TISG: the board of directors approves the consolidated financial report

The Italian Sea Group S.p.A. (“TISG” or the “Company”), global operator in luxury yachting with the brands Admiral, Tecnomar, Perini Navi, Picchiotti, NCA Refit, and Celi 1920, announces that the Board of Directors, in today’s meeting, has approved the Company’s Draft Financial Statements for the Financial Year ending on 31 December 2023, drafted according to IFRS international accounting standards.

Giovanni Costantino, Founder & CEO of The Italian Sea Group, stated:
“The results approved today by the Board of Directors once again confirm our strength and flexibility, which have allowed us to successfully face a year characterised by an uncertain macroeconomic and geopolitical landscape. We have operated in a challenging environment, proving determination, vision, and ability to overcome the many exogenous difficulties.

We have continued to meet the market’s expectations, reaching a new goal of Revenues for EUR 364 million, an EBITDA Margin of 17% – well over the guidance we announced at the beginning of the year – and a Group Net Income for EUR 37 million, growing by 54% versus the previous year.
In light of the deliveries scheduled in the following years and all the exciting future prospects, last February 7th, in occasion of our second Capital Markets Day, we have announced to investors and the financial community our Strategic Outlook for 2024 and 2025. The growth expectations are extremely solid and reflect our confidence in the path we have outlined and the opportunities that the international landscape holds in store for us.”

ANALYSIS OF THE ECONOMIC AND FINANCIAL RESULTS CONSOLIDATED REVENUES
The Italian Sea Group’s consolidated results for 2023 show Revenues equal to EUR 364.5 million, growing by 23.6% versus EUR 294.6 million recorded in 2022. Operating Revenues, equal to EUR 360.2 million, increasing by 23.6% versus the previous year, are broken down as follows:
• Shipbuilding Revenues amount to EUR 318 million as of 31 December 2023, increasing by 25% versus EUR 255 million recorded in 2022. This result is attributable to the regular progress of the yachts under construction and the signing of new contracts for projects in the larger dimensional range;
• Refit Revenues amount to EUR 42 million as of 31 December 2023, increasing by 17% versus EUR 36 million recorded in 2022. This increase is due
to the utilisation of additional production capacity from investments completed at the beginning of the year.

BACKLOG
The total value of the Order Book, relating to the gross value of existing contracts for yachts not yet delivered to clients, as of 31 December 2023 is equal to EUR 1,265 million. The total value of existing contracts for yachts not yet delivered to clients, net of the revenues already recorded in the income statement (Net Backlog) as of 31 December 2023 is equal to EUR 609 million. Currently, there are 34 projects under construction: 24 mega and giga yachts e 10
Tecnomar for Lamborghini 63, with deliveries scheduled until 2027.

CONSOLIDATED EBITDA
EBITDA is equal to EUR 61.9 million, growing by +31.6% versus EUR 47.0 million as of 31 December 2022 and with an EBITDA Margin equal to 17.0% versus 15.9% in the previous year, exceeding the guidance communicated to the market.
The increase in marginality over time is attributable to: (i) a strong attention to operating cost management; (ii) an improved efficiency of production processes; (iii) benefits coming from the expansion in production capacity with an optimal mix between Shipbuilding and Refit activities; (iv) internalisation of key supply chain activities, also following the acquisition of woodworking company Celi 1920; (v) an increase in sale prices, due to a constant improvement in the recognition of the Company’s brands from owners and brokers worldwide; and (vi) economies of scale.

CONSOLIDATED EBIT
EBIT as of 31 December 2023 is equal to EUR 50.5 million – an increase of 35% versus the previous year, when it was EUR 37.0 million – with a margin on Revenues of 13.8% after amortisation, depreciation, write-downs, and capital losses amounting to EUR 11.5 million as of 31 December 2023.

CONSOLIDATED NET INCOME
Consolidated Net Income as of 31 December 2023 is equal to EUR 36.9 million, increasing by 54% versus EUR 24.0 million during 2022.

INVESTMENTS
Throughout the year, TISG carried out Investments equal to EUR 10.9 million, mainly related to the restart of the Perini Navi hub in Viareggio and to interventions on the production capacity of Celi 1920; for the expansion of the latter, the Company acquired two new sheds, reaching a total surface of approximately 30,000 square metres of facilities which will allow TISG to internalise up to 70% of its production needs for wooden furniture activities.

CONSOLIDATED NET FINANCIAL POSITION
Preliminary Net Financial Position as of 31 December 2023, drafted in accordance to IAS/IFRS accounting principles, is positive for EUR 2 million versus a negative Net Financial Position of EUR 11 million at 31 December 2022. This result reflects:
i) Cash out for EUR 14.4 million for dividend distribution;
ii) Investments for the year equal to EUR 10.9 million;
iii) The disposal of an office building inside the Viareggio shipyard, generating a net cash inflow of EUR 10.6 million.

Net Financial Position includes the current value of the fees for the state concession on the shipyard, in accordance of IFRS 16. The Net Financial Position will be updated for the state concession on the Marina di Carrara shipyard from 2043 to 2072.

2024-2025 STRATEGIC OUTLOOK
Strategic Outlook for 2024-2025 forecasts a significant organic growth and benefits from the current structure of the Group and the important support due to the integration of Perini Navi and its assets, the important partnerships signed with luxury brands and the capillary sale structure with a global perimeter.

The Group’s growth objectives expect: Revenues between EUR 400-420 million and an EBITDA Margin between 17-17.5% in 2024 and Revenues between EUR 430-450 million with an EBITDA Margin between 18-18.5% in 2025. With respect to the capital structure and the dividend policy the objectives for 2024 and 2025 are to maintain a neutral financial position, with maximum leverage of 1,5x EBITDA, and to distribute a yearly dividend which equates to a payout ratio between 40- 60% of the Net Income of the Group. These objectives are subject to temporary impacts
related to the CapEx and M&A strategy.

BUSINESS OUTLOOK
Market leader in the reference segment The Italian Sea Group continues its establishment as a market leader in the luxury yachting segment on a global scale, in particular in the segment of yachts over 50 metres, the Company’s core business.
The success of 75-metre mega-yacht Admiral Kenshō awarded “Motor-yacht of the Year” at the 2023 World Superyahct Awards, shows the strength and recognition of TISG’s brand positioning on the yachting industry worldwide. This positioning has been further strengthened by the Company’s presence at the Monaco Yacht Show in September 2023.

TISG’s commercial strategy in the reference markets, thanks to the collaboration with the leading sector brokers, allowed the Company’s brands to express their full potential in markets which have large opportunities for growth, such as the Americas and, most recently, North Africa with the Tecnomar for Lamborghini 63 project.

In line with this global expansion, in March 2023 TISG announced a strategic partnership with BehneMar Yachting Consultancy, aimed at representing the Group’s brands in the Middle East and North Africa (MENA) area, thanks to a sustained brand awareness program, in line with the objective of strengthening the capillary sale structure in the
region, which is steadily expanding in terms of demand for custom yacht and super yachts.

Completion of investments in production capacity
In 2023 TISG completed the “TISG 4.0”, “TISG 4.1” and “TISG 4.2” investment plans on the facilities in Marina di Carrara and La Spezia, which have benefited both the shipbuilding and refit divisions.

In April 2023, following the acquisition of Celi 1920, the Company has carried out interventions on the facilities of the subsidiary to double its production capacity in order to internalise the majority of woodworking activities.
During the Company’s second Capital Markets Day, on February 7th 2024 at the Armani/Silos in Milan, the Company detailed the main characteristics of its production capacity, with shipyards in Italy and facilities in Turkey, where it operates on 7 shipyards managed by established strategic partners, under the supervision of an internal team.

2024 deliveries and new projects
During the Capital Markets Day on February 7th 2024, The Italian Sea Group defined the timeline of the six deliveries scheduled within the end of 2024:
• Two 78-metre Admiral mega-yachts Admiral di 78 metri, full custom, designed in collaboration with two leading sector archistars, Sinot Yacht Architecture & Design and Lobanov;
• A 72-metre Admiral | Armani mega-yacht, the first one designed entirely in collaboration with Giorgio Armani, both in the interior and exterior lines;
• A 67 metre Admiral motor-yacht, full custom, with interiors by architect Mark Berryman;
• A 55-metre Admiral motor-yacht based on the popular Admiral S-Force model, the third in the line, entirely designed by TISG’s Centro Stile;
• A 60-metre Perini Navi ketch, naval architecture by Ron Holland and interior design by Remi Tessier.
Furthermore, TISG announced the plan to expand its commercial strategy introducing new semi-custom projects up to 50 metres. The presence in this market segment will allow TISG to decrease delivery times in comparison to full-custom mega-yachts – which will remain the Company’s core business – attracting a wider range of customers and, at the same time, will allow to exploit the large production capacity without impacting or weighing on engineering capacity, which will remain focused on the core business.

Sustainaibilty
Throughout 2023, TISG implemented its ESG plan for the reference year, reaching its defined objectives. The main drivers of its ESG strategy have been the commitment to reduce the environmental impact and the improvement of social responsibility: decarbonisation, sustainable supply chain management and employee welfare and growth. The achievements of these objectives allowed TISG to obtain an ESG rating of BBB, in the high-performance range, issued by Cerved Rating Agency.

PROPOSAL OF PROFIT ALLOCATION
The Board of Directors has resolved to propose to the Annual General Meeting the payment of an ordinary dividend, for the 2023 Financial Year, for EUR 0.37 per share. The total of the dividend, for EUR 19.6 million, corresponds to a pay-out of 53% of the Consolidated Net Income (+36% versus 2022 dividend). Where approved by the AGM, the ex-dividend date will be on May 20th, 2024, record datewill be on May 21st, 2024 and the payment will be on May 22nd, 2024.

CONSOLIDATED NON-FINANCIAL REPORT AT 31 DECEMBER 2023
The Board of Directors has examined and resolved to approve the Consolidated NonFinancial Report as of 31 December 2023, in compliance to Legislative Decree 254/2016. The Consolidated Non-Financial Report, drafted according to the Global Reporting Initiative Standards (“GRI Standards”), summarises the Group’s commitment towards Environmental, Social, and Governance (“ESG”) issues throughout the financial year, and proposes a long-term sustainability plan with the purpose of creating value to all of its stakeholders.

VERIFICATION OF THE INDEPENDENCE OF THE MEMBERS OF THE CORPORATE BODIES
In accordance with the provisions of the applicable law and the Corporate Governance Code, the Board of Directors evaluated the independence of Directors Antonella Alfonsi, Laura Angela Tadini, and Fulvia Tesio, appointed by the Annual General Meeting on 27 April 2023. On the basis of the evaluations carried out by the Board of Directors with reference to the information provided by the aforementioned Directors, the latter have been found to be in possession of the independence requirements ex art. 148, third paragraph, as recalled by article 147-ter, fourth paragraph, of the Italian Legislative Decree 58/1998 (“TUF”) and the Corporate Governance Code.

Furthermore, the Board of Statutory Auditors has verified that all its standing members possess the independence requirements provided for by law and the Corporate Governance Code, and has informed the Board of Directors, which has acknowledged the results of the verification carried out by the Board of Statutory Auditors regarding the possession by the standing auditors of the independence requirements provided for by law.

DECLARATION EX ART. 154-BIS, SECOND COMMA, T.U.F.
Pursuant to the Consolidation Act, section 154 clause 2 bis, of the D. Lgs. n. 58/98, as subsequently adjusted (TUF), Mr. Marco Carniani, the Manager in charge of preparing the corporate Accounting Books, herewith represents that the financial information contained in this Press Release conforms with corporate accounting documents, records, and books.
The following document contains forward-looking statements related to future events and operational, economic, and financial results of The Italian Sea Group S.p.A.. Such forward-looking statements, by their nature, contain an element of risk and uncertainty, as they rely on the realisation of future events and developments.