Fincantieri S.p.A. (FCT) Earnings Call Transcript & Summary

Good morning. This is the Chorus Call conference operator. Welcome, and thank you for joining the Fincantieri 2019 results conference call. [Operator Instructions] At this time, I would like to turn the conference over to Mr. Bono, Chief Executive Officer. Please go ahead, sir.

Thank you. Good morning, ladies and gentlemen. I confess my total discomfort to comment on the result of last year while all the world is fighting to face an apolitical disaster. I wanted to look my speech to give you some message about our view of the future of our company. And we give you the actions that we are implementing to assure to our company, to the future of our development. Our first priority is our people, and we are taking the every possible action to protect the health of our employees, our most important asset. Since March 16, we suspended all activities in our Italian shipyard, and we are actively organizing to efficiently resume the operation when the time is right. They say the cruise sector is one of the most impacted, with cruise operators having to stop all operation. We are focusing on implementing all necessary actions to preserve our backlog. This is fundamental, not only for us and our suppliers, but also for the recovery of the national economy. We are cautious that we will register in the future a delay of delivery. At the same time, we are doubled our efforts to effectively take the opportunities we now have, where the pressure on our backlog is a little longer. In this context, we are working on the FFG [indiscernible] in the U.S. We trust that our offer for the big well operated by the U.S. Navy in the next future. We also continue to pursue a diversification strategy in key technology, areas like electronics and infrastructure. Here, we show the -- our support on the [ sector ] which is a fraction over the [indiscernible] in Genoa. I am [ returned ] to affirm that we are able to respect the strict time line the authorities set up for the project. This fact set gives us confidence to present Fincantieri as one of key players or [indiscernible] of the [ economy ] in the countries where we work, most of all, in Italy. And we are starting a lot of other project in this direction. It is clear that in this moment of deep emergency, our beloved country is counting on the companies such as our [indiscernible] secure work with the recovery of the economy to put the Italian industry back on track. In fact, government authorities and also the European Commission already announced the initiative of protecting strategic industries in this unique moment of uncertainly, we believe not to step back. With the excellent performance of the Fincantieri, today our financial position is sound and firm, hoping that the pandemic will be solved in brief -- in reasonable time. We are set to come out of this crisis stronger than ever, as we have done in the past. We are all aware that this situation is causing the tough change in the global economy and the industries worldwide. We also believe that the company with the long-term view and visibility such as Fincantieri are best positioned to overcome the crisis and guide the recovery. So further also, President Draghi in the famous interview at the Financial Times, the situation in fact clearly shows the importance of the long-term sustainability of the business which should be very quickly evaluated by our shareholders. Once again, I want to thank our talented people, years of commitment and hard work brought us to become a leader that is more important in the market. There are no challenges ahead. And last, that we will overcome with pride and the unity in order to continue to develop the company. Here -- I want to stop here and wish you for the future, health and prospect. Moving forward. We are here today to present the result of the last year and will leave the floor to Mr. Maestrini for that. Thank you.

Okay. Good morning, ladies and gentlemen. Thank you, Dr. Bono, for your words. I'm now going to give you an overview of Fincantieri's performances in 2019. I'm confident that the results we achieved in Italy, together with the initiatives implemented during the year, and our long-term view set our path ahead to better operate in the wider picture of this worldwide crisis and come out stronger. In 2019, once again, we achieved an excellent commercial success. For the fifth year in a row, the value of new orders exceeded our revenues. We acquired new orders for the outstanding number of 28 new vessels, 13 of which are cruise and is one of our most precious assets, ordered by 6 different brands and 5 naval vessels within the U.S. market. Our total backlog includes now 109 ships and reaches the level of almost EUR 33 billion, almost 6x our revenues, securing work until 2027 for all our shipyards and suppliers. And as Dr. Bono said before, this is our most precious asset, which we commit to protect at whatever cost. We're also very proud for the creation of almost 600 direct jobs and 2,700 indirect jobs which demonstrates our pivotal role in the economic recovery, not only for our country, but also for the countries in which we operate. Fincantieri would therefore be instrumental to any recovery plan in Italy and these countries. As for our industrial performance, we reaffirmed our thriving operational track record with the delivery of 26 vessels from 12 different yards. As for the financial performance, we're very happy for the performance of the Italian operations and Fincantieri S.p.A. The parent company achieved an impressive set of results. Revenues for EUR 4.3 billion and EUR 489 million in EBITDA, reaching a net profit of EUR 151 million. On the other side, the negative performance of Vard has significantly affected our consolidated results. We started implementing the restructuring plan for our subsidiary following the delisting in December 2018, aimed at margin recovery in the medium term. This plan is now in full execution. However, in 2019, the weight of the subsidiary losses on the group profitability were still quite heavy. On consolidated level, our revenues increased by 8%, to EUR 5.8 billion, and we registered EBITDA for EUR 320 million, negative adjusted net result of EUR 71 million, and a negative net result of EUR 148 million including losses from discontinued operations of EUR 24 million, extraordinary charges of EUR 67 million and taxes for EUR 73 million. From a strategic standpoint, 2019 was quite a productive year. We accomplished significant milestones by finalizing the joint venture, NAVIRIS, with the French Naval Group. The joint venture is today fully operational and it will be the means to strengthen the cooperation among the 2 groups and a key for a more efficient and competitive European Naval industry. This cooperation, which can count on a full support by the French and Italian governments, plays a strategic role in the consolidation of the European Naval sector, offering its position as worldwide leader in product performances and technology innovation. As for Chantiers de I'Atlantique 5, during the last years, we actively collaborated with the EU Antitrust Authority which was scheduled to rule on April 17. However, the investigation has been suspended for the time being. I must emphasize, however, that our business is strong and solid, and does not depend on this transaction being successful. Furthermore, we boosted our growth strategy in high-technology activities, and we continue to develop our IT and electronic excellence center through the acquisition of a controlling stake in Insis S.p.A. This acquisition will allow us to create synergies within the group, expand the range of our technological competencies and accelerate the development of new technologies which we will be applying to both the defense and cruise industries. As for Vard, as mentioned earlier, we are executing the restructuring plan. As you know, we have made -- we have changed the management right after the delisting, and we have started reviewing the industrial management system and economic planning of the subsidiary. In fact, the review resulted in the change of cost of completion estimates for several projects, both in cruise and offshore and special vessels and heavily impacted our 2019 full year results. We also closed 2 shipyards and changed the commercial strategy of the company, which is now focusing on high-quality orders aimed at reducing backlog complexity in diversified segments. In fact, we exited from the small fishing and aquaculture support vessels business, which we will see reported as a discontinued operations. During 2019, we also achieved the important objective for our sustainability plan, ranging from environmental matters to supply chain, human rights, health and safety as well as sustainable design. In the light of our commitment to sustainability, we opted to join the United Nations Global Compact, the most wide-ranging business sustainability initiatives in the world. We are in fact, the largest ship builder and the first in this sector to commit to promoting the 10 principles related to human rights and labor environment and fight against corruption. Now I leave the floor to our CFO, Mr. Giuseppe Dado, to take you through the numbers. Thank you.

Good morning, ladies and gentlemen. We move on to the presentation and after Page 5 and 6, in which you can appreciate our new orders, the depth and diversification of our orders acquired in 2019 and 26 ship deliveries from 12 shipyards in Page 6 for 2019. We move on to Page 8 and discuss order intake and backlog, which was robust at almost EUR 9 billion, and this is for the fifth year in a row, we've had orders higher than revenues. This took total backlog at almost EUR 33 billion with a hard backlog at EUR 28.6 billion and composed by 98 new vessels to be delivered after 2027, plus the soft backlog of EUR 4.1 billion. As Mr. Bono mentioned earlier, of course, it is now our priority to preserve this backlog in the context of the pandemic emergency that has bursted in the early months of 2020. We believe, and that the protection of the employment and of the production capacity that this workload underlies are the main drivers for the recovery of the global economy and of the recovery of the company and the sustainability of the company's business. The shipbuilding backlog is up 13.1% versus last year. Of course, as expected, that the backlog in the offshore business is down, and we have a slightly upwards move of the backlog in the equipment systems and services by 6%. As far as the backlog deployment goals in Page 9, again, long-term visibility. We have 26 units delivered in in 2019. We have 98 units in the backlog with visibility up to 2027 for both the cruise business, 46 vessels, and the naval business with 37 vessels. In the offshore, 15 vessels in backlog with deliveries up to 2024. And please, as far as the offshore backlog note that we have announced a very important order in the fishing sector yesterday. Revenues, Page 10. Revenues reached a record level of EUR 5.8 billion, as we said before, plus 8% versus last year. And it is mainly thanks to the significant contribution of the shipbuilding segment, almost plus 9% year-over-year. And on the back of increased volumes, both in Italy and at Vard. We had also remarkable growth in the Equipment, Systems & Services, plus 38.1% versus last year. And of course, the growth in these 2 segments was partially watered down by the scarcity of orders in the core offshore market. And this has caused a revenue reduction in the offshore segment by almost 30%. A few more comments on EBITDA. The group closed with an EBITDA of -- at EUR 320 million, and a margin of 5.5%. And this is, as mentioned before, a result of the excellent profitability of the Italian shipbuilding activity that was, at the same time, diluted by the negative contribution of Vard Cruise, where, as we said already in November on the occasion of the third quarter results, we completed the review of several projects, and we believe that the review and the reorganization of Vard, at least the first stage of the reorganization, is completed and hopefully, will start a slow recovery. The offshore EBITDA was, for the same reasons, negative at minus EUR 107 million, EUR 107 million. And the Equipment, Systems & Services had a positive EBITDA of EUR 90 million, with an increase of over 20% versus last year. Going through the net results. I may add something more with respect to what Mr. Maestrini said before. Please note that again this year, we had a very high number of charges for asbestos-related claims at EUR 40 million. And this has further contributed to the results that we achieved this year. Page 13, Capex. The high-level CapEx we had in 2019, EUR 279 million, of which EUR 218 million tangible CapEx, is -- were mainly dedicated to the expansion of Italian yards production capacity for preparing the yards for the construction of larger and more valuable vessels. And also, we, for the improvement of safety, environmental conditions in the Italian and Romanian yards. Also, we had some CapEx to improve the production capacity of the main of our remaining yards, the Tulcea yard, which has increased its capacity in a year from 2,500 tonnes per month, end of last year -- end of 2018 to 3,500 tonnes per month at the end of 2019. Net working capital. As of 12/31/2019 was negative and minus EUR 125 million. Of course, we had an increase in work in progress and on the asset side of the net working capital. You -- I have to remind you that in the first 2 months of 2020, we delivered 2 cruise vessels. So those 2 cruise vessels were in the net working capital -- in the asset side of the net working capital basically fully built and basically all the value of the asset was there. Of course, this increase was partially offset by the increase of trade payables and construction loans. Net financial position. Again, the increase in net debt was mainly related to the CapEx program we had and to the net working capital dynamics that are typical in our business. Let's move to the outlook, which is very important. Since the outbreak of the COVID-19 emergency, this has posed a major threat to national health care systems, to the social well-being of -- and to the global economy as a whole. Of course, government authorities have undertook strict countermeasures and lockdown protocols. In this emergency, we are, as Mr. Bono said, chiefly concerned with protecting the health of our employees and subcontractors. And this is also why the -- from March 16, operations have been suspended in all of the Italian sites. Alongside these content measures, Fincantieri's management is actively involved in the daily monitoring of the evolution of the emergency, and this is in order to ensure a proactive supervision of its potential effect. Although the consequences of the production halt are yet really difficult to quantify in terms of the impacts on the group's activities, they are likely to arise in connection with production schedules, the management of the supply chain; of course, HR; the CapEx program, which, of course, was put under review; and commercial negotiations. Of course, that -- provided that the cruise tourism is one of the most affected sectors in -- and the cruise operators basically were forced or voluntary stopped their operations. Fincantieri at this moment and in the near future will be committed to support its customers and its strategic partners with whom we have had a very long-term relationship. And this is in order to protect and to confirm our backlog. As we mentioned before, we believe that maintaining the workload is one of the key elements to drive the -- of course, the economic recovery through the protection of employment and production capacity. We think that we have a key role in this matter. At the same time, we are doubling our efforts to effectively secure new opportunities in the naval business, where risks for activity interruptions and the risk on the client side, of course, are much lower. And as you know, and it was mentioned before, we're working on several negotiations, including several projects, including the FFG's tender in the U.S. Our shipyards, as a matter of fact, in the United States, are still open and operating, given the strategic interest for the U.S. government. We also continue to pursue our diversification strategy. We have -- which has proven to be fundamental in the current context in key areas such as electronics and infrastructure that we know all mentioned before. And as we said before, to the extent that the situation stabilizes within a reasonable time, the financial structure is adequate to cope with the effects of this emergency. As soon as the situation and the developments of the emergency allow a clear analysis of the impact of the situation, the company will finalize a new business line. And of course, we will promptly communicate to the markets. Now we are ready to take questions.

Hold on. Hold on, Bono speaking. I wanted to underline that our balance sheet is clean. Our equity is clean and we -- to take the result of Vard as anticipated in the current quarter. I think that I can tell you that Vard won't be a problem for the future. Thank you.

[Operator Instructions] The first question is from Monica Bosio with Banca IMI Intesa Sanpaolo.

I have 3 questions. The first one is on Carnival. On the back of Carnival's difficult situation, could you comment on the state of the art of your backlog with Carnival? How many Carnival ships have you in your backlog and when do you expect to deliver them? And just -- if -- please, can you comment on, I know it's difficult, on potential orders or option cancellation maybe for the ships that have not yet received financing? And the second question is on the operations. You have completed the step 1 for Vard cruises. In 2020, I mean in Fincantieri will have to face with extra costs related to the COVID outbreak. Let's taking apart this extra costs that are not yet quantifiable. On top of this, do you expect to revise for the completion cost of Vard cruises programs? And as for the offshore, should we expect a further loss in 2020? I remember that the company was committed to the better [ even ], but now the situation has completely changed. So I'm just asking.

The Carnival, I think that the situation of the line of company is very critical only to the view of liquidity in this moment because they are not -- the anticipation of the new passenger. If we know the ships are stopped in the port. And for that, we are working with our client who arrange the action that can assure as to minimize the impact of the crisis. We cannot completely blame a postponement of some payment in this year. It's not a big amount to postpone the delivery of the ship. It's a lot only because of that. It's a problem of the sector. I think that Carnival is the first operator in the world. And now it's capacity to manage the company, I think that this action, to have a lot of money to save the decline, is a positive signal for the sector. I wanted to -- okay. For the next question -- the other question, I invite Maestrini to answer.

Okay. I will step in for Vard. For Vard, as I said before, we are now in full execution of our restructuring plan. And as you know, that has taken 2 direction. One is the restructuring or restructuring of the production capabilities. So now we have shut down 2 shipyards and also, we are reviewed all the internal practice to align them to Fincantieri standard. On top of that, we have reviewed our strategy on -- in the market. And as announced before by Dr. Bono, we have -- we are taking orders of high quality and a specific project in the big fishery vessels where we can't be profitable. Therefore I'm confident to say that the problems that problems we are seeing in 2019 have now been fully overcome. Of course, we are still evaluating the impact that the pandemic crisis will have on all our operations.

And that's for the offshore?

Yes.

Okay. And...

In the offshore I can say -- I can have some continuation. It's [ certainly ] true that the oil platform in this moment are not good. But in there, see there are other platform. The [indiscernible] platform, and we are working to -- Vard are working for a new ship to give to the operator of this sector, the right ship that they need.

The next question is from Matteo Bonizzoni with Kepler.

I have 2 questions. The first one is to check if my interpretation on your statement is correct. So basically, you are saying that your priority is to protect the backlog. So basically, the scenario that I am imagining is one of leakage of delivery, because it's clear that several of your customers are facing a liquidity crisis. So what I would expect is on one side, a decline of the order intake for some quarter. And on the other side, a request for reschedule, postponement of delivery. As regards cancellation of order, is it something that you see, that you consider as a possibility? And can you elaborate a little bit more on the structure of your contracts and guarantee in case you should face cancellation? And can you remind us if, for example, in the previous crisis, you faced a leakage of delivery, so postponement or cancellation? This is the first question. Then the second question is on your debt structure. I remember that some years ago, you did not have any covenants on your debt line. Is this still true? And then if you can elaborate a little bit more on the refinancing needs that you face over the next 12 months. So the structure of your debt, the short-term and the long term? And on the availability of lines -- of credit lines that you have not yet utilized?

Okay. For the first question. This is the problem. We have to avoid the cancellation of orders because the cost of a cancellation is too big also for the company who usually have the contract to protect us for economic and the financial that we have spent until the cancellation. This is, in my view, is in this moment, we are fighting it to avoid the cancellation. And in this moment, I am confident for the next closure if then the restart is in a reasonable time. [ Global delay ] is a problem. It's a problem because of the delay of the whole delivery -- [ We have ] the necessity to modulate the productive program. The investment in new assets and for that we are working to minimize the impact on economic and the financials. But I see it that -- we see us it is not a good year and I hope that we can see, to look forward after the next years -- at the half year to have a normal situation. I want to tell you that it's an extraordinary situation. The company and the plane -- the airline has declared at this moment, $40 billion that they released [indiscernible] their capacity. For the first time, yesterday, the commission of declared that in Europe, it has to protect its industry. It's a good sign for me. Because in the last 12 years, after the financial crisis of 2008, in Europe and in here you are speaking only of the financial and you forgot the real economy. Now this is a time to look at the real time. If the government want to give to the people, the possibility to have life, it is very important that they help -- to have the possibility to start. This is the very problem. It is not a people problem because there is no important condition to start not only for the market but also for the organization of our activities. For that, I think that the government -- the Italian government, the European resolution and the European Union can build great liquidity and that is necessary to restart the economy or the right will resist. The faster work than coronavirus activity. Or the start of it. But I think that the world will change, will change deeply in the future. And we have to prepare our style of life, our capacity to put in place the actions that have the possibility to start with a new model of its own. I think that this is the very, very challenge for the future. Many [Foreign Language] and many politicians I think that step-by-step are understanding is it very challenging for the future. And that we have to see it now how we have to operate for the future.

Matteo, Giuseppe Dado. Question #2, no covenants, okay? And in terms of refinancing, we do have some small debt expiring this year/next year, like in the range of EUR 100 million. The big chunk of the refinancing that we have is on 2023. As you might remember, in 2018, we refinanced the unrated bond that expired at the end of 2018 with a basket of long-term bullet loans expiring in 2023, and that is where the big chunk called our short -- or our long-term debt, sorry, is positioned in some -- in terms of the expiry dates. And as with the short-term financing needs, we have plenty of short -- we have a basket of diversified credit lines that allow us to cope with the moment even under very stretched and stressed cash inflows scenarios, let me put it this way.

Yes. Sorry, Giuseppe. Just a follow-up. Do you expect a significant working capital outflow because of this situation in 2020?

Well, yes and no. I mean, on one extent...

This is me, Dado. We put in place whatever it takes. But now, we have noticed an extraordinary [indiscernible] extraordinary operation.

Matteo, I was saying, yes and no, to -- because on one side, we may have -- we may not have inflows that we expect. On the other side, of course, with the reduction of the activity, we expect outflows also decrease. So...

The next question is from Emanuele Gallazzi with Equita SIM.

Just 2 very quick questions. And the first one is just still on COVID-19 impact. Can you give us, say, more indication on what you can do on the cost side and even on cash management, even in terms of CapEx? And the second one is on the naval segment. What kind of impact do you expect from COVID-19 on the next tenders, if any? And let me say, do you expect delays in the award of the contracts or not?

Alberto?

Okay. On -- let me start on the last question on the naval side. As we said in our initial speech, our strategy to face -- to deal with this significant crisis is threefold. As you said, preserve at whatever cost, whatever it takes, as Mr. Bono said, our backlog in cruise. Second is to increase our efforts on the naval side because we believe that -- and we have been confirmed that our naval customers will continue to support us. And therefore, we expect to continue our operation in Naval, and we are actively working, especially with our -- of course, with our national customers -- national customer, but also with the Italian Navy, but also with our export customers. Of course, particularly Qatar, whom we have a very long-term relationship with. We're also developing new opportunities. Therefore, we are confident that Naval will be one of the areas which will give us a continuity of results if, of course, this pandemic does not extend beyond a reasonable period of time.

Just it would be added there from [indiscernible]. We are working because the negotiation of COVID, our Navy for 2 plus 2 summary. I think that in the next week, we can close this negotiation. It's a big contract, very important for us. We have the possibility to close a bigger contract with -- for now [indiscernible] a country -- the revenue I spoke about in the past -- in the recent past. I am confident that the naval sector can give us an important aid to face the situation.

On the first question, of course, the word is discipline. So we are trying to cut expenses that we can cut. Of course, the management of the emergency requires expenses, okay? And as far as the CapEx program, the CapEx for 2020 and on, of course, they are deeply under review. By no means we can afford to have a CapEx program that requires support to growth and that is growing under these circumstances. So we have -- this one of the first things we have done and we are doing, we have started a thorough review of our CapEx business plan for the year 2020 and for the years to come. Of course, whether we will go on one direction or another depends on how the emergency develops and depends mostly to what the consequences of this situation -- depends more on the long-term consequences of this pandemic outburst, okay?

Okay.

[Operator Instructions] The next question is from Alessandro Pozzi with Mediobanca.

I have 1 question, which is on the supply chain. And I was wondering what you think is going to happen to your key suppliers and subcontractors? I believe, a lot of them are SMEs, and their ability to withstand the current crisis is probably a lot more limited than yours. And when production will restart, when we come to the end of this crisis, I was wondering whether you think your key suppliers are going to be still there and whether you can ramp up production quickly to where we were before COVID-19?

Okay. I can take this question. First of all, it is clear that we are constantly reviewing the status of all our suppliers. If we talk about the main suppliers, of course, they have signaled -- they have told us that they might have delays, but it is not clear yet or defined what could happen. Bear in mind that we have quite a long production cycle and therefore, there is a minimum caution that we have between our need and the delivery to our shipyard. So having said that, it is not defined yet what exactly consequences. Apparently, this -- there's not been any specific information of lack of delivery of -- or a lack of presence of technical experts in our shipyards. But clearly, this is a situation that we are monitoring every day. What we are very much focusing on is to protect our small and medium companies that are working for us, are key to our supply chain for our production and business model. And therefore, we are making sure that they are able to resume work as soon as we restart our operations. So as I said, we -- this is a very key part of our plan to make sure that all the -- especially all the companies, small and medium enterprises working territories, are kept safe to make sure they can restart their work. This is our main focus. But so far, we have not received any message, any clear indication of possible disruption. Although clearly, this is a situation that we have to monitor day by day. The situation is difficult to -- it is clearly still moving. But there's a full and complete overlooking and control on -- especially on the -- as I said, on the small ones, which are the most critical ones.

For the financial point of view, you consider that the small and medium of companies will suffer a lot in the future. We are starting with CDP to regularize and help to the small and medium company through [Foreign Language] because they have a subcontractor or the most important subcontractor are leaving the company. So we can -- we think we have the possibility to having that liquidity for facing the situation in the next future.

Just a follow-up. I know -- I'm mindful that the situation is very fluid at the moment. But I was wondering, is your best guess when we start operations sometimes before the end of April?

It will depends a little on the pandemic. Right now, we have to follow the indication of the authorities. For -- I think that the end of April, you can -- we would like to start to prepare the answer to have the possibility, step by step, to reach the level which was in the past, a level that was in the past. Because of the organization of this status, it's very difficult, and we are starting a new program to minimize, the -- obviously the impact to the cost and to leave there -- to hire subcontractor that, as you know, are a very important asset to -- for us for building the ship, to start in the meantime. It will depends not only of Italian situation, but of the situation of Europe and of China because some components will come from this different countries. It is complicate but we are confident that, again, we can start, within 1 month, we can reach the normality.

The next question is a follow-up from Matteo Bonizzoni with Kepler.

Yes. I want to quickly return to a point which I asked before, that is cancellation risk. So you clearly said that your priority, and it's clear, is to protect your backlog. That basically means that you are going to accommodate the potential gap of your customers to postpone the deliveries. This is clear. Is it also possible scenario of cancellations? In other words, if there is a -- one of your customers say, "I don't want this ship anymore." Can they cancel without the cost on one side? And do you have a guarantee on the other side, any formal guarantee?

We have a guarantee. We have -- obviously, we have a penalty. We have -- always we have that. And we don't miss the work. This is the problem, not financial or economic impact. In this moment, I would like to give you the message that it is vital for the future, you have a work. You have a work because without the work, a disaster. Just the like the pandemic. This is the problem. And if -- I don't think that [indiscernible] this is probably difficult. But if it's a cancellation, it's very faster because we have during the day inpatient that [indiscernible] in the next years are meant to be able to restart. Just to give you an information. If you know the desire of the company is that it's not only U.S.A. In the U.S.A., in every quarter of the operation, they are listed there. Like change of work [indiscernible] The American Senate said that they have not can't to help every industry. American Government to help their industries. But the company has [indiscernible] in the years [indiscernible] it's 100,000 people that are working in the sector. For that, Trump is favorable to help to the country. This is the vision of the government for the future. To protect the possibility for industry to restart. The disaster is very, very -- I don't know -- I don't want to repeat. But this [indiscernible] the possibility to have a life and the future for all to our people for and the [indiscernible] and the possibility to have a life that they want. This was the problem the year before. And as suggested to your bank to help the industry to restart. Because we are still [indiscernible] to the industries, to answer to your question. That's the end of it, with regard the financial institution.

Besides, Matteo, on the financial side, which is a cyclic order problem in this moment, as Mr. Bono said. We want to keep people working at this point in time. And this is not -- this is a primary goal for the company and for the economy of the country. If people don't work, we have much more problems than simply, let me say, a financial statement problem or a growing concern problem. But in any case, on the financial side, all the orders that we have in our backlog, as most of the orders, most of the orders, especially the ones we have with Carnival that you mentioned, are backed by financing lease flexible credit. And this is [indiscernible], credit.

The next question is from Gabriele Gambarova with Banca Akros.

The first one regards CapEx because they were very high in comparison to my assumptions in 2019. So I was wondering what was your assumption for 2020, of course, before the tariff review you are making. And the second question regards COVID-19. I'm sorry to come back on this, but I was wondering if I'm right in assuming that a couple of week stoppage was recoverable during the summertime in August? And if -- I'm wondering if the stoppage goes on, as it seems, if you will be able to possibly recover these days lost during the rest of -- the remainder of the year or you see some problems there? So beyond the 2 weeks, you have a problem or you can still recover?

Well on the CapEx, I think we -- I have answered before. Of course, the CapEx level of 2019 was high and was justifiable because we, as I said, increased the production capacity in Romanian yard. Right now and of course, these are considerations before the COVID-19 emergency, right now, Romania is able to deliver fully finished cruise vessels, which is a very important achievement, especially if you consider this, that this was done in a year, okay? And being -- putting a yard in the condition to deliver a fully finished vessels, albeit small, it's not something you do easily because you have to aggregate not only the steel capacity, but you have to -- notably the project management capacity, the right spaces, the right subcontractors, the right workmanship. So -- and this was done in a year. On the other hand, on the Italian yards, what we were working on, what we are working on is to allow the 2 main yards that we have in Italy, Monfalcone and Marghera, to execute the very challenging backlog that we have. And year 2019 was the year in which Marghera was -- and is still on losses, was ramped up to make it more adequate, very challenging backlog that they have. I mean if you go visit the Marghera yard, we invited you several times. Right now, it's, let me say, an open yard that we've literally revolutionized the layout and so on and so forth in order to make it more prepared and more efficient for that. As with 2020, of course, whatever the assumption was, as I said before, it is probably being reviewed. Of course, we cannot stop investments and the CapEx programs that are already on the run. We cannot stop them. And we will not stop the programs that we have in order to assure that our workers work safely and in security. These 2 categories of investments will not be stopped again. The one's we already started, and the one's finalized to health, safety and security. But the rest, of course, is being thoroughly reviewed, okay?

Okay.

It was -- there was another question, no?

The second question was on -- if I believe, Gabriele, if there is more, let me say, if we lengthen the closing time, do we have the chance to catch up with the work. I mean I can take this, but if Mr. Bono or Mr. Maestrini want to add something. In the past, we have seen many times how capable is Fincantieri to, let me say, catch up with whenever there is -- there are programs that were made. I mean we have seen literally catching up 2 to 3 months of productions. And I mean, I can only comment that this time is new. So it's a new thing. It's a new phenomenon. Of course, we will do our best to catch up. But at this point in time, I really -- personally, I cannot give you a thorough evaluation on this. It really depends on how long we close, and it depends also on what we find after we reopen. And this brings to another question that Matteo asked before which -- to which I believe we did not fully answer. Matteo, [Foreign Language] you asked that if in 2008, we had cancellations in the cruise segment. No, we did not have cancellations. But again, I would not take 2008 as an example of how we weather the crisis because this time is different.

The next question is from Monica Bosio with Banca IMI Intesa Sanpaolo.

Yes. Just a follow-up for housekeeping. Can you comment on taxes for 2019? And what do you expect in terms of tax rate for 2020?

Well, hopefully, we expect the tax rate, of course, to improve. The taxes for 2019 -- the high-level taxes, let me say, is notably influenced by the fact that we did not book any deferred tax assets on [indiscernible] It pairs up with what Mr. Bono said, our balance sheet is clear. I mean we deemed not appropriate to book any deferred tax assets, considering the net results of the company.

The next question is from Michele Baldelli with Exane BNP Paribas.

Just 3 questions. The first one relates to the European Commission, the deadline. Is there a postponement? There is already a date of a further deadline? Or what is the situation there for Chantiers de l'Atlantique. Then 2 questions more for, let's say, personal reasons on the modeling. Reverse factoring, how much was in 2019? And do you see any change currently ongoing to -- in the relationship with banks with your suppliers? And last question. Sir, just if you can give us the number that will be published then on the -- I think, in the balance sheet, in the annual report about the unutilized credit lines? How much it is? And I suppose that you have already extended them in the last few weeks, if you can give us an update?

I can start on the on the postponement date for the deadline. Let me say that the -- there's no date fixed, but what is important to highlight is that the world has changed. All the assumptions that have been made in the previous period during the analysis now have to be completely reviewed and therefore, it's not just a matter of defining when the postponement will be -- until when the postponement would be kept on. It's just the matter that this market will probably be transformed by this pandemic. And therefore, many of the assumption, I think, that have been made in the past are now different. And probably, as Mr. Bono said before, they will have -- they will understand that a very strong European industry is the only way for a real recovery. Without work, without an industry that is able to generate and create work in large quantities, there will be no recovery. I think that this is a change of view that will definitely force a rethinking of all the assumption which has been made in the past on this topic.

On the other question. Reverse factoring that was 590, I believe, at the end of 12/31/2019. Of course, this is going back to -- we discussed before vis-à-vis what we can do and what we want to do versus our suppliers' network. This is a tool that we believe can be very useful in this situation when it comes to support the financial health of our, of course, key suppliers. On credit lines, what I can tell you at this point in time, compared to what we disclosed -- what we said in 12/31. We have EUR 2.2 billion of available credit lines and available unutilized credit lines as of 12/31/2019. Right now, between cash, liquidity and credit lines, we are roughly at the same number. Of course, we are discussing further -- a further increase in order to secure funds to weather the storm. But at this point in time, we have no major concerns on this.

And just as a follow-up question, because it was interesting that the argument caused a big discrepancy problem in the future in the market. Can you confirm that your main competitor, Meyer Werft, is privately owned and there is no government behind?

Well, it is privately owned. There is no government behind, I cannot confirm that because, I mean Meyer Werft enjoys very strong support from the Federal Government of the Republic of Germany.

The information is very, very wrong because they are a private company, and they are in Germany. They are not balance sheet -- a public balance sheet. I have to give you the last message of the day. If you compare Meyer Werft and management [indiscernible] take out from the storm the company within a state [indiscernible]. And I think we bring [indiscernible] and the other will bring [indiscernible] this is now because we are leader in the work, we have a big backlog. And I think a look a bit protect this network, but some cancellation will not to have a disaster impact on our operation. And then we have [ electrification ] the other competitor only the cruise effect, you have the [indiscernible], we have the Offshore, we have the state ships, we have the electronics. We have a lot, in fact, [indiscernible] other activities. And we are localized our operation around the world. So this is asset that I suggest that it has asset to have a right evaluation.

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

So thank you very much.

Thank you very much, and I wish for your health.

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