norwegian Navy, which is opening a new cycle made of relevant investment plan for defense on top of the large combatant ships, there are many, I would say, medium and smaller naval ships. And also, in that respect, Vard is exposed to a very large and very interesting opportunity.

So the general comment on our offshore business is that the combination of these multiple specialized vessels, including, for example, ships for fisheries, which is another kind of ship in which Vard is very active in these days. So the portfolio of products and the overall demand for this kind of critical ships is there and Vard is very strong, very well referenced and very well positioned, all in all.

Next question is from Marco Vitale, Mediobanca.

Couple from my side. The first one is on still on the defense business pipeline. Looking at the, say, medium term, we noted that when you elaborated your financial targets for 2030, still there was the belief that your domestic market that Italy was supposed to increase defense spending to, say, 2.8% of GDP by 2028. And sorry, 2.5% by 2028, while now we are witnessing still unclear messages from current government on whether this will happen or not. So the question is, looking at the, say, domestic business, is there something that there could be some potential risk conceived for your medium-term pipeline coming from a lower or slower ramp-up in defense expenditure from the Italian government. That was the first question.

Second one is on the, say, Cruise business. We noted a strong acceleration in profitability. The key question is whether this pace of margin expansion is something that you see sustainable to also going forward, specifically for the cruise business, or whether this was somewhat aided by finding some, say, favorable timing for specific milestones or other one-off aspects?

Thank you very much. Let me start from the second question and then get back to the first. The answer is that the improvement in margins in the cruise is the result of a series of actions and, I would say, interventions, organizational measures that we have constantly and consistently pursued over the last 3, 4 years. So it is not the case. It is not a one-off, it is there to stay because it is the result of a process of reinforcement, which is on multiple domains and which is remarkably, I would say "invasive." So I don't see any reason why this is not projected and projectable for the way forward.

In particular, if you consider that this dynamic is on the cost side, so on the operations. Then there is also the dynamic on the revenue side, meaning on the momentum we are experiencing with respect to the prices to the set of prices. So the combination of the 2 effects. So optimization on cost and enhancement of price revenues, the combination of the 2 effects make us very positive for the future of cruise. So we want to get out of that image, whereby cruise is not satisfactory. And it needs the support of defense in order to become satisfactory. So we don't like the image of that -- this kind of image for the profitability of Fincantieri.

Having said that, we want to overweight defense revenues in our blend. This is the core of the strategy. So we are very happy that the engine of Cruise is working very well. And this is from the very beginning, our primary target, but the big piece of news is to see defense revenues gaining traction and gaining pace. So this is what we are working for. This is the big job we have been doing to position the company everywhere in the world. And this is what we are eager to show up and demonstrate first of all, to financial stakeholders. Your question on Italian budget for defense, it's understandable. Let me say that programs -- so investment programs of the armed forces are not something that can go zig-zag. So when you launch a program, you launch a program. So it's very difficult to imagine an armed force that is preparing everything and then not finalized and pursue.

So it's a matter of fact. I believe that the contingent situation is not expected to affect the ability to transform this long time prepared engineered new ships for the Navy into real water. So that's my point of view. Again, I think that more in general, Navy expenditure in Italy is the one that is converting more into local value chain, supply chain and local GDP. So when we build the ship, the -- I would say, 80% at least of this order is translated into supply chain benefits and value chain benefits for our nation. So that's why I strongly believe that this feature of the Navy make the comparison with similar expenditure very, very, very advantageous for us. So we will continue to address those opportunities, and we're looking forward to sharing with you the achieved target.

Next question is from Emanuele Gallazzi, Equita.

I have three questions. The first one, clearly, you provided a lot of details, useful details on the naval business. Just looking at the underwater segment. Can you give us a sense of the current commercial pipeline for this division? The second one is on the cost side. If you can just touch on what you are experiencing on the cost side in the current environment, I'm clearly referring to the steel and logistic. And the third one, you mentioned the opportunity related to the Spectre project in the U.S. I was wondering if you see other, let's call them partnerships for advanced unmanned vessels.

Thank you for your question. So commercial pipeline on underwater. The underwater business is made of, I would say, three different legs. One leg is the traditional underwater submarines. So traditional underwater vessels. The demand for this is very evident. It's everywhere. We are again, pursuing those opportunities in multiple geographies. I think this in itself is a very good market to be addressed and very good, I would say, engine for the division.

And there is a second engine, which is the one related to innovative vessels, such as smaller submarines and/or drones of 9 meters and 3 meters which is something we are very active. We have validated, as you may know, underwater drones with an integrated solution, including acoustic barriers and command and control systems, I would say, containerized command and control systems. Then we continue to work with the Navy and with international navies for those known conventional solutions. So large AUV and smaller submarines. So submarines in the region of 800 tons vis-a-vis the traditional one of 1,600. We experienced a lot of interest for this lighter kind of vessels, and we are very focused on that.

Then there is a third leg, which is the lag of the commercial world. And in the commercial world, we see a lot of opportunity in the civilian commercial space, we are pursuing with Prysmian, with the alliance with Prysmian that led to the joint acquisition of a very, I would say, strong and well referenced company for the underwater telecom equipment as well as partnership with Sparkle and partnership with other key players in the space of the underwater. I think also this third leg is expected to gain pace. We see a lot of interest in the market. Basically, we are collaborating with everyone. We would like to show some very good achievement and order intake also in this space soon. So this is the update on the commercial pipeline in the underwater again, ranging from submarines to, I would say, innovative and to nonmilitary solutions. Then your question was on the cost side.

Yes.

Yes. On the cost side, we are not experiencing negative consequences on us, simply because we have, first of all, in place very, I would say, successful hedging policies and hedging contracts, for example, for steel, for gasoline, which is something we consume when we go for tests, sea tests, sea trials. And basically also on the interest rates, we can be, I would say, fully shielded from the outside pressure. So let me say, in the short term, we don't experience issues, neither logistic bottlenecks.

On the logistics side, please consider that the vast majority of our procurement is in a regional value chain. So it's in the short distance from our shipyard and inside Italy apart from big components such engines that are produced elsewhere, but for sure, not the Middle East or not in region where we need Middle East. So let me say, as far as the short term is concerned, we don't see big issues for Fincantieri due to cost inflation and/or logistic bottlenecks.

On Spectre, so on our activity on surface rows. Let me say that we have a lot of activity going on, obviously. So surface drones are the primary instruments for increasing the projection and the deployment of naval power and in particular, also in integration with existing ships, existing platforms.

So we are very active at any level in terms of partnership in the surface drones. Obviously, Europe and U.S. are very different in the sense that in Europe, what we call surface drones are basically smaller. So the doctrine by this side of the Atlantic is to have them for patrolling, for intelligence. The trend of today is to make them "offensive" so properly armed. By the other side of the ocean, by the other side of the Atlantic, there is even a more aggressive doctrine according to which they believe in very large drones. So they are thinking of drones that can be missile launchers.

U.S. vision for the future is to have many, many, many platforms as unmanned as possible, able to be equipped with VLS, which are the launchers and to represent a kind of big deterrent in case of deploying such a fleet, basically many, many, many drones of even very long size. They are thinking of drones of 100, 120 meters, let's say, 2,000, 3,000 displacing tons. So something that in Europe, we are not yet accustomed to elaborate. Fincantieri enjoys the possibility to play in those 2 different theaters to get accustomed with those different theories and doctrines. So that's why we are so focused because we are also more than happy to cross-fertilize the two shores of the Atlantic in order to make available the best.

Next question is from Gabriele Gambarova, Intesa Sanpaolo.

Yes. I've got three. The first one is on the fiscal year '26 guidance for net profit, EUR 140 million, EUR 180 million. I was wondering if this target refers to the reported, let's say, net profit, so after exceptionals or is adjusted, so it's before? And if I may, I mean, the range is pretty wide. So I was wondering what can make the difference between the EUR 140 million and EUR 180 million, if there is any particular moving part?

The second question is on naval. I saw that the first quarter was pretty weak in terms of top line estimated a minus 29% year-over-year considering, let's say, the one-off in Q1 2025. I was wondering if is it possible to understand when there will be, let's say, a recovery, thanks to the new programs you got, I mean, should we see further slowdown in the coming quarters? Or is it possible that maybe from Q2, Q3 or Q4, that will be flattening and then a recovery. And the third one is on underwater. In this case, the performance was exceptionally strong, plus 43% in terms of top line. I was wondering, I mean, you said that specifically submarines recovered very strongly.

Even here, I was wondering what could happen in the coming quarters because it seems to me that, let's say, the guidance for 2026 in terms of submarines was pretty, let's say, was high single-digit growth. And instead, I was wondering if we could see something more than this?

Let me answer then on the below EBITDA dynamics, I will leave the floor to Giuseppe. But on your -- on the revenues on 2026, the fact that we have reiterated the guidance should be the answer to your question. So otherwise, would have been, I would say, at least awkward, if not [indiscernible], to increase -- to confirm and increase the guidance. So again, the beauty of, when you work in our business, the beauty when we work with projects is that projects are driven by the production schedule. So revenues are not what you sell, our revenues are what you produce. So typically, there could be issues, there could be, obviously, some issues along the way. But typically, when you are in the current year, you tend to know what's your production curve.

And so what is your revenue recognition mechanism for the months to come. So if your answer is that if we will increase revenues on a yearly basis, and so go beyond the current phasing experienced in the first quarter. The answer is absolutely yes. And this is the reason why we have reiterated the guidance and even a little bit uplift. Then on the below EBITDA mechanism and dynamics. I will leave the floor to Giuseppe and then get back.

Yes. So on the first part of your question, it refers to net result after extraordinary nonrecurring items first. And of course, the range is linked to the, let me say, realization of some upsides that we expect throughout the year. Let me put it this way. And you also asked about naval revenues recovery, I guess Pierroberto, if you...

Yes, it was on the phasing of the results when we could see.

Also in the underwater again, revenues are consequent to the production curves. So no way to zig zag. It is the trajectory of our ongoing projects, and we don't see issues why the current trajectory is not expectable for the future to come.

Next question is from Lorenzo Di Patrizi, Bank of America.

So first on -- so on the guidance raise, can you give just more details on what prompted this? Is there a division program, in particular to call out. Then on your leverage ratio, so it has improved significantly from the full year what drove this improvement? And what does this mean for the trajectory for the full year and to 2030. Am I correct that the 1x target in 2030 is still excluding the capital increase?

Yes. Let's start with the second question. Yes, you are correct. The guidance we gave on leverage ratios as of 2030 excludes capital increase, the proceeds of the capital increase as we gave those targets before the ABB and of course, without factoring the ABB in the targets. It goes the same for this year. I mean, withstanding the fact that we report, of course, net debt levels, including the proceeds -- net of the proceeds of the capital increase, we are still guiding forward to without the proceeds of the capital increase. That is the, let me say, communication approach that we have chosen.

Okay. On your first question on any detail on what prompted the guidance? Well, but let me put it this way from -- we definitely upgraded the guidance with respect to revenues and of course, we qualified quantitatively the guidance on net debt increasing it. As you remember, we gave a qualitative guidance on -- sorry, on net result levels. We simply said that net result of 2026 was going to be higher than 2025. Of course, now we are saying what range, in what range this result will fall and it will be definitely higher than what we expected. This is the sense of what we said.

Next question is from Sriram Krishnan, Deutsche Bank.

So I have two or three quick questions, if I may, please. So the first one is on the U.S. With regards to the LSM contract, I believe that the manager for that particular program is still not appointed. But just trying to understand, post the appointment of that manager, is that purely from an operational management point of view? Or is the manager has the ability to appoint more shipyards for manufacturing these 35 ships? That's the first question.

The second one is on Norway. It's a pretty simple one. So I believe, I think, in the last month or so, there was -- the ship design contract was awarded by Norway. Just trying to understand from the time line perspective, when do we expect the ship design to be frozen and when the actual construction contract to fruit -- come to fruition, is it 2027, 2028? And then finally, on the M&A in underwater. It's clear that you are focusing on underwater. Just trying to understand, are you focusing more from a technical capability, which boosts you the technical capability or more from an expansion of market access point of view?

So on your first question, the LSM in United States. I would say that the good news is that the Navy, the procurement office decided to move forward on assigning Marinette, Fincantieri USA with a new class of ship. They have indicated, which is the overall number of ships they would like to build, which is more than 35 and that they have indicated 2 shipyards as the 2 shipyards to be specialized on these kind of ships, that they have clarified the first 4 were assigned to Fincantieri USA and that on these 4 order -- on this order for 4, they wanted to jump start with the award of initial contract for ordering the long lead items.

So those procurement items, which need a long time to be fabricated and produced. So this is the news flow and this is very good for Marinette because this is the living evidence that the agreement achieved in end of November 2025 was strong and solid. Your question is either they want to use more shipyards on top of Bollinger and Fincantieri. I have no specific information to add to what was public I'm not aware of something like this. I believe that we will be very happy as a beginning to build the first 4. And we believe that good performance is calling for good business and additional orders. So let me say, I don't have any specific extra information or official information received in that respect. And what I believe is that let's start well because if we start well the rest will be natural.

On your second question, if I understand correctly, you would like to have some color about Norway, the defense program in Norway. Basically, the status is the following: there is a large budget to be managed. And this large budget is expected to be managed in a way that can compensate also local shipbuilding for not having been extensively involved in the frigate program. So at the end of the day, the frigate program was assigned, was awarded to U.K. along with an agreement, a G2G, government-to-government agreement to military -- to provide military support to Norway in case of Russian invasion. So it was more a geopolitical deal than an industrial deal.

But as a result, as a second wave, our understanding is that also in Norway, there is interest to use this naval expenditure in order to revitalize the local shipbuilding and the local value chain at large. In the last months, there were the initial steps in terms of identifying the design firm. So it's more on the design phase. Obviously, we are more interested in being the constructor. So we are there for the large award that not necessarily interested in the small one in terms of design package. Also in order to avoid any possible conflict of interest because from time to time, if you are the designer, you can be somehow penalized to be the builder. So we have very good experience in design of Coast Guard ships, for example, and we in Norway, already built over there. And on top of it, we can also contribute some very good expertise from Italy, by the way. But again, the way we are participating to this program is to be there for the large contract rather than from the design one.

On your third question is about underwater. If the M&A we are looking at is more characterized by technologies or characterized by market share, I would say both. I would say both. So we believe that we want to create a positioning that is technology-driven, and technologies will be, for sure, a key recipe a key ingredient in this recipe, but we want also to accelerate the adoption of new technologies and the business model. So we are looking at a number of transactions and those shares that will be positive in either ways.

Next question is from Michele Baldelli, BNP Paribas.

I have a couple of questions. The first one relates to the M&A given your leverage has improved materially. If you can remind us what are the targets? What is the likelihood in the short term to see any of those and what kind of, let's say, products or segments you are targeting that could be interesting for you.

The second question relates then to the last answer that you gave. If you can remind us about this pipeline of projects in Europe in the naval part of your business. If any of this, let's say, potential award has gone? Or if new, let's say, tenders are now visible. And if you can, let's say, give us this more color?

Thank you very much on your second question. We are when we mentioned in the, I would say, short-term targets in Europe, we were making reference to opportunities that we've been following and pursuing since quite a long time. So in our business, there is no way to be hunter. It's a business for farmers, so you need to cultivate. And then you have to cultivate a lot in order to have your -- with the right level of probability to have your order intake achieved. So no way to be fast track are all opportunities that we've been pursuing. Unfortunately, we prefer not to disclose for a number of reasons, but are there and there and I would say also on the market.

On your second question is more color on the M&A opportunities in the underwater if I understand correctly. And in general, again, we try to be as colorful as possible when saying that we are looking at acquisitions of technologies, so on the vertical. And also acquisition of key components of the product strategy we have in mind, business development strategy we have in mind. So we have envisaged a make-or-buy strategy, which is very clear, which means that there are certain technological bricks that we want to internalize, i.e., we want to own. And there are other bricks that we want to have access to by means of alliances, commercial alliances. So depending on this make or buy strategy that we have presented in the Underwater Day last year, we are constantly and consistently pursuing a number of opportunity in that respect. Again, another possible color is that we are looking at naval, but we are not obsessed by naval. So you know our idea of underwater is that it's an underwater economy that, yes, can leverage on defense for for validation, but then has to be opened also to adjacent applications.

So civilian clients, such as the energy sector, the telecom sector, the mining sector and the rest of the adjacencies in the underwater. So we don't want to disclose that much because it would jeopardize the success of these negotiations. But we will be more than happy and I would say in the short term to get back to you with the right level of disclosure.

Next question is from Andrea Belloli, Banca Akros.

Just one follow-up from my side. And sorry for coming back from cost inflation. I understood that in the short term, inflation is not an issue for you, but I was wondering how you cover or how are you covered from potential cost fluctuation in the long term now that you have announced contract with deliveries up to 2039.

Well, Giuseppe speaking here. As we book revenues and margin with the cost-to-cost accounting principle, if there are long term -- I mean if there are deteriorations in future costs, we should have to factor them in the whole life products -- of the projects and therefore, on the quarterly financial statements. When we say that we are not -- as of now, we are not experiencing deteriorations from costs, especially in steel and commodities, it means that we are covered beyond the or timeframe that extends to 2026.

I'll give you an example. As Pierroberto mentioned before, we buy gas oil for sea trials for ships. And we buy it and hedge it i.e., whenever we have a cruise contract signed and effective, we hedge right away the needs that we have for gas oil, even if this gas oil will be purchased 4 years down the road. Am I clear enough?

Gentlemen, there are no more questions registered at this time.

Thank you. Thank you, everyone. Thank you for attending.

Thank you, bye.

Ladies and gentlemen, thank you for joining. The conference is now over. You may disconnect your telephones.

Good afternoon. This is the chorus call conference operator. Welcome, and thank you for joining the Fincantieri Full Year 2025 Results Conference Call. [Operator Instructions] At this time, I would like to turn the conference over to Mr. Folgiero, Chief Executive Officer and Managing Director. Please go ahead, sir.

Good afternoon, ladies and gentlemen, and welcome to Fincantieri's Full Year 2025 Results Call. We are proud to share with you the outstanding results achieved in 2025, which highlights Fincantieri's ability to capture the opportunities offered by the favorable macro trends in our markets, while maintaining financial discipline and ensuring flawless execution of our backlog.

In 2025, we delivered tangible progress in the implementation of our strategy, exceeding expectations and creating significant value for all our stakeholders. This provides an exceptionally strong foundation on which to build the group's growth trajectory set out in the new 2026-2030 business plan.

We achieved a double-digit revenue and EBITDA growth a strong margin expansion supported by continued efficiency initiatives and a profitable business mix, leading to the highest net profit in our industry at EUR 117 million, more than 4x higher than 2024.

We also recorded a new all-time high in both order intake and total backlog, confirming the strength of our commercial positioning and remarkable growth potential.

On the financial front, the group continues to make rapid progress in its deleveraging path with net debt-to-EBITDA up to 2.7x ahead of 2025 guidance provided last February at the Capital Markets Day.

And there is more to come with new cruise and underwater orders already secured in early 2026 and a robust defense pipeline expected to translate into major contracts in the coming months.

We also recently completed a rights issue of EUR 500 million via an accelerated book building process that allows us to further enhance our financial flexibility and provides optionality to support our selective inorganic growth strategy, also through M&A opportunities as well as to bring forward our deleveraging targets.

It is worth noting that this capital increase was approved by the EGM in June 2024, in conjunction with the approval of the EUR 400 million rights issue completed in July 2024. And it's also to be noted that the free float as a result is now up 36%.

Let's move to Page 4 for a summary of the financial and commercial highlights of the year. In 2025, we exceeded all targets set out in our guidance, further revised at the Capital Market Day, demonstrating the group's ability to deliver on its commitments and consistently outperform expectations.

Revenues increased by 13% year-on-year, reaching approximately EUR 9.2 billion, supported by strong market tailwinds in the Shipbuilding segment and by the rapid expansion of the Underwater business.

EBITDA margin grew significantly to 7.4% vis-a-vis 6.3% at the end of 2024. This increase is the result of the structural evolution of cruise into a profitable and cash-generative business and by the increasing contribution of defense and Underwater to revenue mix.

The net debt EBITDA ratio improved to 2.7x, well ahead of the guidance provided at the end of 2024 and better than the revised guidance provided in February 2026.

Finally, net profit reached the record level of EUR 117 million, demonstrating the remarkable turnaround achieved over the past three years and confirming the structural growth and profitability of the group.

These results confirm the remarkable turnaround achieved by the group over the past three years, okay? Our revenues between 2022 and 2025 grew with a compounded average growth rate of 7.3% while our EBITDA increased by 3x over the same period. Our net income is now structurally positive. Lastly, our deleveraging process has been impressive, reaching 2.7x with further significant reduction projected going forward.

Turning to Page 6. We delivered an outstanding commercial performance in 2025 with a record high order intake at EUR 20.3 billion and the book-to-bill equal to 2.2x compared to 1.9x in 2024, underscoring the strong demand in our core businesses, especially in building which posted an impressive 42% year-on-year growth.

As a result, total backlog reached an all-time high of EUR 63.2 billion, equivalent to approximately 6.9 years of work based on full year 2025 revenues, ensuring strong visibility on the future growth.

Let's now move to Page 7 to have a look at our order book. 2025 was also marked by the flawless backlog execution with 24 units delivered. We have a full slate of deliveries scheduled through 2036, with visibility further extended to 2037 thanks to the already mentioned order by Norwegian Cruise Line secured in early 2026.

As of year-end 2025, our backlog includes 97 units, 36 in cruise, with the first two jumbo ships scheduled for delivery in 2029 and 2030, 20 in defense, five in underwater and 36 in offshore and specialized vessels, providing solid and long-term visibility for the years ahead.

Let's move to Page 8 for an overview of the commercial opportunities ahead. The current macro trend offered significant growth opportunities in all of our business segments, which are actively monitoring as we speak. Of more than 500 commercial opportunities, we have looked at, we have selected a number of these to pursue through our participation in tender processes for an amount of approximately EUR 32.5 billion.

In the past months, we have already successfully secured a number of orders, including important orders from NCL, Crystal, Viking and TUI in Cruise, orders in naval from the Italian Navy and ordering offshores for four vessels from Ocean Infinity and the largest order ever for WASS, for Torpedoes from the Saudi Navy.

As I mentioned in our Capital Market Day, we also see short-term opportunities in naval in the coming months for approximately EUR 5 billion from the Italian Navy, the DDX, EPC call 2, LSS3 from export countries for frigates, from service contracts for the Middle East countries and from new programs from the United States Navy.

Notably, last month, the United States Navy issued a request for proposal for a vessel construction manager to oversee the construction of the new medium lending ship class, identified Fincantieri Marinette our USA subsidiary as one of the two shipyards to be awarded for the construction with initial allocation of four vessels.

Moving to our outlook for 2026, we confirm the guidance provided during the Capital Market Day with revenues in the range of EUR 9.2 billion to EUR 9.3 billion, EBITDA of approximately EUR 700 million with an EBITDA margin of around 7.5%.

Adjusted net debt to EBITDA ratio at approximately 2x, which equates to 1.3x, including the capital increase completed in February 2026. Finally, net profit is expected to be higher than in 2025.

Turning on Slide 10. Let me provide some color on the recent capital increase via ABB we successfully completed in February. As we communicated, the EUR 500 million capital increase is intended to further enhance our financial flexibility and provides optionality to support our selective inorganic growth strategy. Also through M&A opportunities, in particular in relation to unconventional underwater solution, where we see significant opportunities to expand our position. We are looking at the selective number of potential targets, which we will update you on the coming months. Now I will hand over the call to Giuseppe, who will discuss 2025 financial results in more details. Please Giuseppe.

Thank you, Pierroberto. Let's move on, on Page 11, where we can comment order intake. Again, like we said before, EUR 20.3 billion, all-time high with a growth of over 32%. And a book-to-bill ratio well above revenues, 2.2x. This reflects the sustained growth in Fincantieri commercial pipeline that is supported across all segments by strong demand.

Shipbuilding among these segments continued to deliver strong order intake reaching almost EUR 18 billion, up 42% compared to last year. Of course, these very strong order intake brings another -- a record total backlog at $63.2 billion, and I'm moving on Page 13, that covers almost 7x 2025 revenues and these results confirms the impressive growth trend already seen in 2024 and further increases long-term visibility of the business.

Backlog grew by almost 33% to EUR 41.1 billion, up from EUR 31 billion in 2024. And we also have a very strong soft backlog that increased to EUR 22.1 billion compared to EUR 20.2 billion of 2024. We delivered 24 units from 11 different shipyards, 5 for cruise, 7 for defense and 12 for offshore.

On Page 14, financials. Revenues reached almost EUR 9.2 billion, up 13.1% year-on-year with a strong contribution from shipbuilding that posted a 15.1% growth compared to 2024 within shipbuilding. Cruise revenues grew by 12.5% year-on-year. With production levels characterized by capacity saturation on the current shipyard footprint and reflecting the significant backlog acquired.

Also, the Defense segment recorded a 20.7% increase year-on-year, partly driven by the finalization on the first quarter of 2025 of the contract for the sale of two PPA units to the Indonesian Ministry of Defense. Those two units were both delivered in the second half of the year.

The underwater segment posted as well a sharp increase in revenues, up 88.2% and this comes from the consolidation of WASS submarine systems from January 2025, but also from the very strong performance of Remazel engineering that had a revenue growth of 25% year-on-year. And together with the accelerated advancement of the U212NFS submarine program for the Italian Navy.

As with the offshore and specialized vessels and the Equipment Systems & Infrastructure segments, they both were substantially in line with 2024.

On the following page, EBITDA. Well, at the group level rose sharply by almost 34% year-on-year to EUR 681 million with the margin up to 7.4% from 6.3% reported in 2024. Shipbuilding EBITDA grew by 29.3% to EUR 451 million with an EBITDA margin of 6.8%, up 0.8 percentage points compared to last year, this comes thanks to very favorable pricing dynamics. And improving efficiency in the cruise business. As a whole, the cruise business has improved also in terms of net working capital, thanks to the better payment terms. And of course, on top of it, there is the increasing contribution of the Defense business.

The underwater, as expected, I would say, delivered an EBITDA of EUR 117 million with the margin of 17.6%. And this confirms the sector's premium profitability that we discussed on the Underwater Day in May. The offshore specialized vessel EBITDA reached EUR 72 million with an EBITDA margin growing to 5.3%, consolidating its positive path to margin improvement.

The Equipment, Systems and Infrastructure segment delivered a strong contribution to the group's profitability. With EBITDA rising by 33% and EBITDA margin reaching 8.2% versus 6.1% in 2024. Drivers of this growth are, in particular, a significant contribution by the mechatronic business and higher margins in the Electronics and Digital Product cluster. And of course, last, but not least, the infrastructure cluster improved as well.

On the following page, net profit for a record level, EUR 117 million the highest ever recorded by Fincantieri and over 4x the results we reached in 2024. This record result reflects the material growth in EBITDA partially offset by the increase in D&A, but this is mainly driven by the purchase price allocation following the acquisition of WASS Submarine Systems completed in Q1 2025. Of course, the effect will diminish throughout the years on this.

EBIT increased to EUR 368 million from EUR 246 million in 2024. And last, but not least, thanks to our very strong financial discipline. The group benefited from a reduction in financial expenses. And this, of course, comes partly from the lower average debt recorded during the year. And also a positive contribution was provided by the decrease in the asbestos-related litigation cost, which declined for the third consecutive year.

On the following page, the leverage impact and debt maturity profile at the end of 2025, adjusted net debt amounts to roughly EUR 1.3 billion. And of course, in order to ensure full comparability with 2024, these figures -- this figure includes noncurrent financial receivables, notably the loan granted to Virgin Cruises previously included in 2024 net debt and reclassified as noncurrent following the maturity extension agreed in December. Excluding these current -- these noncurrent financial receivable, net debt stands at EUR 1.8 billion roughly.

Leverage ratio, net debt over EBITDA improved to 2.7x significantly lower than the 3.3x recorded as of year-end 2024 and further improving on the 2025 guidance provided in the Capital Markets Day, which was 2.8x. The leverage ratio, including noncurrent financial receivables stands at 1.9x EBITDA.

As we have previously mentioned, we have generated in 2025 significant cash flow from operations, which, excluding the cash outflow for the purchase of WASS in early 2025, translates into a free cash flow generation of more than EUR 250 million.

We have a very well distributed debt maturity profile with no significant long-term debt maturities until 2028, and we can rely on a solid capital structure with no covenants roughly 90% fixed rate liabilities, this is obtained through derivatives.

Furthermore, the senior unsecured Schuldschein placement for EUR 395 million completed in July 2025, contributed to extending our maturity profile and reducing our average interest rate. After that, I will now hand the call back to Pierroberto for his closing remarks. Thank you.

Thank you, Giuseppe. Let me now summarize our key takeaways on Page 18. During 2025, we have delivered record commercial and financial results with net profit, order intake and total backlog reaching an all-time high. These results provide a strong foundation for the years ahead in the execution of our 2026-2030 business plan.

Margins further improved year-on-year, thanks to the structural evolution of Cruise into a profitable and cash-generative business and to the higher contribution of Defense and Underwater to the revenue mix. We benefit from an impressive backlog visibility further extended to 2037. This supports our margin profile through working capital optimization, capacity saturation and improved procurement efficiency.

The current global geopolitical environment offers substantial growth in defense, which we expect to translate into new significant orders in the coming months. We are consolidating our position as the leading orchestrator in the underwater domain, expanding both our product offering and business development capabilities also through targeted acquisitions and strategic partnerships. The successful completion of the capital increase last February demonstrates strong market confidence, while providing additional financial flexibility and optionality to pursue the selective M&A strategy.

We are only at the beginning of a secular growth trends, and we are ready to capture this opportunity. With that, we are now open to take your questions.

[Operator Instructions] The first question is from Antonio Gianfrancesco of Intermonte.

I have two. The first one is on the year-to-date Cruise orders from Norwegian and Viking. Could you give us some indications on the margin profile of these new contracts compared to the current backlog? And more broadly, even on Cruise business.

At Capital Markets Day in February, you indicated the profitability for the Shipbuilding division at 7% for 2026. Could you give us an indication about the evolution of the profitability in the Cruise segment for the coming years?

The second one is on the recently announced memorandum of understanding with Navantia on European Patrol Corvette program. Could you please help us to better understand how you see this translating into actual order intake. And in particular, I was wondering if you consider this memorandum of understanding as one of the key building block behind the EUR 5 billion defense pipeline in six months, you indicated at the Capital Markets Day.

Thank you for your questions. Cruise orders, NCL and Viking, we are not accustomed to disclose precise margins. We would rather prefer to let you appreciate what is behind this pickup in the percentage margin in this profitability.

So basically, as we have been saying and doing and pursuing the Cruise business is going in the direction of saturation, saturation, meaning perfect "absorption of fixed cost" on the one hand, on the other hand, long-term visibility and backlog provides for long-term partnership with supply chain and vendors. So we can achieve, I would say, optimization in the terms and condition pricing, for example, of what we can achieve from supply chain.

So the more we go in that direction, the more we see a reinforcement of profitability in the cruise, which is also benefiting from an additional dynamics on the revenue side on the pricing side. So on the cost side, saturation and procurement optimization. On the revenue side, there are positive developments in terms of pricing.

So the scarcity effect is allowing us to increase our bargaining power with ship owners and somehow improve our negotiate position.

Let me also add that there is a third dynamic in Cruise, which is not again related to the cost, which is not related to the revenues, but it's related to the risk profile. So the beauty of this long queue of order intake has to do with the fact that our not prototype ships but are repetitive ships. So many of the latest announcements, many of the latest awards are repetitive of an existing ship repetitive version of an existing ship, which is a terrific sorts of derisking. And conversely, it increases the possibility to convert contingencies accrued into extra margins at the right moment.

So there is a series of concurrent effects that are driving our expectation of Cruise better and better. Let me add the fourth information which has to do with terms and conditions, payment terms and conditions. So we are also succeeding in improving to the maximum possible extent payment conditions in the direction of improving the working capital dynamics accordingly.

Which dynamics is, as you may know, already improved by the stabilization of volumes, which is the prerequisite in order not to absorb working capital.

So no precise answer. Sorry for that. For commercial regions, for strategic reasons, but as many site information as possible in order for you to appreciate what is behind this enhancement in profitability.

Similarly, we believe that the Cruise for the years to come, which was your second question, will continue to improve margins. So the multiple engines I was describing before are expected to gain pace, gain traction, change gear and give us more and more satisfaction in the years to come. So we are definitely convinced that this, I would say, environment is truly healthy for Fincantieri Cruise division.

On your second question about Spain about EPC about Navantia, I think it's a very important step, it is not an MOU only. It is beginning of a new, I would say phase in the European cooperation, the EPC program, which is a Corvette is in the process of moving to the second phase, which is the second call from EDF, from European Defense Fund, which is the relevant entity that is supporting with specific grants the development of this European Corvette.

Italy and Spain and France are already there. Other nations are expressing interest namely Romania, namely Greece. So it is expected to be, let me say, kind of higher WASS of the sea, which will be remarkably powerful for European demand, but at the right moment also for exports out of Europe.

So it's a way to align requirements among different navies with the aim of optimizing costs, the absorption of nonrecurring costs and creating an interchangeable interoperable platform that could be very competitive also at export level.

Your question is if the ship is going to be ordered tomorrow morning, which is not the case because the EPC program is going from the initial engineering to the engineering for construction step. What is very important is that all the nations are expected or the founding nations, namely Italy, Spain and France, are expected to soon express their commitment to order their number of ships to this new entity.

So very soon, we are going to move this platform from a paperwork to a construction exercise, with commitments, which, by definition, will be for many units with commitments coming from the founders, from the founding nations. I think that's it.

The next question is from Marco Vitale of Mediobanca.

The first one is on the outlook. If you would provide us some source to say indications in terms of what you expect by divisions. We noted that you say, sales target implies a flattish revenue trend. And I was wondering if you could add some few details on what are the key, say, underlying dynamics across business lines for year 2026 outlook.

The next question on the, say, new U.S. program, the LSM that you mentioning, if you could do, we had read some, say, few articles. If you could add some say, details on the potential timing in terms of both order collection and also P&L impact that you expect from the new program.

Last question is about, say, more general in terms of supply chain and discussion with the main cruise operator. We noted that the current, say, rise in geopolitical conflicts are also triggering as a side effect, lower tourist volumes for Cruises. I was wondering if -- I mean, if you share any insight in terms of the discussion you had with the main cruise operators could reassure your long-term business pipeline that you have with them?

First question about 2026 outlook. Our business is very beautiful because it depends on the backlog. So 2026 revenues are not going to be disclosed by Fincantieri but will be self-disclosed by the deployment of the backlog existing at the end of 2025. So it's -- that's the beauty of being a project-driven company.

So with respect to 2026, we have the production curves coming from the backlog we have already secured. And 2026 will be the year in which in terms of expectations, we expect a "kick in" of the defense order intake, which we experienced in 2025, as we experienced in 2025, it's a process of finalization and materialization, which is a little bit bureaucratic, but it is there, it is there. So that's what we -- that's why we expect 2026 to be so visible in terms of order intake. And obviously, it will become revenues accordingly as you deploy a few, I would say, project backlog for the future.

So there's nothing weird. There is nothing unclear. It is, I would say, very visible and very -- it's the schedule. It's a schedule of production. And again, 2026 will be, at the same time, very interesting for the rest of the profit and loss. So I believe is already clear that our percentage margin is in the process of improving and also the net result as we have already appreciated 2025 versus 2024, our net profit is showing signs of, I would say, vitality. So I wouldn't call it flattish, revenues, my point, revenue is vanity. It's much more important that you look at what is happening at margins what is happening at the bottom line. And at the same time, what is happening in terms of order intake, which is the most interesting part of my answer.

Moving to the geopolitical part of your question. Yes, we are aware that when you talk -- when you discuss, when you elaborate, about tourism, the concept of war, the concept of instability is, I would say, typical case of concern, but never happened. So people continue to travel obviously, not exactly in the overheated place. So obviously, if you have a resort in an overheated place. It is not going to be fully-booked, but the tourism can somehow adjust, I would say, trajectory, itinerary in a way that is smart enough to find beautiful places to go and cruise. So that's my overall elaboration about your point.

Practically, we are not experiencing any negative feeling from the side of ship owners. Conversely, we continue to see a lot of energy, a lot of interest in occupying future slots for the sake of a long-term growth.

Let me also add that we are securing orders in the Cruise business, which is the "Touristic" business all the way to 2037. So we strongly believe that from that time on the situation will be stabilized.

U.S. On U.S., we received as the rest of the market very positively. The announcement of the U.S. Navy procurement with respect to the expected awards of the LSM series of ships to Fincantieri Marinette as one of the two, I would say, dedicated nominated shipbuilders.

The process of transforming this announcement into an order is, I would say, expected to be very fast in the very short term. So let me say discussions are happening while we speak.

Again, we don't rely in the short term on U.S. for volumes. So the agreement we achieved with U.S. is an agreement whereby we are kept harmless. So for the time being, it is not a business of volumes. So we don't look for volumes there. We don't need volumes there.

Having said that, the agreement has multiple legs, one of the legs is the allocation and award of new classes of ships to the shipyard. And the agreement was achieved in the end of 2025, and we are receiving this communication from the Navy so early and so quickly. So let me say, we are very positive with respect to U.S. to U.S. We are very happy that we have created a new baseline, clearing all possible risks of the past. We don't need volumes. We need to procure the already achieved agreement translates with the velocity that we are experiencing together, but that's what we want to see. So we are very positive. And to cut the long story short, we believe that the contractualization is going to happen very, very soon.

The next question is from Emanuele Gallazzi of Equita.

I have three questions. The first one is a follow-up on the geopolitical topic. Very clear, your explanation on the ship owner side. I was wondering if you can discuss also on your cost side, which dynamics are you, let's say, seen on your input cost.

The second one is on the capital increase or the M&A. You clearly mentioned that you are looking at some opportunity. If you can just discuss a little bit more on your strategy, if anything has changed post the -- or with the capital increase? And should we have to expect say, a big deal? Or are you looking more at small and selective deals adding technologies or know-how to your portfolio?

And the last one is on WASS. We have seen two important orders coming from India and Saudi. Can you discuss more on deals? And have you seen an acceleration in the last month of, let's say, negotiation or tenders for WASS and generally speaking, for the whole underwater business.

Thank you very much for your question. On your first question, we are in full control of the variables, of the economic variables that can be affected by the geopolitical issues or the famous geopolitical issue in the sense that the energy prices of Fincantieri are fixed for 2026. The same more or less is with gas procurement -- with gas oil procurement. So with respect to energy, we have the coverage in place for 2026 in order not to receive any, I would say, negative impacts.

When it comes -- if we move to steel prices, it is the same in the sense that we have already fixed procurement costs, prices for approximately 90% of the quantities. So once again, we are in good shape. So energy and steel are the two major components with respect to which we are covered with respect to which we are continuing to monitor the situation.

On your second question on M&A, we are very active. We have many dossier in our hands. We have very clear ideas of what we are looking for. Because we have been testing and shaping the market for this acceleration in the underwater in the last couple of years, all kind of transactions. There are different possible transactions. For sure, we are calling it, naming it selective M&A, meaning that we don't want to -- we are not looking for transformational M&A. So it is not something that is going to change the face of the company, but it's something that will sizably visibly accelerate the expansion in the underwater.

So it has to do with the key technological blocks of the underwater, for example, propulsion systems. It has to do with another key component which is the electronics of the underwater. So any kind of software from command and control to telecommunications. And it has to do also with access to markets, including nondefense markets and business models.

So we strongly believe that we can put on the table a lot of new technologies, and we are thinking in terms of M&A in order to envisage how to transform as quickly as possible those technology into integrated technologies, so our technology integrated with other technologies and how to accelerate the commercial reach in the direction of clients, not necessarily only on the defense side.

So we will get back to you, but we are working hard in that respect. So we have a large business development and M&A team, which is being working and preparing since many months. And now that we have the capital increase ammunitions we will be more than happy to translate all this preparation into execution.

On your third question, WASS is doing fantastically as Remazel is doing fantastically. So we are immensely happy of both acquisitions. Both companies are doing better than expected in any respect and are perfectly fitting with the rest of the group, creating synergies on the one hand, and expanding markets and giving access to adjacent market to Fincantieri commercial proposition.

With respect to WASS, India and Saudi are very emblematic, are very indicative of the first and most evident item of the defense procurement in a moment like this. i.e., ammunitions. So the world realized that in the last years, many submarines or many naval assets were built, but with very limited, I would say, ammunition warehouses. So the defense expenditure is, first of all, an exercise of replenishment of warehouses. And in this respect, torpedoes are very clear and very evident.

We are doing more than that. So we are evolving the product, thinking of how to adapt this kind of product to the world of drones. For example, in this respect, I think that WASS is ahead of the other competitors. So WASS is already able to supply drones with very light torpedoes, which is the new generation of surface drones.

So yes, you want them to perform intelligence, surveillance and reconnaissance. That's the way military people call the first task of water drones underwater surface -- sorry, surface drones. But at the end of the day, you need also to go to a second phase, the second step, which is the step where the drone is also armed in order to be able to react on top of detecting the threat. This is what is happening also.

So let me say WASS is remarkably centered, remarkably focused in this dynamic and then is working on the ad agencies. So what to do on sonars, how to be very effective on certain kind of sonar applications such as demining, which will be another priority, unfortunately enough, of the world.

So it's going very well, and we are very happy with WASS. We are working also in order to expand the production capacity of WASS. So capacity boost is the title of the book for the new Fincantieri business plan and is consistently in a coherent way also the name of the book in WASS. So we are working in order to expand capacity because it's having a lot of demand that we need to increase capacity accordingly.

The next question is from Gabriele Gambarova of Intesa Sanpaolo.

Just three from my side. The first one is on the SAFE program, the European Safe program, the EUR 150 billion program. I was wondering if you have any update on this program because it seems to me that this is a little bit in delay. This is my personal perception, but I don't know if you have any insight on this?

The second demand. Then the second question is again on naval. I saw a slowdown in the top line in the fourth quarter 2025. I know that the backlog is very healthy. So I was wondering if you could give me some more detail on this trend we saw at the end of 2025, if there is an explanation, particular explanation.

The second question, this is for naval. The second question regards the reverse factoring. I saw that it grew by EUR 200 million in 2025 to EUR 850 million. So I was wondering what could we assume for 2026, what is embedded in your guidance basically. And the last one regards M&A and the infrastructure. I saw that the business is doing very well is recovering after we closed the Miami, let's say, job order. I was wondering if you consider, if it's something that you would, let's say, assume to sell this business, which is doing well, but I think it's not core business.

Very good. Thank you. On the SAFE program, let me disagree with you. Or partially agree with you in the Anglo-Saxon way, in the sense that SAFE is expected to be a fast track process, you know that there is a gate expected for June 2026. And we see all the horses running according to the race. So we don't see a delay. And again, it's for sure, a big rush because June is tomorrow morning. But all the, I would say condition precedents, condition precedent for SAFE to be activated on time out there. So I don't see your point.

Again, it's a program that is asking nations to finalize a huge amount of contracts in a very limited time frame. So it is very difficult that you do it in advance. So the deadline is June.

On the naval, again, all the production curves driving the revenue recognition not going according to expectations. So this is absolutely physiological. We have to consider that there is a change in the revenue curve of U.S., which is, for sure, to be considered when looking at last part of 2025 and 2026.

Again, on the Naval, the point will not be the revenue level as rather the materialization of all the orders that we are expecting. On the factoring, I will leave the floor to Giuseppe, but let me remain with the microphone for an extra minute for infrastructure.

So the infrastructure business is a source of satisfaction because of the turnaround we have achieved as a management team. So I think we did very well finalizing the bad experience in Miami, digesting all the tails and at the same time, preserving our reputation delivering impeccably what we had to deliver. So it's a sign of industrial strength, resilience, reliability, which is not obvious at all.

The infrastructure business is, therefore, getting rid of Miami tails and therefore, expressing evidencing good margins, thanks to the discipline, thanks to the quality of our people.

Let me say that the infrastructure business or at least a good part of it is proving to be, I would say, functional to Fincantieri strategy when it comes to naval basis, when it comes to protection of ports. So Fincantieri Infrastructure is a reality in marine works. And in the era of defense, in the era of expansion of defense infrastructure and in the era of expansion of protection of critical infrastructure to have a group of people that can take care of those jobs as a kind of end-to-end offering is proving to be interesting and successful.

So let me say, at least a big part of Fincantieri infrastructure is leaving a second life in a sense, helping defense business of Fincantieri with an end-to-end offering. And at the same time, being the entry point of, for example, Fincantieri Underwater when it comes to protection of ports and protection of key marine and maritime infrastructure.

So obviously, we retain all options opened. So we will leave also without Fincantieri infrastructure. It's not a best [indiscernible] component of Fincantieri business model. But as of today, we are very happy of having Fincantieri infrastructure in our group, because we are exploring and pursuing very interesting business model, whereby we integrate end-to-end the ship in the naval base, in terms of infrastructure works and we use them to enter the business of infrastructure protection with Fincantieri NexTech technologies, for example, on ports.

On the factoring question, I leave the ground to Giuseppe.

But it's very high. It's very simple. You can easily expect the same amount and the same levels we've reached in 2025. So this factoring is something that we put. It's something that helps our suppliers to finance themselves within their net working capital requirements. We expect to -- we factor in the same levels as of 2025.

The next question is from Lorenzo Di Patrizi of Bank of America.

So the first one on Navis Sapiens. So you delivered your first vessel in February. Could you give us more color on the margin difference versus similar past vessels and what we should expect from the Navis Sapiens program in the next one, two years?

And then secondly, so on the naval pipeline, actually on the pipeline in general, so you gave this figure EUR 32.5 billion. Can you give us more color on the pipeline outside of the EUR 5 billion in Naval. And also, for example, I'm thinking of India, in particular, is there an update there? And could you give us more details on what the country has in store in the next few years in terms of investments that you could benefit from?

Thank you very much for your question. But let me say, Navis Sapiens is a transformational product. So the piece of news is that there is a ship sailing today where we speak which is having on board this new brain, which is a combination of new hardware and new software that is being validated by a ship owner in real life, in regular life.

So this is the big news. This is the breaking news. Its transformational in the sense that it gives distinctiveness to Fincantieri offering simply because thanks to this new "instrument", the ship owner will benefit from improvement in the behavior of the ship and therefore, in the cost profile of the ship.

So the first effect is that we are positioning Fincantieri product in a different way. So when you buy a Fincantieri ship, you will always buy a ship with a brain, then it will be up to you to leverage on this, and it will be up to you to install over the air, all the new applications, for example, for optimizing roots and consumptions or for optimizing maintenance and other key activities in terms of OpEx and costs.

So consider it as a strategic step, which is, let me say, prolong in the future, way ahead in the future, the distinctiveness of Fincantieri product. Then obviously, it represents itself a product for our NexTech which is the technological pole inside Fincantieri organization. You know that we have created a joint venture with Accenture 70/30, which is practically writing the codes of this new system, which is made of a data platform according to the latest architecture laid upon our own automation systems. So in NexTech, we have a company that is taking care of automation system, and this company is now having on top of the layer of the automation system, this platform system.

And the business model of NexTech will be to host on this platform as many third-party products as possible on top of selling internally produced internally developed applications to be sold to the ship owners on the platform.

So it's a new concept. But the beauty of the story is that this concept is being adopted by one client. And it is on the air and is working very well. And we have in our business plan, some ramp-up of this product. And we have quite an extensive team working on that. And the initial results are very encouraging, and we are very happy with that.

Second question is more color about naval order intake. I think there is no secret about the fact that the Italian Navy is expected to move the DDX program from the engineering study into construction. We are working relentlessly with the Navy with Orizzonte Sistemi Navali with Leonardo in order to quickly move forward in this respect. Then there are other initiatives with the same Italian Navy, for example, the LSS3, which is the third of the logistics ship class. And then there are a number of very hot non-Italian Navy prospects on which we are working a lot with respect to which we are very positive.

Then obviously, the market is big. There are many opportunities. Again, we have a lot of tenders out in the short term, obviously, it has to be something that is already in the oven. It's ready in the kitchen. But in the surroundings of the kitchen, there are many, many, many opportunities.

So it's very important that this good momentum kicks in terms of tangible orders. But again, we are not at all worried about what we're going to do in our naval shipyards. As you may know, we are already working in order to double our capacity. And again, if a couple of things happens, we are already fully booked even after doubling the capacity.

India. India is an immense market with a very specific business model, which is the business model of Make in India. We are -- I would say, well known in India because we built two ships for them, two logistics ship for them, something like 10 years ago, more or less. There are many programs. We are in association with many local shipyards. The system is different because the naval construction of ships by law is to be awarded to state-owned shipyards. So it's very important to team up with the relevant ones. That's what we are doing.

And then the second peculiarity of India is that in order to provide packages in terms of material, for example, you have to coproduce locally with partners. So this is something we are already doing. We are already working since years in the coal production and coal manufacturing of for example, certain components of propulsion systems. So the business model, it's a business model whereby you sell design packages, you sell material packages and then you cooperate in the construction with a local shipyard with a kind of construction management assistance.

There are many programs that are going to be awarded in the next months. There is one that is very, very interesting, which is an LPD, which is a kind of small aircraft carrier kind of big ship. They have a big tender for LPD. But this is just an example of what we have been doing and how we are taking care and looking after the Indian market.

The next question is from Sriram Krishnan of Deutsche Bank.

Perfect. So I've got a couple of questions. The first one is actually on the Equipment division. Particularly the electronics cluster.

Okay. So I just wanted to conclude that question which I had. So this question was on the Equipment division, particularly on the electronics cluster and the infrastructure. Clearly, despite modest growth in the top line. I think the margin was very impressive with the electronics business and in a very similar way, even in the infrastructure business, whether top line actually declined. And the margin was pretty impressive. So I wanted to understand, first, if there are any one-off items within this one in 2025. And how should we look at a sustainable margin of both these businesses in 2026 and going forward? That's the first question.

The second question is to do with the U.S. order potential, the landing ships related to. We understand that you have received an order for four ships and the potential long term is well over 30. So I wanted to -- can you confirm if there will be only two shipyards involved in this program or there are more shipyards which are likely to be inducted into this? And as a follow-up or a very similar one, can you give us any update on the NGLS program as well in U.S. and which you are competing as well?

On the U.S. part of the story, the U.S. Navy announced its intention to award for LSM to Fincantieri USA. And the contractualization is expected to happen according to contracts and negotiations that are going on in these weeks, in these days.

As far as we understand, but it's not up to us, the construction strategy of the U.S. Navy is to select two shipyards, simply because according to their long-term planning, the expected number of ships is, if I don't go wrong more than 30, more than 30. So they want to have at least two parallel shipyards working together. Which is good, which is important, because it means that you create specialization, which is deeper requisite for performance and for reciprocal and mutual satisfaction.

On the NGLS program, which was part of your second question, can you tell me more, please?

So this is -- I understand I think Fincantieri Canada business apparently has won some sort of design and construction order with regards to the next-generation logistics program. I think overall size of this program is to procure somewhere around 12 to 13 ships in the long term. So I just wanted to understand where this leaves you are the only company who is involved in this one for the U.S.? Or how many ships are you envisaging as an order flow from this contract and so on?

Well let me say, United States, we have a shipyard that is concentrated on civilian shipbuilding. And they are very active in barges and in other kind of ships. And then on top of it, we have company in Canada, it's called Vard Canada, which is very good in design packages either for coastal literal ships and for, I would say, commercial ships. So obviously, both entities are engaged in all the possible dynamics and projects in that part of the world. So I can, in general, confirm that there is a lot of action, a lot of movement and a lot of I would say, interest and commercial activity also in that segment, also in that quadrant.

On the -- on your first question on electronics, I would rather give the floor to Giuseppe for some more detail.

Yes. Well, I mean speaking of 2025 results vis-a-vis 2024 it's the other way. I mean, 2024 was affected by some one-offs and some write-offs that we did on certain projects. And therefore, the margin that we -- EBITDA margin that we achieved in 2025, 6.9%, is more, let me say, representative of what you're going to see in the coming years and in the business plan. With potentially, of course, some slow, but steady pickup throughout the years, thanks also to Navis Sapiens and all the innovation and deployment of new technologies that we envisage in the business plan. .

And if I may just follow up on that one. How do you envisage the top line for infra business? We understand that things have stabilized a lot. Should we expect some sort of a pickup in business in intra? Or should things be largely stable?

I'm sorry, the line is very bad. Can you repeat the question? We really can't hear you very well.

My apologies. Is it any better now?

Yes, yes, better.

All right. Sorry about that -- my line. No, I just was following up with the infrastructure part as well. Do you think that this is going to be a largely stable sort of revenue for the info business going forward? Or how -- just wanted to view on the infra business at the top line level?

The infrastructure business is having good prospects in France, again, driven by the backlog order intake which is becoming more and more evident. We have projected in the business plan, I would say, disciplined growth in terms of revenues, capitalizing on the, I would say, good returns and stable returns that we are -- that we have experienced in 2025.

So the market is there in terms of marine works and other businesses of the company. The company is also focused on the steel fabrication. So steel structures, which are needed for multiple purposes, not only for shipbuilding, but also, for example, for bridges and things like that.

So that's the second business of the company, they continue to experience stable demand. And so we are projecting it -- again, it is not where we want to put all our entrepreneurship. Our core business is elsewhere, but we're very happy that they are in good shape. And in particular, we are very happy when we can use them, as I was describing before, in order to increase the end-to-end offering of Fincantieri when we are interacting with the new Navy with an international Navy but also with our Navy.

Whenever there is -- there are needed some marine works in order to accommodate the new fleet and also the new, I would say, technological infrastructure on top of physical infrastructure. So sensors, anti-drones, whatever is needed when you enlarge your base, your military base on top of your naval asset.

Thank you so much, and apologies for the bad line.

It was very good at the end. Thank you.

Gentlemen, there are no more questions registered at this time. .

Thank you very much to all. Goodbye.

Ladies and gentlemen, thank you for joining. The conference is now over. You may disconnect your telephones. Thank you.

Good morning. This is the Chorus Call conference operator. Welcome, and thank you for joining Fincantieri 9 Months 2025 Results Conference Call. [Operator Instructions] At this time, I would like to turn the conference over to Mr. Folgiero, Chief Executive Officer and Managing Director. Please go ahead, sir.

Good afternoon, ladies and gentlemen, and thank you for joining us today to discuss Fincantieri's 9 months 2025 results. We are pleased to present another solid set of results, building on the positive trajectory of the first half of the year.

Revenue growth remains robust across all segments, supported by favorable market tailwinds while increased operational efficiency in Cruise and higher contribution from the defense business keep driving margin expansion at the group level. Our underwater segment is growing according to plan and continues to deliver premium margins, strengthening its position as a key value and profitability driver for the group. We also enjoy exceptional visibility on our long-term business outlook, backed by a record high backlog that provides a strong foundation for future growth. Finally, our initiatives to improve working capital dynamics are supporting our rapid deleveraging trajectory, enhancing both financial flexibility and capital efficiency.

Let's now move to Page 4 for a brief summary of the financial and commercial highlights of the period. Revenues grew by 20.5% year-on-year to EUR 6.725 billion, supported by strong contribution from all business segments, in particular, Shipbuilding. We also achieved a significant increase in profitability with EBITDA posting an impressive double-digit growth of 40.4%, reaching EUR 461 million. EBITDA margin improved materially to 6.9% compared to 6.3% at year-end 2024 and 5.9% in the first 9 months of 2024. This substantial and rapid growth is particularly noteworthy given that operate in a heavy industry sector with low by rhythms.

Our net debt came in at EUR 1.65 billion, slightly better than EUR 167 billion recorded at year-end 2024, with a net debt-to-EBITDA ratio of 2.6x, improving compared to the ratio of 3.3x recorded at the end of 2024. Turning to Page 5. Our commercial performance was remarkable in the first 9 months of the year. We recorded an order intake of EUR 16 billion, rising by 88.4% compared to the previous year and higher than record value achieved in the whole of 2024 with a book-to-bill of 2.4x. The backlog reached EUR 41 billion, increasing 32.3% compared to the end of 2024 with a total backlog reaching a record level of EUR 61.1 billion, approximately 7.5x 2024 revenues. This gives us an exceptional visibility on the long-term business outlook and revenue stream and represents a key part of our strategy.

With delivery schedule all the way to 2036, we can turn to our supply chain partners and agree on terms, which favor both parties, thanks to the long-term commitment and higher volumes we can guarantee. Let's move to Page 6. 2025 represents the consolidation and progress of our vision and strategy. We confirmed our guidance for year-end as a demonstration of our ability to set an ambitious trajectory and to deliver it. Revenues for 2025 are expected to reach approximately EUR 9 billion. EBITDA margin is foreseen in excess of 7%, building upon the material increase in profitability already recorded across all our business segments in the first 9 months of this year. The deleveraging part is well ahead of our 2023-2027 business plan target, and we confirm the net debt to EBITDA to remain between 2.7 and 3x in full year results.

Finally, we expect positive net income at the end of the year. Let's move now to Page 7 for some insights on the commercial opportunities ahead. Our order intake continues to benefit from a solid pipeline with further tangible commercial opportunities valued at approximately EUR 26 billion, supported by our strong market positioning and favorable dynamics across all business segments. Cruise maintains its extraordinary momentum with a vertical increase in order across all product segments. Last September, we signed a contract with TUI for the design and construction of 2 vessels belonging to the intuition class, confirming once again our strong relationship with all world's most prominent cruise operators.

In defense, a preliminary agreement was signed with Greece for the transfer to the Atlantic Navy of 2 vessels of the Italian Navy. Hence, we expect this to ship to be replaced with new orders to the Italian Navy in the near future. Demand in the offshore and specialized vessel segment remains solid, with several new orders finalized during 2025 through our subsidiary, Vard, including the contract for 2 hybrid SOVs for North Star, confirming our leading position in this market.

Lastly, in the underwater segment, we are seeing the tangible benefits of our strong commercial positioning, also thanks to Vard's solution for top tier navies and to a broad portfolio of products with application in defense, commercial and use as we can see more in detail on Page 8. A clear example of excellence in our unmanned management system and underwater business is the SAND Marine drone, an unmanned surface vessel designed for a wide range of missions. Enhanced by the onboarding integration of the large system, which enables the deployment of underwater unmanned vehicles. In the field of offshore subsea infrastructure protection, we signed an agreement with Jan De Nul for the design and supply of an advanced system developed by Remazel for the transport and laying of rocks on the seabed to protect cables and pipelines called rock dumping.

More recently, we signed an agreement with Defcomm, supporting Fincantieri in developing and integrating deployment capabilities for autonomous surface vehicles on its naval units. Finally, last October, we presented DEEP, an integrated and cutting-edge solution for the protection, development and maintenance of critical underwater and port infrastructure. The system consists of a network of underwater sensors for early warning, a command and control center, a team of autonomous underwater vehicles and an AI-based platform for data analysis and processing. These high-tech solution and partnerships showcase our positioning as an orchestrator in the underwater domain.

Moving to Page 9. You can see how our commercial efforts are translating into an impressive order book. The first 9 months of the year, we secured a significant number of new orders, further consolidating Fincantieri's expansive global reach across all business segments and ensuring deep visibility up to 2036. In the first 9 months, we delivered 19 units from 9 shipyards. And as we speak, we have a full slate of deliveries scheduled up to 2036 with more to come. One prototype ship we expected to deliver at the end of 2025 will be delivered at the beginning of 2026, being a highly technological project for which we want to ensure the utmost quality of delivery.

Now I will hand the call over to Giuseppe, who will discuss our financial results in more detail. Please, Giuseppe.

Thank you, Pierroberto, and good morning, ladies and gentlemen. I'll move on to Page 11.

On the order intake, which was at EUR 16 billion greater than the whole of 2024 with a book-to-bill at 2.4x revenues. This indicates a very strong and sustained growth of Fincantieri Commercial pipeline, fueled by demand across all our core business segments. In shipbuilding, in particular, we posted EUR 4.6 billion in orders that is more than twice the first 9 months of 2024. Also in offshore and the other segments, orders were robust and accounted for almost EUR 2 billion. On Page 12, of course, the very high order acquisition brings us again to a record high backlog of EUR 61.1 billion, which stands at over 7x full year 2024 revenues and a backlog of EUR 41 billion with a soft of EUR 20.1 billion.

In this backlog, Cruise accounts for 34 units, defense, 29, underwater 4, submarines and offshore 33 vessels for a total of over -- of roughly 100 units with a clear and deep visibility for the years to come with deliveries, as we mentioned before, deliveries up to 2036. In the first 9 months of this year, we have so far delivered 19 units from 9 different shipyards. On Page 13, on financial revenues, a little in excess of EUR 6.7 billion, up 20.5% year-on-year. Here, we have a strong contribution coming from the Shipbuilding segment, which posted a 22.7% growth. And this growth is across cruise and defense, but particularly in defense, we grew 38.5%. This is partly -- this growth is partly driven from -- by the contract that we finalized in the first quarter of 2025 for the sales of 2 multipurpose combat units to the Indonesian Navy.

Shipbuilding roughly accounts for 68% of all group revenues, and offshore, which accounts for 14% of total revenues, rose as well by almost 13%, and this reflects the sustained growth trajectory of recent years, underpinned by the progressive development of the group's order backlog. Underwater revenues came at EUR 386 million, also driven by the consolidation of bus submarine systems in the first quarter of 2025 and the ramp-up of the construction of the first submarine for the Italian Navy, which is going to be delivered in 2029. Finally, Equipment, Systems and Infrastructure revenues are stable year-on-year at EUR 927 million. This is despite the reclassification of the subsidiary Seaonics to the offshore and specialized vessel segments.

Let's turn to Page 14 with the EBITDA, which is up 40.4% versus the first 9 months of last year and reached EUR 461 million. EBITDA margin grew to 6.9%, steadily improving from 6.3% reported at year-end 2024 and 5.9% reported in the first 9 months of 2024. Shipbuilding recorded an EBITDA of EUR 316 million, increased by 33% versus the previous year with an EBITDA margin of 6.5%, up 0.5 percentage points compared to the same period of 2024. And this is thanks to 2 drivers mainly results of the operational efficiency initiatives deployed in the cruise sector and the growth in the defense business, which, as you know, is characterized by higher profitability.

The Offshore and Specialized Vessels EBITDA reached EUR 57 million, increased by 21.4% compared to the EUR 47 million at the end of September of 2024 and EBITDA margin of 5.4% was roughly 5% in the first 9 months of last year. The underwater delivered an EBITDA of EUR 67 million with a margin of 17.3%. This confirms the sectors -- the segment's premium profitability. In the Equipment, Systems and Services and Infrastructure segment, EBITDA increased by almost 37% compared to the first 9 months of 2024, reaching EUR 68 million with an improving EBITDA margin at 7.4%. This is mainly driven -- the improvement is mainly driven by the Mechatronics and the infrastructure business.

Finally, on Page 15, net working capital and net debt. As of the end of September, we posted a net debt of EUR 1.6 billion roughly, in line with the [ EUR 1,648 million ] recorded at the end of the first half of 2025 and slightly better than the 2024 year-end figure, which was EUR 1.668 billion. The leverage ratio improved to 2.6x, and this is significantly lower than the 3.3x of year-end 2024. In this matter, we continue to work on the optimization of net working capital, which stands at negative EUR 465 million, and it's stable compared to year-end 2024. We have an increase in inventories and advances and trade receivables that more than offset the increase in trade payables and the decrease in work in progress, construction contracts and client advances.

With that, I will now hand the call back to Pierroberto for his closing remarks.

Thank you, Giuseppe. Let me now summarize some key takeaways on Page 17. We have delivered strong operational and financial results, which provide full visibility on achieving our year-end targets. Margins improved solidly year-on-year, supported by higher operational efficiency in Cruise, a greater contribution from defense and the continued strong performance of our underwater business. Cruise, we benefit from deep backlog visibility up to 2036, enhancing profitability and cash flows, thanks to working capital optimization, capacity saturation and increased procurement efficiency. At the same time, the current global geopolitical environment is creating significant growth opportunities in defense, which we are well positioned to capture. We are consolidating our position as a leading orchestrator in the underwater domain, expanding both our product offering and business development capabilities, also through targeted acquisitions and strategic partnerships.

Finally, as we speak, we are working on the new business plan to be approved by year-end that will lay the foundations for the next phase of growth and value creation. The strong results achieved in the first 9 months of 2025 allow us to confirm our guidance for the full year 2025. Revenues at approximately EUR 9 billion, EBITDA margin greater than 7%, net debt-to-EBITDA between 2.7 and 3x and positive net income.

With that, we are now open to take your questions.

[Operator Instructions] The first question is from Emanuele Gallazzi with Equita.

Three questions from my side. The first one is if there is any news from the U.S. market, I'm referring to, let's say, both the constellation program and the new opportunity in both civil and the naval shipbuilding. The second one is on Cruise. If you can just give us a sense of the current profitability for the business? And also considering the strong momentum on the order intake, would you say that last orders have a better profitability embedded?

And third one is on the net debt. Given that you are already at 2.6x net debt on EBITDA in the last 12 months, are you, let's say, more confident to be at around 2.7x by year-end? Or is there something on, for example, net working capital we should consider for the fourth quarter?

On the U.S.A. question, thank you, Emanuele, for your intervention. On the U.S.A. question, there are no significant information to be shared. We continue to pursue the strategic market of U.S. as a very important investment, very valuable contribution to the renaissance of shipbuilding in U.S. And we strongly believe that Fincantieri long-term mentality, which led our investment, again, 20 years ago. But this long-term mentality will pay back very soon.

What about Cruise and profitability of Cruise?

Yes, we are experiencing a level of interaction with our partner shipowners, a level of interaction that is giving us the perception of better profitability. More in general, I strongly believe that this big wave and multiple wave of awards will create the preconditions for a stronger execution, first of all, simply because our business is since ever a business of saturation. The more you can achieve saturation in your infrastructure, the more you can optimize the common cost and fixed cost. One and two, this very profound, very long-term aggregation of job and orders creates another very important precondition, which is the ability to negotiate, I would say, repetitive contracts with vendors, giving to vendors extensive visibility and therefore, apply a level of prices and entrepreneurship in general, which is higher and higher. So there's good momentum in Cruise.

Let me summarize, creates very good conditions with the clients, but most importantly, saturation in the employment of the infrastructure and optimization of the pricing and the relationship with the supply chain with the mentality of having a long-term alliance rather than a pure commercial play.

Moving to the debt. I would rather leave the floor to Giuseppe, but I believe it is very linear.

Well, the answer straightforward is yes, we're very confident on stay where we are and close year-end between 2.6, 2.7 ratio. So in the lower part of our guidance, very confident.

The next question is from Antonio Gianfrancesco with Intermonte.

I have 2. The first one is about future margin expansion because looking back over the last couple of years, Fincantieri demonstrated strong execution and efficiency reflected in a strong margin improvement.

Now looking ahead, I would like to understand the main factors that could lead to a faster margin expansion in the coming years. I mean, it is fair to say that most of cruise efficiency work has been done and that faster margin expansion will be more linked to a better business mix with a greater contribution from Naval and underwater activities? Or do you think that there is even more space also in the Cruise business? The second one is more specifically on defense underwater business. The market there remains extremely supportive. And I imagine your pipeline of potential new orders is quite strong. So I would understand in which geographical areas there is greater push to convert briefly the higher defense budget into actual investments and therefore, the greatest likelihood of orders in short to medium term.

Thank you, Antonio, for your questions. With respect to the first, we still reiterate and we still believe that we have 2 engines in terms of enhanced profitability. The first engine is the continuation of the activities and efforts we are injecting in the cruise business, which is a business of volumes, which is a business in which the enhancement of margins is strongly dependent on the circulation, again, of the infrastructure and fixed cost. And as I just finished to say, your ability to negotiate with the supply chain with a long-term deal rather than with an opportunistic deal.

So I believe that this engine is still on. It is still pushing forward. Then as you properly said, there is a second engine, which is the engine of the revenue mix, which is an engine whereby the improving the marginality kicks in as soon as the defense revenues will go up. So I think there are still both the opportunities there, and it is our, I would say, relentless effort to make it happen. And the new business plan will be the place in which these dynamics will be factored in. Moving to your second question, which is more on defense, which are the geographical areas in which we feel the commercial temperature "up and up." I would say there are 3 concentric circles.

The first one is Italy, where the Italian Navy is accelerating as the rest of the armed forces, the cycle of investment and contractualization. So according to the existing, I would say, public planning of future investment in naval defense, there are expected in short term, several possible awards, namely the Destroyer, namely the [ PPA program ], the LSS logistic ships program, the LXD, which are lending platforms. So there is a very clear road map of acceleration for the Italian Navy, let me say, which is the first circle.

Then there is a second concentric circle, which is Europe. As you may know, the SAFE program is a facility for EUR 150 billion, which is reserved to nations, which already secured an allocation of this EUR 150 billion, which is secured to nations according to 3 criteria to be verified. One is the ability to spend money within 2030. The second one is that at least 2 nations have to collaborate, i.e., European Union is pursuing defragmentation. Condition #3 is that 65% of the content of the supply chain of the ship of the Armament system has to be produced in Europe.

So this is happening. So it's EUR 150 billion. There are many navies that are discussing, I would say, each other, including with us. And so we believe that the 2030 condition, which is, again, 1 of the 3 compulsory conditions, but the 2030 condition will be a big push for this defense market to accelerate because basically, the European Union wants to -- wants nations to invest in defense and is prepared to give money if you are doing it now in the short term.

Then there is a third concentric circle, which is the export outside Europe. And as several times specified, we are very focused on 2 regions, in 2 extra European regions. One is the Middle East and the other one is Southeast Asia. In Middle East, we have a lot of presence already. We have very good credentials. And therefore, we are very active in very important nations such as Emirates and Saudi -- and Saudi Arabia, having domestic ambition, but also international ambitions. Middle East and Southeast Asia. We are, as you know, very well, very happy with the flag we put in Indonesia, which is an emblematic example of what is the level of attention to the naval, I would say, environment of that part of the world. But the same is Malaysia, the same is Thailand, Philippines, Vietnam. So there are several programs going on. I would say, in Southeast Asia, Fincantieri is very well positioned to pursue them. Obviously, with the level of velocity, with the level of speed that is typical of the procurement cycle of the public administration, i.e., there are no bleeds overnight.

It's a business for farmers. It's not a business for hunters, but you have to be there. You have to take care of the soil, pour the water and look after the small opportunity until it becomes a large award. We are very satisfied with our international expansion with our commercial internationalization process, which is leading us to have a very, very, very detailed and ramnified presence all over the world.

The next question is from Marco Vitale with Mediobanca.

I have a couple of follow-ups on the Defense segment. The first concerns the underwater business. You were mentioning that you're making a lot of efforts to expand the product portfolio in this division. Are you targeting also export opportunities for the system you are putting now into the market? Or do you expect this to be specifically devoted for your domestic customer? Second question is about -- we read about memorandum of understanding signed between Emirates and Angola to cooperate on the say, defense and Navy upgrade program. Do we expect this to provide you with additional growth opportunities for your export segment considering the JV that you have with the main defense conglomerate of the Emirates?

Thank you, Marco, for your question. Number one, underwater product, whether there is an -- sorry, an export opportunity or not. Absolutely, yes. I would say that the new navies that are looking into new international navies that are looking into the opportunity of expanding in naval base, those navies are particularly interested also in new technologies, in new attributes, I would say.

So by the way, the more your new technology is validated by the National Navy, the better it is. So this is the old school, I would say. But in the new industrial environment, it is true also the contrary, i.e., that new navies, international navies are more than happy also to shortcut and become themselves the partner of choice for those new technologies, also depending on the specific characteristic and requirements of the missions that these new drones or new technologies are expected to perform. So there is a lot of demand. The market is very, very "sparkling" and we feel very well positioned because we can associate the traditional products and the new attributes and new products in a way that is maximizing the sum of the parts.

Moving to your second question, the Emirates agreement with Sub-Saharan Africa, I would say, at large. We were kind of pioneer in the idea of joining forces with Abu Dhabi in order to go to Sub-Saharan Africa and to other regions. The joint venture we put together with EDGE or better one of the most important tasks and objectives of the joint venture we put together with EDGE was exactly this one, i.e., to join forces where we contribute our industrial capabilities and strength. They join their industrial capability and strengths and behave as an export platform in geographies in which the Abu Dhabi perspective, the Abu Dhabi geopolitics, the Abu Dhabi ability to financially support the defense capabilities and defense industrial base is very strong. So whenever Abu Dhabi is working and cultivating government-to-government relationship in the defense, our joint venture with EDGE, which is called MAESTRAL is naturally involved because this is the core strategy for Fincantieri and for EDGE in order to address those markets.

The next question is from Gabriele Gambarova with Intesa Sanpaolo.

The first one is on, again, on underwater on the Philippines and the Polish opportunities. Is there an idea of when the award may take place? And what is your, let's say, competitive advantage, I mean, in your perspective? I mean, is it possible that you could, say, provide better delivery times apart from the product? I mean, everybody knows it's very, very strong. But are there other, let's say, aspects that may position you better than the competition? So this is number one.

The second is on Rheinmetall, the move they made that they announced this, let's say, purchase of the Lürssen shipyard. So I was wondering what's your opinion on that? And the third one, if I may, is on Norway. There was the award of the Frigate contract that chose the Type 26. I understood, this is my interpretation that there was also politics, let's say, played a role there. I was wondering if you got some feedback, some comments on the products you submitted that is the constellation. Is it too young as a platform or something similar? I mean, any lesson learned from this experience would be interesting.

Thank you very much, Gabriele. On Poland, obviously, we depend on the public announcement of the "procurement officer" of the nation of the government, of the Polish government. Our latest news are the same, i.e., that the process is expected to be very fast. There is a lot of, I would say, preparation work already performed in the last months. So my information is that it's a short-term development. It is not a long shot. I believe that our offering is very robust.

First of all, from the technical perspective because we have extensive experience and the summary we offered is very well proven. But most importantly, I believe that it's better to go fast because this opportunity can be financed with a SAFE facility. And in order for it to happen, it's very important that the process is finalized very, very soon. So I strongly believe that the access to SAFE will obviously create kind of advantage of European players against non-European players for the bid. So technical expertise and reliability to "financeability", it's SAFE.

Point number three is delivery time, as you hinted before. I totally agree with you that in the new defense environment and space, it is so important that you can be faster than expected and you can be -- you can, in a sense, cut corners in order for the asset to be at sea sooner rather than later. So also in that respect, we are putting together very, I would say, very, very solid ideas that can truly procure that there is a strong differentiation of our offering vis-a-vis the others.

Moving to your second question, what's my gut feeling about what's my gut feeling on Rheinmetall and Lürssen. I think it's always good news when Europe gets more and more focused on the defense industrial base. This is exactly what nations are, I would say, constantly and consistently asking to players, to industrial players. So I'm very happy to see that Germany is -- which is a very important country, so focused on defense, so focused also on naval defense. I think that the involvement in the shipbuilding is not, I would say, downhill exercise. I think it's a very different business model with very different constraints with very different, I would say, dynamics from many respects in terms of supply chain, in terms of labor, in terms of appetite for risk, in terms of dependence on external parties' infrastructure. So it's a totally different exercise. But at the same time, I believe that Rheinmetall is a very sophisticated company, and they will find their way to become knowledgeable about such a different business.

Moving to Norway and the partnership with U.K. I 100% agree with you. It's a very clear example of geopolitical exercises rather than business exercises, which is the name of the game because when you sell defense, you don't sell a product. It's not a commercial game. It's a very serious geopolitical story. So our interpretation is that Norway is taking a view, which is a kind of, I would say, geopolitical view that U.K. is a partner in the defense and not only a supplier of ships. That's our interpretation of the tender. And I think that's what consistently happened throughout the -- our process. That's it. We have Fincantieri, we have very well-proven frigate platform, which is much more fashionable in the Mediterranean Sea.

The next question is from Michele Baldelli with BNP.

I have a couple of questions. The first one relates to the Greece order. Can you elaborate on the timing that we may see it in your P&L, if you can share it with us? And the second question relates -- I know that there could be a business plan presentation, therefore, more details around it. If you can anticipate something around the expansion CapEx plan. How do you see the defense capacity going on in the next few years? And what steps will you do?

Thank you, Michele. On your question with respect to your question on Greece, I think it's not possible nor appropriate to give details because it's a commercial prospect we are working on. What I can tell you is that this is the result of a long-term effort to create the partnership between Italy and Greece. This long-term effort has been pursued by the Italian institutions. The Italian Navy, first line, Minister of Defense, the Minister himself. So I believe it's a very strong and very win the stone kind of partnership.

There are a number of next steps very clearly agreed by the parties, which are being managed in accordance with expectations in terms of timing. I think that the -- I don't want to give too many details, but I think that the signature will be obviously in 2026. And this signature will be, I would say, a big achievement for Fincantieri because you know that once the Italian frigates will be sold and delivered to Greece, at the same time, the Italian Navy will place an order for 2 new frigates. We call it FREMM EVO, the evolution model, so the latest of the family. So new order intake for 2 frigates will take place at the same time. So it's very good news.

On your second question about the expansion of capacity, I think that the business plan disclosure will be the right time to give all the relevant details, which will be directly proportional to the market we see in front of us in terms of awards in the defense. What I can anticipate today is that we have a lot of elasticity and flexibility. So what we discovered in these months of preparation, what we discovered is that the system of shipyards of Fincantieri is a formidable tool source of flexibility in moments like that. So we have, I would say, kind of production footprint that can truly move and get along with the priorities of the market in a way that is, for a big part, seamless. What seamless means with the same existing infrastructure, with the same existing footprint, we can build much more.

Working on the production techniques, methodologies, small investment in incremental equipment, but we can do a lot with the same infrastructure, which means that we can pursue this growth in defense without the necessary time lag for the new investments to happen. So that's what I mean by having a versatile system of shipyards and being able to be flexible and very responsive to market demand. So we can increase a lot our construction hours in defense with the same existing installed infrastructure. That's what I would like to anticipate today. The rest of the, I would say, disclosure and unveiling will be done with the numbers in the right location.

Gentlemen, there are no more questions registered at this time. The floor is back to you.

Thank you very much. Thank you very much for your attendance.

Thank you. Bye-bye.

Thank you. Bye.

Good afternoon. This is the Chorus Call conference operator. Welcome, and thank you for joining the Fincantieri First Half 2025 Results Presentation Conference Call. [Operator Instructions]

At this time, I would like to turn the conference over to Mr. Pierroberto Folgiero, CEO and Managing Director. Please go ahead, sir.

Good afternoon, ladies and gentlemen, and thank you for joining us on today's call to discuss Fincantieri's first half 2025 results.

We are pleased to present a strong set of results for the first half of the year, building on a highly successful 2024 and equally positive first quarter of 2025. We recorded a solid performance in all of our key financials and metrics, putting the group firmly on track to achieve its 2025 guidance for revenues and margins and to improve our guidance on leverage with a net debt-to-EBITDA range of 2.7x to 3x.

Let's now move to Page 4 for a brief summary of the financial and commercial highlights of the first half of the year. Revenues increased by 24.3% year-on-year to EUR 4,576 million, underpinned by a positive contribution from all segments, in particular, shipbuilding, confirming the group trend of the first quarter.

Thanks to the virtuous path pursued by Fincantieri over the last years, we delivered also a significant increase in profitability with EBITDA posting an impressive double-digit growth of 45.3%, reaching EUR 311 million.

EBITDA margin grew to 6.8% with a market improvement compared to 6.3% at year-end of 2024, and increasing by 100 basis points versus 5.8% achieved in the first half of 2024. This growth is all the more impressive considering that we operate in the heavy industry sector that typically has slow bio rhythms.

Our net debt came in at EUR 1,644 million, significantly lower than the EUR 2.42 billion reached in the first half of 2024 and marginally better than the EUR 1,670 billion (sic) [ EUR 1,670 million ], excluding rights issue achieved in 2024, leading to a net debt-to-EBITDA ratio of 2.7x.

Turning now to our commercial performance on Page 5. We achieved remarkable results in the first half of 2025. Order intake stood at EUR 14.7 billion, showing an extraordinary growth compared to the first 6 months of 2024 with a book-to-bill ratio of 3.2x revenues. As a result, the backlog reached EUR 41.9 billion, up 35.1% compared to the full year 2024, with a record high total backlog of EUR 57.7 billion, representing 7.1x full year 2024 revenues.

Let's now move to Page 6. Our commercial pipeline remains strong, driven by our solid positioning and favorable market dynamics in all our segments. In the Cruise sector, we signed contracts with Crystal Cruises for 2 high-end vessels, with Four Season Yachts for a second ultra-luxury ship, with Norwegian Cruise Line Holdings for 4 jumbo ships and with Viking Cruises for 4 units.

In the Defense sector, we signed a contract for the construction of 2 PPA multipurpose combat ships. The 2 new PPAs in Light Plus configuration will be built at the integrated shipyard of Riva Trigoso and Muggiano, with deliveries scheduled for 2029 and 2030, respectively.

We also signed a Through Life Sustainment Management (TLSM 2) contract for in-service support for all systems and equipment for the FREMM units built and delivered by OSN to the Italian Navy. In Offshore, the momentum remains robust with orders for 2 units for Dongfeng offshore.

Lastly, in the new Underwater segment, we are seeing the tangible benefits of the strong commercial positioning and unique products and services offered by Remazel vessel IDS.

Looking ahead, we see further opportunities to strengthen our order intake, thanks to a commercial pipeline in which we are actively participating of approximately EUR 23 billion across all business segments.

Moving to Page 7, you can see how our commercial efforts are translating into an impressive order book. In the first half of the year, our portfolio benefits substantially from the acquisition of new orders, further consolidating Fincantieri's expansive global reach across all business segments and providing a profound visibility up to 2036.

In the first 6 months, we delivered 13 ships from 8 shipyards. And as we speak, we have a full state of deliveries scheduled over the next 11 years, with more to come.

In the first half of 2025, we not only delivered outstanding financial and operational results, but we have also continued to execute on certain core strategic initiatives that represent a solid foundation for future growth and innovation. In recent months, Fincantieri has taken decisive and visionary steps to establish itself as a leading technological integrator in the underwater domain, which more and more plays a central role in geopolitical strategy, driven by military priorities and protection of critical subsea infrastructure for energy and communications as well as for strategic control of the seabed.

In particular, we completed the acquisition of Leonardo's Underwater Armament Systems business line via the purchase of WASS Submarine Systems. We formalized the investment in WSense, a leading Italian deep tech company specializing in wireless network and advanced underwater monitoring and surveillance systems. And we signed 2 MOUs; one with EDGE, to jointly develop underwater technology supporting the United Arab Emirates in its ambition to become a regional reference point; and one with Graal Tech, for the development and commercialization of autonomous underwater solutions.

We are also accelerating our digital transformation across the cruise, defense, and port infrastructure sectors, also through the creation of Fincantieri Ingenium, a joint venture 70% owned by Fincantieri NexTech and 30% by Accenture. This is not a think tank or a venture capital, but a concrete element for our digitalization strategy for the industry today. One of its strategic initiatives is the development of Navis Sapiens, a digital ecosystem designed for the next-generation vessels and for upgrading the existing fleet that will be installed on the first ship by the end of 2025, beginning of 2026.

Last but not least, in our unwavering commitment to driving a sustainable industry, we established CircularYard in collaboration with Hera Group to implement an innovative integrated waste management system across all our Italian shipyards.

Now I will hand the call over to Giuseppe, who will discuss our financial results in more detail. Please, Giuseppe.

Thank you, Pierroberto, and good afternoon to everybody. Well, we can move on to Page 10, which we highlight again the record level of order intake. We reached in excess of EUR 14 billion, almost equal to the entire fiscal year 2024. At the end of the semester, the book-to-bill ratio stood at 3x revenues, and that indicates robust and sustained growth in Fincantieri's commercial pipeline, fueled by robust demand across all core business segments.

Of course, in addition to the order of the 4 jumbo cruise ships that Pierroberto mentioned before, for Norwegian Cruise lines, and the 4 ships ordered by Viking, we add to this order in the second quarter of 2025, the order coming from the Italian Navy that renews and strengthen further our partnership with our national client. Orders were also robust in the Offshore, Underwater and Equipment Systems and Services segments, together amounting at EUR 1 billion.

On Page 11, this record level brings the total backlog at over EUR 57 billion. In this slide, it is worthwhile to note the very strong conversion of the soft backlog into backlog. And at the same time, soft backlog remains robust, announcing further commercial successes in the times in the future.

On Page 12, revenues reached EUR 4.6 billion, up over 24% year-over-year, strong contribution coming from the Shipbuilding, which posted a 26.3% growth compared to the first half of 2024. In particular, the Defense segment recorded a 21% increase, mainly driven by the contract that we finalized with the Indonesian Navy in the first quarter of 2025.

Shipbuilding accounts for 68% of group total revenues, of which 43.2% from Cruise and 24% from Defense. Offshore and Specialized Vessel accounted for 13% of total revenue, and those revenues rose in excess of 10% year-over-year. And this comes from the sustained growth trajectory in the recent years and the progressive increase in order intake in wind offshore.

Underwater reached EUR 274 million, ramping up heavily compared to the first quarter of 2025, as expected, we must say, as the submarine program for the Italian Navy is picking up in terms of revenues and also in terms of contribution to EBITDA. We expect further revenue growth coming in the second half of the year, and we remain consistent with the guidance that we gave in the Underwater Day.

Equipment Systems & Infrastructure delivered a 9.8% year-on-year increase, reaching 13.4% of total revenues, and this comes primarily by a solid performance across the mechatronics and electronics clusters.

Moving on to Page 13. On EBITDA, in the first half of the year, we reached EUR 311 million, rising in absolute terms by 45.3% compared to the first half of last year. And of course, this has been driven by higher profitability in all the business segments.

EBITDA margin grew to 6.8%, up 1% year-on-year and improving compared to 6.3% reported at year-end. Within the segments, Shipbuilding recorded an EBITDA of EUR 280 million, increasing by 40.1% versus previous year, and EBITDA margin of 6.5%, up 0.6% compared to the same period of 2024, and this reflects revenue growth in the higher-margin defense business and the further improvement we are reaching in efficiency in the cruise business.

Offshore, EUR 32 million, increased by 20.7% compared to the first half of last year with a margin of 4.9%, up 40 basis points year-on-year. And Underwater, EUR 47 million and a margin of 17%, driven by what I said before, i.e., the sharp increase in revenue driven by the submarine program and also driven by very good performance from Remazel and also WASS.

In the Equipment Systems & Infrastructure segment, EBITDA increased by over 42% compared to the first half of last year, reaching EUR 46 million and an EBITDA margin of almost 7%.

On the back of the return to net profit -- and I'm on Page 14 right now -- at year-end 2024, in the first half of 2025, we posted, again, a net result, positive net result of EUR 35 million, marking a sharp recovery from the EUR 27 million negative recorded in the same period of 2024. And this result is mainly driven from the material growth in EBITDA, lower financial expenses as well as a reduced extraordinary and nonrecurring expenses burden. Adjusted net result, EUR 48 million, improving almost 5x compared to the EUR 10 million -- or compared to the EUR 10 million net loss in the first half of 2024.

On Page 15, net debt EUR 1.6 billion negative, improving significantly in comparison with the EUR 2.4 billion as of the end of June of 2024, and marginally better compared to the end of the year. Net debt-to-EBITDA ratio improved to 2.7x, and this is significantly lower than the 3.3x of year-end. And this is driven by a strong focus on financial discipline, optimization of net working capital and also -- this is also driven for the neutral net working capital strategy in Cruise. As of today, we have a very well-distributed debt maturity profile with no significant long-term debt maturities until 2027. And we also can rely on a sound financing structure with no covenants and approximately 85% fixed rate or hedged by derivatives.

Notwithstanding this, we continue to work on the optimization of our financing strategy. And a few days ago, we completed the placement of a medium- to long-term senior unsecured "Schuldschein" financing, which includes a 3-year maturity tranche due in 2028, and a 5-year maturity tranche due in July 2030, for a total amount of EUR 395 million. We received on this loan, a very strong demand that enabled us to upsize the original amount while securing interest rates at the lower end of the guided range.

Finally, on Page 16; net working capital stood at negative EUR 456 million, slightly up compared to year-end. This is mainly due to higher trade receivables and those higher trade receivables were partially offset by reduced construction contracts and client advances alongside increased inventories and advances to suppliers related to higher production volumes and the sale of the 2 vessels to the Indonesian Ministry of Defense.

With that, I will now hand the call back to Pierroberto.

Thank you, Giuseppe. The execution of our strategy continues to deliver remarkable results also in the first half of this year, reinforcing the company's growth outlook across the businesses. Our relentless focus on cash flow continues to drive our daily activity as we turn every stone to unlock value. The significant margin growth we are seeing in the first half of 2025 is a clear testament of the validity of these initiatives.

The cruise business continues to witness an impressive growth in demand, which we are satisfying by extending our delivery schedule to 2036. This deep backlog visibility allows us to optimize our procurement costs while the saturation of our capacity enables us to spread our fixed cost base more effectively, leading to higher profitability.

In defense, we are witnessing a favorable macro trend internationally, where we see more than EUR 20 billion of potential market opportunities that we can capture, also thanks to our flexible production capacity globally.

In the underwater, we have laid the foundations to grow this business further, leveraging on the dual-use DNA of Fincantieri, while continuing to validate our new product road map.

Thanks to the strong results achieved during this 6-month period, for year-end 2025, we confirm our guidance for revenues at around EUR 9 billion, EBITDA margin above 7% and positive net result and improve our guidance on net debt to EBITDA, which we expect between 2.7x and 3x compared to the previous guidance, in line with fiscal year 2024.

With that, we are now open to take your questions.

[Operator Instructions] The first question comes from Emanuele Gallazzi of Equita.

Three questions from my side. The first one is on APAC. You have been flagging the opportunities there for some time. And basically, we have seen some important initiatives to strengthen Fincantieri relationship there, like in Indonesia, Malaysia and Philippines. But how do you see this relationship evolving? And do you see other attractive market over there in APAC? That's my first question. Maybe we can go one by one.

On Southeast Asia, we confirm a number of possible deals, either in Indonesia, in Malaysia, Philippines, where the programs are loud and clear there. Then we are "cultivating" other markets such as Thailand and Vietnam. So those are the countries in which in Southeast Asia, we are very focused on.

Again, we are also increasing our presence in India, where we are already working on certain specific market components, in particular, propulsion systems, but we are positioning ourselves in terms of collaboration with the major state-owned and private shipyards because India has a Make in India strategy and requirement, but we are working actively also to be supportive and instrumental to this kind of renaissance of shipbuilding also in India. So that's all in all our, I would say, enlarged Southeast Asia perspective.

The second one is on the cruise business. Because looking at your second quarter results, and I think also you mentioned during the presentation, the cruise business is reporting, let's say, material improvement in terms of profitability. Can you give us a sense on how margins are evolving for the cruise business?

Let me say, we have been explaining since the presentation of the business plan in 2024 -- sorry, in 2022, that the main objective was to demonstrate that the profitability in the cruise business is better than what the market expects. So we have been working, we have been promising it, and we have been also explaining that the different pillars, the different projects, strategic projects envisaged in the 2022 business plan were exactly aimed at unlocking this value.

To give you the sense of those strategic projects, probably the most effective has been the procurement excellence and operational excellence. Procurement excellence has to do with a different approach on how to pursue economy of scale considering the big volumes that we can aggregate at group level and economies of scope at the moment of concentrating the procurement strategy on certain specific category.

So basically, this is a typical exercise you can perform when you have a variety of items to be procured and purchased and when you have also big volumes. Consider that a company having something like EUR 9 billion of revenues in the general contracting business, typically, the procurement accounts for, let's say, 60%. So assume that you have something like, I don't know, EUR 5.5 billion or even EUR 6 billion or whatever it is. If you save 1%, it's EUR 60 million. If you save 2%, it's EUR 120 million, if you save 3% it's EUR 180 million. So this is the magnitude of, let me say, an incremental improvement in the performance when you have such volume to be addressed.

So economy of scale and economy of scope on procurement, which is definitely where money is in a business like the general contracting. The rest is operational excellence. So how you manage execution risks in terms of contract management, in terms of risk management, in terms of construction management, in terms of management of subcontractors and performance at large. So we have been optimizing our operations from different perspective, for example, from the perspective of applying new technologies on welding or how to anticipate building conflicts when it comes from different itemized component in the typical engineering flow and construction flow.

So there are a number of, I would say, micro activities that have been implemented in the last 3 years. And now we are taking the fruits of that very meticulous day-by-day order optimization of the execution.

Very clear. The last one is a very quick one for Giuseppe and it's on financial charges that were down materially year-on-year. If you can just provide guidance for 2025 on financial charges, or expectation?

Yes, materially down also thanks to the optimization on net working capital that we have realized in the first quarter. Of course, we are partially profiting from a better interest rate environment, let me say. We should be in line with the first half of the year for the second half.

The next question is from Alessandro Pozzi of Mediobanca.

I have 2. The first one is on U.S. defense spending. We have now a better idea of where U.S. is going to spend money and how much is going to spend money in defense, up 13%, the defense budget year-on-year. Previously, you talked about the opportunity to do -- to build icebreakers to increase maintenance activity, especially in Jacksonville. Can you give us maybe an update on the opportunities that you see there?

And also second question is there was an article that caught my attention the other day, talking about the potential expansion of the shipyard in Ancona, with building much larger cruise ships. If you can maybe give us an idea of how that will improve the performance of cruise going forward?

On U.S., basically, we are working on 2 directions. One direction is how to, I would say, contribute to the debottlenecking of the naval shipbuilding in U.S., which is a big priority for the new administration. And we believe that Fincantieri can be very helpful, again, having more than 15 years of experience, having invested something like EUR 800 million and having 3,000 people there.

So the first focus is on how to, I would say, take advantage of this momentum in the, let me say, reorganization and in this new phases of the programs, of the navy programs and correspondent improvement in the productivity of existing shipyards.

The second priority is on the repair, as you very clearly mentioned, in Jacksonville, but also in the civilian shipbuilding. So we are, as you may know, also in the civilian shipbuilding because we have a shipyard that is already active in a number of ships that are built in U.S., according to the U.S. regulation. And we are, as you mentioned, highlighting and emphasizing the skills and competencies and capability we have for icebreakers and cable layers being 2 kind of ships that has the characteristic of being strategic because they are needed for your, I would say, sovereignty, for your self-resilience and independence. So we are working on those 2 directions.

Again, the new administration is progressively, let me say, materializing. It's view and vision on the months to come, and we will keep you posted accordingly.

Moving to Ancona. The investment program from Ancona was already there. The project was signed, if I don't go wrong, something like 1 year ago, project being the Alturita Portuale, so the port authority incurring the infrastructure costs for strengthening the throughput capacity of the shipyard. Because again, we have the availability of those spaces under a concession. And then we are expected to do our investments, which refer to the equipment associated. So lifting power and cranes and things like that.

So Ancona is a key shipyard for Fincantieri because it's the shipyard in charge for the luxury segment, taking advantage of the specific supply chain that you can rely upon in that region, again, having to do with luxury and so certain specific skills, materials, components, workforce and things like that.

Luxury ships are also, I would say, increasing their size, remaining still in the luxury segment. So we need the shipyard to be able to manage ships having gross tonnage beyond 50,000, 60,000, which is the current capacity. So I believe that those investments are healthy for the shipyard, healthy for the country and giving flexibility to Ancona, again, still remaining focused on the luxury segments, but giving flexibility to Ancona Shipyards, which plays a very important role in the system of shipyards of Fincantieri at large.

And will it bring more volumes? Or is it an example of a gain in productivity and efficiency?

It's both. It's both. We can manage higher gross tonnage, we can manage more ships at the same time in the shipyard, which means flexibility on the tonnage of the ship and ability to improve the productivity, and therefore, I would say, profitability of the infrastructure itself. So it's an investment in flexibility and in productivity.

The next question is from Antonio Gianfrancesco of Intermonte.

I have 2, please. The first one is about your Defense business segment. So what is your general outlook in that market? And mainly, what you can tell us about the major tenders you are competing for? I'm thinking about frigates for Norway, submarines for Philippines and also on the Polish ORKA submarine program.

My second question is related to U.S. tariffs. I was wondering how you are thinking about the impact of potential rising in aluminum and steel prices in single market, considering that the current U.S.-EU tariff agreement doesn't seem to cover that material and the U.S. has imposed a 50% global tariffs on that.

Can you repeat the first question? Which segment are you interested in?

Defense business segment, please. And mainly on the tenders you are competing for. So frigates for Norway, Philippines submarines and Orka program for Polish Navy.

You listed the main tenders. So the tenders are proceeding well. So we are open, and we are in the race, again, with a positive mood because we have a very well-proven product. Then we have availability to deliver, but also availability to deliver specific delivery expectations because the competition now is not only necessarily on price, but it's also on your ability to deliver in advance because now who is buying naval assets and defense assets in general is interested to have those assets at sea in operation as soon as possible.

You're not mentioning Saudi, which is nevertheless a very important tender we are in, as well as Malaysia and other European countries. You mentioned Poland, which is a tender in which we are very committed because it has to do with submarines, and it has to do with some new ideas and new features of our fully Italianized submarine.

So all in all, we have many prospects. All the balls are rolling, and we are positive and well positioned. That's your first question.

With respect to tariff, we don't have as of now, impacts. simply because on steel and other materials, we have a flexibility of procurement in multiple regions. And on top of it, the quantities we are buying, considering the total cost, total technical cost of a ship of one of our ship is not changing the profit to loss. So at the end of the day, as we have many times emphasized, our business is a business of system of systems rather than half fabrication.

So being far from being a traditional shipyard, being, again, system integrator not only we are not impacted because of the region of procurement, but also we are not affected because that specific commodity is not making a big difference in the total cost, in the total technical cost of the ship.

The next question is from Gabriele Gambarova of Intesa Sanpaolo.

The first one is on cruise. The top line growth was very sustained in the first half. So I was wondering what do you envisage for the whole 2025? I mean, do you expect the business to keep on growing this way? And do you confirm that it is not supposed to absorb cash basically?

The second one is on the U.S. Navy budget for 2026. They do not envisage to order further Constellation class frigate. So I was wondering, I mean, what's your reading of this also to, let's say, avoid interpretation that could be wrong? I think the Constellation is going well, but I wonder if you could comment on this.

And the last one is on the fiscal year '25 guidance for leverage. Is there a specific moving part, a specific assumption that led you to improve this guidance by EUR 300 million, EUR 400 million implicitly?

So on the cruise business, we are -- again, our business is not a business with ups and downs. So in particular, it is a direct function of the production curves of every project. So what is happening in the cruise, it is exactly what we have been expecting. it is perfectly in line with our budget, with our business plan and with our overall strategy. So there is no, I would say, acceleration in the growth. It is exactly the path that we have designed, and it is going exactly in that direction. So I don't see any jump in terms of revenues, and I don't see any, I would say, working capital consequent absorption. So it's absolutely the ordinary course of the ordinary projects according to the production curves.

Moving to the information about Constellation Class. As anticipated before, the new administration is looking into all the programs and is reviewing all the programs. And the aim of it is to relaunch and put the hands into the mechanism in order to improve profitability progress of the, I would say, U.S. Navy construction capabilities.

So the fact that the additional order of Constellation Class is postponed has no implication for us. It is simply the consequence of the new administration that is looking into programs and strengthening the different programs before then continuing on their strategic developments.

So it is the natural consequence of the change in the administration that is taking and is taking very seriously the acceleration. But first of all, they want the current contract to accelerate before enlarging the contract itself. So for us, this is not the point of having another order because we have plenty of Constellation Class already to order. We would like to participate to this new approach to shipbuilding in order to accelerate production.

So that's the focus of the administration. That's the focus of Fincantieri. So that's my comment. There is no negative reading. It is the other way around. It's a country that want to relaunch shipbuilding and wants to strengthen existing commitments before taking new commitments.

On the net financial position improvement, I think it is the, again, a natural continuation of the generation of cash that we have already recorded and experienced in the first quarter. So already in that occasion, we anticipated that in case this positive trend would have been repeated and consolidated, we would have adjusted the guidance accordingly. So that's what we are doing.

So it's the, I would say, let me say, ballistic continuation of the cash generation of the previous quarter that is leading us to a good improvement.

Okay. Very clear. If I may, just a follow-up on infrastructure, which is not a core business by the way. Is there any idea any chance that -- I mean, sooner or later, it will leave the company's perimeter. Any update on this?

Let me say, first of all, we are very satisfied with what we did in the infrastructure business. So after the offshore business, this is the second very evident turnaround we have achieved.

The company basically is delivering all the projects of the past, having suffered for losses. Let me mention, for example, the Miami terminal, which was delivered to MSC, and it has been a technical success because it's the biggest terminal, cruise terminal, ever built in the world. In geography, that is not necessarily easy to deal with when it comes to constructions because there is an issue in terms of availability of workers, subcontractors and things like that.

So let me say, the infrastructure business is leaving a very positive moment because they are leaving at their back the legacy of the past, and they are start to collect the fruits of a different business model, which we call derisking and partnering, i.e., to limit to the maximum extent the appetite for generic construction risk.

So it's not a generalist, it's a company concentrated on its own niche. Basically, they have 3 businesses. One is the business of hospitals, which is definitely a niche. The second is the business of certain kind of steel fabrication, which is needed, for example, for the construction of bridges. And the third core business is the marine works. So construction works at sea.

They are sticking to their niche, so not enlarging the appetite for different specialties and disciplines. And then they are partnering, not only derisking, but also partnering. So they are contributing consortia by consortia, consortium by consortium, those capabilities in larger consortium. So this business model is proving to be successful.

To get back to the -- to your point, in the next business plan, we will evaluate all the strategic options. Again, the company is strong, is on the safe side, is well balanced in terms of risk profile, is well equipped in terms of well-proven products. We are having some good synergies for the naval business because basically, they are very reliable at the moment of working on naval infrastructures, for example, naval bases, certain construction works and marine works for naval purposes, which is something that we are exploiting in a win-win setup with the Navy. But again, I believe that our restructuring is completed and the company is well equipped and best positioned to be self-sufficient economically and financially, which is, again, very important and very rare in the infrastructure business. And the company is ready to evaluate all strategic options with a very cold eye.

Sir, the final question is from Michele Baldelli of BNP Paribas Exane.

I have a few questions. The first one is more technical. If you can elaborate how much the PPA has contributed to the H1 depreciation and amortization, please?

The second one is on your arguments about the expansion of productivity in cruise and all the investments that you are doing and will continue to be doing. Is it something that will point to a potential increase of the deliveries per year in the next future, or shall we think about like just the value per shipment can increase?

And another question relates to the naval and underwater international awards. Do you expect them anything already by the end of this year? Or they are, let's say, probably expected more next year?

We cannot hear you answering.

Sorry, sorry, sorry. The mic was switched off. So on the PPA, on the purchase price allocation, I will leave the ground to Giuseppe.

On the productivity, the focus on our operational excellence is to improve the profitability. So productivity means a better use of the resources with benefits translating into margins and cash flows. So all the activities we are doing, for example, for minimizing low added value activity with the intense adoption of new technologies such as drones for internal logistics, rover and robots for internal logistics or what we are doing in terms of robotization of grindling, welding and other activities that are typically performed by workers, which is more and more difficult to train and to somehow recruit.

So this is the sense of the productivity is to improve profitability on the one hand and on the other hand, project the company in a long-term vision whereby if you want to be a manufacturer in this part of the world, you have to be a technologist.

On the naval underwater visibility for the future, there are programs going on. So Poland is one of them. There is Philippines. There are a number of other programs, for example, in Greece or in other geographies that are going to be on the market.

Let me say we are progressively experiencing growth in demand, obviously, our public administration kind of programs. So the decision process and the tender process, given the complexity of the asset and the nature of the owner, the process is slow, but it's well traced by us, and we are following every tender with a lot of commitment and positiveness.

Going back to -- Giuseppe here. Going back to your first question, it is in the range of EUR 12 million for the first half.

You said 12 what?

12, 1-2.

Okay. Perfect. And just as a follow-up, on the U.S. Navy and your presence in U.S., I have a comment then up to you if you can elaborate on it or not. But basically, my thought was around the fact that Saudi contract is closer, let's say, to the final part, U.S. Navy Constellation program is a slow to ramp-up, you have 3,000 employees. Can we say that basically the profitability in U.S. is, let's say, almost absent this year? And from there, there could be, let's say, improvement that probably the new business plan can detail more better than what you did today? Can you add something on it?

As I clearly said, the program is being under revision by the U.S. Navy, so -- which is positive because, again, all the programs of the Navy need to be reevaluated and reconfigurated. So I don't have any specific information to disclose, I don't have any specific concern to disclose. We are continuing our production. We don't have any reason not to imagine that this production will continue.

The asset, it's a very valuable asset. The market is a very valuable market. And 15 years of experience and 15 years of familiarity with U.S. systems is in itself a big asset. So I don't think that there are other information to disclose apart from our eagerness to contribute to this relaunch of the sector, again, capitalizing on what we have, which is the most or better one of the most modern shipyard in the U.S. associated with a very important program, associated with one of the most knowledgeable international shipbuilder that is committed to U.S. So I think it's definitely a source of upside for Fincantieri.

Sir, at this time, there are no more questions registered.

Thank you, ladies and gentlemen, for joining the call. Thank you, Pierroberto. Thank you, Giuseppe, for the presentation.

Thank you. Thank you for attending.

Please reach out to me and the IR team for any further follow-up questions. Thank you very much.

Ladies and gentlemen, thank you for joining. The conference is now over, and you may disconnect your telephones.