Sanlorenzo S.p.A. (SL) Earnings Call Transcript & Summary

[Audio Gap] 2026 highlights. First half shows that Sanlorenzo Group continue on the path of expansion with a sustained growth in line with our guidance, 2026. Thanks to the unique business model moving beyond the worldwide geopolitical issue and global context. So we can analyze the figures starting from net revenue New Yachts grown 3.8% year-on-year at EUR 471.3 million, led by the strong performance of Superior division and great result of APAC and Americas region. EBITDA increased 3.7% year-on-year at EUR 83.5 million. And the EBITDA margin is 17.7% after the full consolidation Nautor Swan. EBIT at EUR 62.2 million increased 3.9% year-on-year, consistent with the previous year. And the group net profit grew up 5.4% year-on-year, with a total amount of EUR 49.1 million with a double-digit margin of 10.4% of net revenue in New Yachts. Then the organic investment at EUR 18 million, especially related to new industrial capacity and product development with an incidence on net revenue New Yachts at 3.8%. And then the net financial position at EUR 49.4 million net cash end of June 2026 with a cash generation of EUR 26.5 million last March. After dividends paid for EUR 37 million and taking advantage of the delivery season provided in Q2, especially in Europe. Then we can analyze figure more in detail, starting from the top line. Superyacht division performance remained strong, plus 12.4% year-on-year, driven by the steel line considering the innovative contents also for wellness and longevity and represent more than 32% of net revenue New Yachts. And then Yacht division generated about 50% of the total revenue grows by 3.1% compared with the previous H1 2025, mainly related to the market segment above 30 meters. Bluegame generated EUR 43.6 million revenue, flat year-on-year, confirming strong resiliency in challenging segment of yachts below 24 meters. Then Nautor Swan division reported net revenue New Yachts at EUR 40.9 million, reflecting a software same market condition while maintaining its distinctive high-end positioning. In terms of breakdown by geography, APAC region grew 35.8% year-on-year, considering the structural advantage of the same summary platform in Asia as well, Americas grew 35.4% year-on-year considering the strong dynamics in the region, especially for yachts above 30 meters. EMEA region increased plus 22.7% over the local context. This positive market evolution allows the group to have a better balance in terms of the mix by geography with Europe's impact below 50% were the largest loyal and resilient customer club is based. Then in terms of markets, the considerable revenue expansion in America and APAC region is consistent with the plan 2028 strategy. And to entering a new and tap the market, in particular, the extension the recent new local presence in Mexico and Brazil and also in Japan and Australia have given in the last H1 2026, a robust order intake contribution. But profitability, the EBITDA grew by 3.7% year-on-year at 17.7% of net revenue New Yachts considering the balanced expansion of the group with solid margin consistent with the pricing power and flexible cost structure. EBITDA increased 3.9% year-on-year, with a stable EBIT margin at 13.2% after 1 full consolidation. The group net profit grew up 5.4% year-on-year double-digit margin at 10.4% of net revenue New Yachts and with an improvement of 10 basis points compared to previous year. Order intake evolution, we can consider that the evolution of the top line is driven by the continued growth of backlog with an order intake consistently growing now for 8 consecutive quarters. Remarkable result reached in a challenged global context and related to the Sanlorenzo unique business model, which can show different and better results, especially in more complex scenarios. Due to the top end positioning of Sanlorenzo brand and the peculiarity of the scarcity, craftsmanship made to measure direct distribution to the customer club. And very significant order intake of Q2 2026 at EUR 273 million, plus 13.1% compared with the second quarter 2025 and with a book to bill Q2 2026 that reached level of 1.1x. Then the gross backlog reached the level of EUR 1.5 billion, thanks to the strong H1 2026 order collection of EUR 496 million plus 18.3% with a robust book-to-bill in H1 2026, of 1.1x. So the gross backlog has a composition of EUR 832 million for 2026, covering 83% net revenue in New Yachts of the midpoint guidance with a relevant progression of the coverage. You can see 500 basis points compared to the previous year and EUR 667 million for 2027 and beyond increasing the long visibility of the future results. Net backlog end of June increased to more than EUR 1 billion. And furthermore, backlog is very consistent and high quality in consideration that it is sold 89% to final customers, once again, thanks to the Sanlorenzo unique business model. About CapEx, continued the organic investment program that reached the amount of EUR 18 million end of June, of which 87% related to the group expansion in new product development, EUR 11 million and new industrial capacity, EUR 4.7 million dedicated to all division. The incidents in organic CapEx on net revenue New Yachts is limited to 3.8%. The overall investments are EUR 20.3 million, considering the change in perimeter of the EUR 2.2 million referred to Mast Italia acquisition to increase production in the yacht division for products above 30 meters. The net worth capital end of June 2026 was EUR 86.5 million positive and below the ceiling level defined in the business plan with a reduction of more than EUR 32 million in the last 3 months. Therefore, the net cash end of June of EUR 49.4 million shows a cash generation of EUR 57.7 million compared with June 2025. And of EUR 26.5 million compared with March 2026. The net financial position bridge, starting from 2025 highlights the remarkable predividend cash generation of more than EUR 66 million, considering the positive contribution from the operational business for both EBITDA and working capital for more than EUR 86 million and consistently capital allocation policy applied. Then in conclusion, considering the solid H1 2026 result. And given the high visibility for -- from the backlog end of June, the 2026 guidance is fully confirmed without changes. The resiliency is made possible by the Sanlorenzo business model and the strength of the brand even in a global complex context as we have in this phase. So that's all for the financial result, and I leave the floor to Massimo for a business update.

Thank you. Thank you, Attilio. Just a few words before giving you the floor, I'd like to underline the continued product momentum with the introduction of 5 new boats at the [indiscernible] show will start next Tuesday, the 8th of September, we will have the first model of the new Sanlorenzo [indiscernible]. The boat is giving us a lot of interest from the market. We sold 6 new units already, and we have many appointments already organized. It is something new. It is something that the market needed. And as always, our innovation approach as Sanlorenzo is going to the right direction and the market is really in appreciation of this new model. The 74 meters has been introduced to the market, I think, last June. We delivered the first unit in Spring '26, we have the second unit in delivery by October, November '26, both diesel, electric. So with the sophisticated technology. And this model is, as you know, our biggest and largest model approximately 2,000 gross tonnage, and this is our limit. As you know, we do not want to increase the volume and the complexity of our product range above 75 meters. The Bluegame 64 is completing the range in the BG range. Would be award Premier in [indiscernible]. We have been just finishing testing the boat with fantastic speed, all the datas expected has been reached. So we are very happy of the product. We have many contracts to be developed next week in [indiscernible]. And then last but not least, the SWAN 80 is a completion of the SWAN classic range just below the Maxi range, 80 is 24-meter is a very delicate product for us. The first boat has been delivered at the last July in Finland and will be at the [indiscernible] to help us to sell and increase the volume of this one deal. Last, I hope that you found the numbers of the semester good. I think Atellia was giving us a very good picture also in consideration of the still existing geopolitic problem. And this is why, well, because our business model is really creating long-term value. We are continuously focusing on building differentiation from our competitors and the salability. This matter is -- this result is coming from a mix of innovation with the proper technology, with tradition, keeping and preserving our tradition for the design, the co-creation, the tailor-made approach to a customer, which is not only the product, which is there since the day 1, 20 years ago, but also in the service to our customer. And then the continuous developing of the range product expansion, the 6 -- the 5 new model that we will introduce to [indiscernible] is a confirmation of the expansion of our portfolio. She is an example and more has to come. Now I think it's the time to pass the floor to you. We are ready to reply to your question, please.

Yes. We can open now the Q&A session. [Operator Instructions] I see that we have a question from Natasha Brilliant UBS.

So firstly, you highlighted the benefits of new geographies. I think you highlighted Brazil and Australia. So I just wondered if you can share what other markets you might be targeting? Second question is, obviously, you've got the yachtd shows to come, but any change in customer dynamics in the last few weeks, a few months over the summer. Anything you can call out by different geographies or by different segments. Any color would be helpful. And then my last question just relates to the Italian C group. I think there's a deadline in the next couple of weeks, if I'm not mistaken, about a bit. So I just wondered if you could share your latest thoughts about the potential to bid and what the rationale might be, anything you can share there?

Than you, Natasha. I think casing, but we should meet at the [indiscernible] show the most important Canada dealer, as you see in our picture. One of the most important market we were shooting when we introduced the 3-year plan was in green and Canada is, for sure, one of the most promising country, and we have already almost a deal with a top dealer which is coming in [indiscernible] to shake hands and to sign a preliminary agreement. Of course, the Middle East is still a bit in standby. But we can confirm that Asia Pacific has quite a strong dynamic in August and beginning of September, we had some good sales and also good prospects to be probably -- we will meet in the [indiscernible] show. So if I have to say, Canada will be the first new market to be covered with a strong dealer. Middle East is still in standby but as you see from the cake of the geography, we still increased 22% our presence in the first 6 months of '26. But then probably Asia Pacific will be part of the market where we do expect the best results for the next couple of months. Regarding the dynamic of the demand, I have to say, good. July and August was 2 good months. We saw both. That is quite good demand coming. And we have to understand better next week. You can see that we have next week [indiscernible] and then from 22 to 26, Monaco. In the middle, we have 3 important days in Porto Cervo where we will host 170 SWAN sail boat coming from all over the world for the Rolex 1 Cup and for the christening of the 6th anniversary of SWAN. We do expect some good business coming from that week, which is from the 16 to the 18 and 19 of September. After Monaco, there would be the general show, the first 3 days of October. So after this dramatic, I would say, 30, 35 days of engagement, we do expect to have quite a good result. Finally, well, we do not have anything to add in specific, as you know, from our article on the paper, we have been sending a written offer to the Tribunal and to the Board of [indiscernible] at the end of July. We made a proposal in money and engagement, which was, I think, quite important. We are looking the deal through a company called Polo Nautico Carrara, where we have 45% is Sanlorenzo and there will be other partners, including a large group of suppliers. We think that is a good deal because the facilities and the people -- the facility is very good and the people, the managers are also good people with a lot of skill. So we intend to continue to look to the deal, to the matter, but not as the 100% player. We would like to split the deal with some partner in order to proceed with our rigorous financial approach, which is typical of Sanlorenzo. You know that I do not like to spend too much money or to jump to deal which are risky for the company. Overall, the geopolitic is changing every day. As you know, yesterday and the day before yesterday, there was some troubles between Germany and Russia. 1 week ago, there was other problems. So we do not think that the environment is such that we should do crazy deal. So please don't worry. Sanlorenzo is approaching always with a solid and logic mind to the business. The business is not easy. We know the business pretty well, thanks to our experience. And we think that [indiscernible] has good assets but the approach is very balanced and the balance logic is to approach the deal with Polo Nautico Carrara with some partners taking care of the workers, taking care of the suppliers because at the end, most of the suppliers of TISG are Sanlorenzo supplier. So we think that we should protect them, and we should take care of that.

Next question is coming from Oriana Cardani from Intesa Sanpaolo.

Yes. My first question is the mix of the order intake in the second quarter. Can you tell us the split between SWAN and Sanlorenzo. And between yacht, Superyacht for Sanlorenzo? And can you specify the way of America in second quarter, order intake. And the second question is on the order backlog of EUR 667 million, the period beyond 2026. Could you specify the value for 2027 and 2028?

Yes. Now the split of the backlog beyond 2027 is approximately 40% of the volume expected for '28 already sold and approximately 25% of the '28 and the little piece of '29. So we are very happy because on top of having 83% already covered after the first 6 months for '26. And as you know, we have the full control of costs. So having a nice and good July, August, and we have a good expectation for the September boat show. So we do expect no problem to close the 2026 within the guidance. But it's also nice to start the 2027 with 40% covered already. And then 1 quarter, 25% for the following '28 and a piece of '29. Now regarding the SWAN and Sanlorenzo, unfortunately, if I have to say a small problem we are facing in the last month is this 1 sail boat. The market has been pretty much low, in standby, I would say. As you know, SWAN is a top brand. We built 25 boats per year. It's not a large volume company. So we are not thinking to really suffer. But I have to say that the last 6, 8 months has been pretty low, in contact, in order. And so we do expect to see some action in September and October. Good point from the Palma Show in April and until today, that many second hand boats, Maxi, boats between 90 and 110 feet has been sold. That is a good sign because when the second-line market is moving quickly, that is normally assigned and expectation of new boats buyer coming to the boat show. Between Superyacht and Yacht we normally do not give this kind of information. But mainly, we had a more stronger order intake in Superyacht. Quite good and strong order intake on yacht above 30 meter. More light market for the yacht below 30 meter. We think that Bluegame is keeping quite a good position, which is extraordinary because the boat below 24 meter, as you know, are suffering since a couple of years and still the geopolitic situation do not really allow the market to come back strong for the boat below 24 meter. America, for America, we can confirm is good. As you see, we have a 35% increase in United States. And America is continuing to be good, but it is very important we can show the cake for 1 second. You see that the America 27.4% of our share, we have the indication that 11% is U.S. client. Out of 27. So the majority is out of U.S. And only 2% is below 30 meter. I think that the market below 30-meter in America is suffering the tariff which is normal, a 15% tariff for the boat below 30-meter is something. On the side of SWAN, we sold 351 and 4 plus 128 in the last 6 months in America. So there's one deal. Thanks to all the investments we did with American Magic and the new office in Newport, et cetera, is giving back -- is paying back to Swan. But I would say America will be U.S. and America in general would be quite strong for boat above 30 meters. For the boat below 30 meter, we still see some problems, some timing from the market before accepting and digesting the tariff.

Then we have probably a final question from Mr. Sandro Laconia.