SANLORENZO S.P.A.: THE MANAGEMENT PRESENTS THE 2023-2025 BUSINESS PLAN APPROVED BY THE BOARD OF DIRECTORS

Sustainability at the heart of the strategy, in a path towards carbon neutrality.Expansion of production capacity and development of new sustainable high-tech models.Strengthening in direct distribution, supply chain and service offerings.

THE TARGETS OF THE PLAN

• High single-digit CAGR over the three-year period
• Increase in EBITDA margin equal or greater than 19.5% in 2025
• Investments of €143-155 million over the three-year period, to support organic growth net of any extraordinary transactions
• Net cash position of €185-205 million in 2025

The management of Sanlorenzo S.p.A. (“Sanlorenzo” or the “Company”) presents the 2023-2025 Businss Plan approved by the Board of Directors to the financial community and the press, during the event “Road to 2030: Sanlorenzo’s responsible growth” in Milan at Palazzo Mezzanotte (Piazza degli Affari, 6).

Massimo Perotti, Chairman and Chief Executive Officer of the Company, commented:

«Today, Sanlorenzo presents its 2023-2025 Business Plan in light of the extraordinary results of the previous three years, which saw a compound annual growth rate of 17.6%, a doubling of EBITDA, an increase of 310 basis points in the EBITDA margin, net profit almost tripled, over €100 million in cash generation, even with the distribution of dividends for about €31 million.

At the time of listing, we promised “measured growth”. We intend to keep the same promise pace for the next three years, while always delivering better-than-expected results to our shareholders. To support the Plan, we have identified the pillars, summarised in our “Road to 2030”, that will see us pioneer in the path towards carbon neutrality, also thanks to the agreements with the world’s leading energy and E-fuels players able to revolutionise the paradigm of the yachting. At the same time, the values of our business model, whose effectiveness and resilience are proven, will remain firmly present. We confirm our focus on constantly improving margins and progressively increasing cash flow, which will allow us to seize the opportunities that the market will present, in strict coherence with our positioning.

We are well aware that expectations are very high and we will therefore spend all our energy to continue to reward the trust that our shareholders and all stakeholders have placed in our project.

THE 2023-2025 BUSINESS PLAN: THE PILLARS OF THE “QUIET LUXURY” OF SANLORENZO

1. SUSTAINABILITY AND TECHNOLOGY, FOR A NEW PARADIGM IN YACHTING

The first pillar of the Plan concerns the development of innovative technologies for carbon neutral power generation. In this field we are moving forward through collaboration agreements with the world’s leading energy and E-fuels players, agreements that will revolutionise the entire nautical industry.

The route mapped out in the “Road to 2030” strategy will lead us to launch in 2024 the first 50Steel equipped with methanol fuel cells to power all on-board services, and then, in 2028, to the launch of the first superyacht 50Steel powered solely by methanol, the ultimate goal for Sanlorenzo and a true response to the nautical sector’s demand for carbon-neutral on-board power generation.

Indeed, the generation of the power necessary for sailing at maximum speed will no longer be tied to the use of diesel engines powered by fossil fuels, but will be based on a combination of fuel cells and internal combustion engines powered by green methanol. In parallel, in the <24m segment, two revolutionary Bluegame projects based on the use of hydrogen are advancing: the BGH tender, chosen by the New York Yacht Club as the “chase boat” to accompany American Magic during the 37th America’s Cup to be held in Barcelona in 2024, and the subsequent BGM65HH (hydrogen-hybrid). BGH, to be launch in June 2023, is the ultimate expression of sustainable technology: the 10-meter yacht will reach the speed of 50 knots and a range of 180 miles at zero emissions, being driven exclusively by hydrogen fuel cells, combined with foils. The same ones that will be installed in the BGM65HH multihull combined with the new generation of Volvo Penta hybrid engines, at an advanced stage of design, for which Sanlorenzo was chosen as pilot shipyard.

2. DEVELOPMENT OF NEW MODELS

The intense activity of the R&D department finds concrete application in the design of the new models, which express the maximum possible technological innovation, while remaining faithful to the strategy defined almost ten years ago: innovation within tradition, with the constant search for balance between the drive to introduce new ideas and consistency with the brand’s history. Starting from the timeless design that made Sanlorenzo yachts iconic.

The Plan envisages the introduction of new ranges with the entry in different segments, such as the multihull, and at the same time an enrichment of those in the portfolio, increasing the number of models from the current 26 to 36, of which 17 in the Yacht Business Unit, 8 in the Superyacht Business Unit and 11 Bluegame.

3. high value service OFFERINGs to CUSTOMERS

Offering high value-added services to customers represents a strong competitive advantage for Sanlorenzo’s value proposition, increasing customer loyalty and strengthening the brand’s positioning at the very top of the luxury segment.

The Plan envisages the strengthening of a premium package including: the Sanlorenzo Charter Fleet, the world’s first single-brand charter fleet; the Sanlorenzo Academy for crew training; targeted forms of leasing/financing and insurance; maintenance and refitting and restyling services.

Refitting represents a high-potential upside of the Plan, considering that the worldwide fleet of yachts >30m is steadily increasing (amounting to 5,396 units in 2021) and the refitting market is expected to grow further, as it did from 2017 to 2021 with CAGR +16.4% for >40m yachts.

4. direct global coverage strategy

One of the founding elements of the Sanlorenzo business model is represented by the distribution strategy that provides for direct presence in key strategic markets.

The Plan envisages the implementation of this strategy, with the opening of single-brand offices, in addition to those already existing in the Americas and the Balearic Islands,  in EMEA (Monaco and Côte d’Azur) and APAC. For the latter market in particular, the acquisition of Simpson Marine, a network of 12 showrooms and 10 service centres covering the entire Far East, is expected by the first half of 2023.

5. INCREASe in PRODUCTION CAPACITY AND ACQUISITIONS OF STRATEGIC supply chain PLAYERS

The current production capacity of Sanlorenzo is equal to 100,000 square metres, 79% of which is currently utilised. The Plan envisages to expand capacity by 25% by 2025, taking utilisation to around 85%.

For a possible upside of 20% of the production capacity, the necessary areas are already available to the Company.

Furthermore, the investment strategy aimed at vertical supply chain integration with partnerships and minority stakes in strategic suppliers will continue.

TARGETS

For the three-year period 2023-2025, the Company expects to see a high single-digit CAGR, starting with a forecast for 2023 between €810-830 million, up 11% from 2022.

The Group’s margin is expected to increase significantly and progressively, with an EBITDA margin equal to or greater than 19.5% in 2025, compared to 17.6% in 2022. The forecast of the net financial position is between €185 million and €205 million, with cash generation of over €100 million.

The Plan will be supported by investments focused mainly on the research and development of new high-tech models and the increase of production capacity. Investments of €143-155 million are planned over the three-year period.