November 2015

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Previous Experiences

Investment Banking – Italy IBD

Investment Banking – Corporate Finance

The Speaker

Riccardo Bonalumi

VICE PRESIDENT - HEAD OF M&A

1

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Table of contents

2

1. Description of the Fincantieri Group

2. The acquisition of VARD

3. The Bond issuance

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1. Description of the Fincantieri Group

3

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Italy 36%

RoW 64%

Employees by location

Italy 18%

RoW 82%

€4,399 MM revenues

~€11.6 BN backlog(2)

~€8.2 BN soft backlog(2,3)

21 shipyards

4 continents

~ 21,700 employees

~ 80,000

subcontractors

€297 MM EBITDA

Note: all figures reported at 31 December 2014, except for backlog and soft backlog which are referred to 3Q 2015 (at 30 September 2015) (1) By revenues, excluding naval contractors in the captive military segment. Based on Fincantieri estimates of shipbuilders’ revenues in 2014 (2) At 30 September 2015 (3) Soft backlog represents the value of existing contract options and letters of intent as well as contracts under negotiation, none of which yet reflected in

the order backlog

#1 Western designer & shipbuilder(1)

with 230 years of history & >7,000 ships built

Revenues by geography

~21,700 €4.4 BN

Operating subsidiary

Representative / Sales office

Corporate/BU headquarters

Joint Venture Shipyard

Vietnam

• 1 shipyard

USA

• 3 shipyards

Brazil

• 2 shipyards

Norway

• 5 shipyards

Italy

• 8 shipyards

Romania

• 2 shipyards

UAE

• 1 Joint Venture

4

Fincantieri at a glance

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(5) Regarding OSCVs based on n° of ships in orderbook at 31 December 2014 (6) Breakdown calculated based on revenues gross of consolidation effects

(1) By oceangoing cruise ships > 10,000 gross tons ordered in the 2004 – 2014 period. Source: Fincantieri analysis based on IHS Lloyd’s Fairplay – Shippax data (2014) and Company press releases

(2) For all the large ships and excluding minesweepers and small ships below 45 m in length (2014) (3) For medium size ships, e.g. patrol vessels and corvettes

(4) Anchor Handling Tug Supply Vessels with BHP (Brake Horse Power) greater than 20,000, Platform Supply Vessels with DWT (Dead Weight Tonnes) greater than 4,500, Offshore Subsea

EQUIPMENT,

SYSTEMS

& SERVICES

Positioning

• Leading player

worldwide

End

markets

• #1 worldwide

(~50% market

share(1))

Cruise

Leisure

• Leader:

−#1 in Italy(2)

−Key supplier for US

Navy & Coast Guard(3)

−Worldwide exporter

(India, UAE, other)

Naval

Defence

• Leader in:

−High tech ferries

−Large mega-yachts

−Repair & conversion

Others

Transportation /

Luxury /

Maintenance

OFFSHORE

• Leading player in

high-end OSVs(4)

(~20% market

share(5))

Oil & Gas Equipment /

Life Cycle Management

• All cruise ships

(from contemporary to

luxury)

• All surface vessels

(also stealth)

• Support & Special

vessels

• Submarines

• Offshore Support

Vessels

(AHTSs, PSVs, OSCVs)

• Specialized vessels

• Drillships

• High tech ferries

• Large mega-yachts

• Ship repair &

conversion services

• Marine systems,

components & turnkey

solutions

• After sales services

Main

products /

Services

SHIPBUILDING

= Key area

3Q 2015 Backlog

€9,437 MM €634 MM €1,589 MM

2014

Revenues (% on total)(6)

€192 MM

(4%)

€1,439 MM

(32%)

€1,059 MM

(24%)

€206 MM

(5%)

€1,580 MM

(35%)

5

Products and end-markets

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(1) At 30 September 2015 (2) Including US subsidiaries pre Fincantieri acquisition, excluding 174 RB-M delivered since 2002, of which 28 in 2014 and 3 in 2015 (3) Including VARD and predecessor companies (4) Parent company of several brands: Carnival Cruise Lines, Costa Crociere, Cunard, Holland America Line, P&O Cruises, Princess

Cruise Lines and Seabourn Cruise Lines

(5) Parent company of Oceania Cruises and Regent Seven Seas Cruise. Acquired by Norwegian Cruise Line Holdings in September 2014

• Royal Princess: 1st cruise ship

fully compliant with new

regulations

• Costa Luminosa & Costa Pacifica: Guinness World Record for joint-

christening of 2 cruise ships

• LCS Freedom: world’s fastest

steel frigate

• Far Samson: most powerful

offshore vessel(6)

• Normand Prosper: 1st AHTS providing

significantly higher stability (24m beam)

• AMC Connector: world’s largest cable

layer(7)

• Skandi Africa: "Ship of the Year"(8)

Technological

leadership

Track record

ships deliveries(1)

SHIPBUILDING OFFSHORE

(6) In terms of bollard pull at the date of construction (423 tons) (7) In terms of loading capacity (2011) (8) Award instituted by the major Nordic shipping magazine Skipsrevyen

Cruise Naval

• Carnival Group(4)

• MSC Crociere

• Prestige Cruise Holdings(5)

• Silversea Cruises

• Viking Ocean Cruises

• Italian Navy and Coast Guard

• US Navy

• United Arab Emirates Navy

• Algerian Navy

• Indian Navy

• DOF

• Farstad

• Island Offshore

• Siem Offshore

• Solstad Offshore

Top clients

• Since 1990

• Since 2002

• 2014

• 3Q 2015

• Since 1990

• Since 2002

• 2014

• 3Q 2015

• Since 1990

• Since 2002

• 2014

• 3Q 2015

70 98(2) 348(3)

276(3) 47 47(2)

18 2 4(2)

3 3(2) 11

6

Track record, top clients and technological leadership

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Vietnam

• 1 shipyard

USA

• 3 shipyards

Brazil

• 2 shipyards

Norway

• 5 shipyards

Italy

• 8 shipyards

Romania

• 2 shipyards

UAE

• 1 Joint Venture

Global footprint

Operating subsidiary

Representative/Sales office

Corporate/BU headquarters

Joint venture

Shipyard

• Global footprint with 21 shipyards over 4

continents, involving approximately 21,700

employees and more than 80,000 people

estimated in its supply chain

• High quality facilities thanks to significant

investment plans aimed at increasing

productivity and improving product

quality

• Flexibility of the Italian shipyards allowing

to switch from production of one type of

vessel to another without significant

increase in costs and risks

• Operational synergies among Romanian

and Norwegian shipyards for design, hull

production and outfitting activities

• Fully integrated shipyards in USA, Brazil

and Vietnam to cater local demand

Global and flexible production network

Flexible operations

Hull Production and Outfitting

Outfitting Design

Design

Hull Production

Concept

Development

and Sales

Basic

Design

Detailed

Engineering Outfitting Fabrication

Contract Class Approval Delivery

Procurement Commissioning

Vard value chain example

7

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FINCANTIERI S.p.A.

Market Fintecna S.p.A.

71.6%

Italian Ministry

of Economy and Finance

Cassa Depositi e Prestiti

S.p.A.

28.4 %

Italian Bank Foundations

81.3%(1)

100.00%

18.7%(1)

Overview of shareholding structure

Ownership structure

• Fincantieri is controlled by Fintecna S.p.A., a

holding company wholly owned by Cassa

Depositi e Prestiti S.p.A. (“CDP”)

• CDP is a State controlled joint stock company.

CDP’s corporate purposes include the financing

of public entities, the financing, even through the

banking system, of enterprises for

internationalization, the acquisition of

participations in companies of major national

interest and the financing of project and assets

for public services

• CDP holds interests in several companies,

including among others Terna S.p.A., ENI S.p.A.,

SNAM S.p.A., SACE S.p.A., Simest S.p.A. and

CDP Investimenti SGR S.p.A

Solid ownership

8

(1) Excluding 1.50% treasury shares

VARD

55.63 %

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• Commodity

prices increase

• € / US$ rate

depreciation

• End of state

aids

• Italian Navy

orders

reduction

Revenues € BN

Years 2002 2008 / 2009

4.4

• Organic:

−Expansion of client

base

−3 new BUs (Mega-

Yachts, Repair &

Conversion, Marine

Systems)

• M&A:

−Acquisition of

Manitowoc

Marine in USA

−JV in UAE

Growth actions • Organic:

−Agreement with

Unions for

optimization of

Italian capacity

−2 new BUs (Oil &

Gas & After Sales)

• M&A:

−Acquisition of

VARD

−JV in automation

• Global reduction of new orders

• Strong decline of market prices

• Shutdown of several yards

Market environment Growth actions

Market environment

2.2

+ c.100%

(2002-

2014)

Before

• Domestic

player with 1

main client

per business

(Carnival in

Cruise &

Italian Navy in

Military)

Today

Revenues & margins

improvement based on:

• Current backlog and soft

backlog (implying full

capacity utilization in Italy)

• Price improvements

• Improved & more

flexible cost base

• Change in the

production mix

(insourcing high value

added activities)

• Synergies across the

group

New management team

Financial

crisis

Fincantieri

IPO

New growth cycle

Creation of a solid business platform

Optimization of operations & globalization

Financed with own resources (approx. €610

MM)

A true “private sector” company with a growth strategy through internationalization & diversification

9

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2. The acquisition of VARD

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Anchor Handling Tug Supply (AHTS)

Platform Supply Vessels (PSV)

Offshore Subsea Construction Vessels (OSCV)

Other specialized vessels

Source: Company information (1) Skipsrevyen, Maritime Journal

VA

RD

’s k

ey p

rod

uc

ts a

nd

p

osit

ion

ing

in

OS

V m

ark

et

Key

hig

hli

gh

ts

• Anchor handling duties and

towing of offshore units,

construction vessels and

floating production units

• One of the leading

shipbuilders in the high-

end segment

• Vessels for the transportation

of liquid and dry cargo to and

from offshore installations,

drilling rigs and construction

vessels

• One of the leading

shipbuilders in the high-end

segment

• Highly complex vessels

performing subsea operations

and maintenance

• Among technological

leaders

• Research vessels, seismic

vessels, fishing vessels (stern

trawlers and longliners) and

icebreakers

• Wide range of product

portfolio

• The acquisition was an important step in the growth strategy of Fincantieri, i.e.:

− further business diversification allowing to create a “third pillar” next to cruise & military by acquiring one of the leading

shipbuilders of high end offshore support vessels

− potential to expand into new segments and new clients by taking advantage of the combined experience and commercial

relationships with the objective of developing highly innovative vessels, with a particular focus on vessels dedicated to

operations in harsh environments

Acquisition of VARD: a highly complementary acquisition contributing to a substantial increase of scale and diversification

Diversification in the Oil & Gas segment: the acquisition of VARD

11

World’s Most

Powerful AHTS

Ship of the Year 2012

Ship of the Year 2010

Ship of the Year 2009

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Buyer:

Stake acquired upon MTO:

Stake acquired from seller:

Buyer financial advisors:

Price paid to seller:

4,88%

50,75%

STX Europe AS (100% owned by STX Corporation)

Credit Suisse, Nomura, Banca IMI

SGD 1,22 per share = € 455 mln for seller stake

Fincantieri Oil & Gas (100% owned by Fincantieri SpA)

Price paid upon MTO: SGD 1,22 per share = € 43 mln for 4,88%

Seller:

Seller financial advisors: JP Morgan, Standard Chartered

The VARD acquisition is the most important transaction of the Italian shipbuilding industry and the main

M&A transaction performed by an Italian industrial company in 2012

12

The acquisition of VARD: key highlights

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Activities / milestones Feb/12

2 1st phase of the process: “Shortlisting”

• Preliminary analysis of the target based on

Information Memorandum

• Submission of a preliminary non-binding offer

to the seller

1 JP Morgan informed Fincantieri that STX

Europe started the process to sell its stake in

STX OSV

4 2nd phase of the process: “Binding offer”

• Selection of advisors (legal, accounting, etc)

• Due diligence and management presentation

• Consensus building among several stakeholders

6 Negotiation with the seller

• Acquisition price definition

• Terms and conditions of the Sale & Purchase Agreement (SPA)

Mar/12 Apr/12 May/12 Jun/12 Jul/12 Aug/12 Sep/12 Oct/12 Nov/12 Dec/12

3 Formal invitation to the 2nd phase

5 Submission of the binding offer

13

The acquisition process (1/2)

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Activities / milestones December 2012

8 Signing of the SPA for the acquisition of

50,75% VARD shares

• Closing mechanics (i.e. trading suspension) and

contingent hedge arrangements

10 Closing

11 Mandatory unconditional cash offer to minority

shareholders

• Triggered for acquisitions of stake > 30%

12 Completion of the Mandatory unconditional

cash offer (Fincantieri acquired in total 55,63%

of VARD shares)

7 Singapore stock exchange acquisition

approval

• Cash confirmation for certainty of funds

January 2013 February 2013 March 2013

21 December

23 January

13 March

14

9 Fulfillment of SPA Condition Precedents

• Waiver from VARD banks to change of control

clause

The acquisition process (2/2)

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3. The bond issuance

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Issuer:

Yield:

Maturity:

Listing:

Coupon:

3,875%

5 years

€ 300 mln

Luxembourg

3,750%

FINCANTIERI SpA

Issue Price: 99,442

Size:

Global Coordinators: Banca IMI, BNP Paribas, Credit Suisse, UniCredit

Other Bookrunners: Deutsche Bank, HSBC, Mediobanca, JP Morgan

16

Bond issuance: key highlights

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Activities / milestones Week 1

2 Offering Memorandum

• Risk factors

• Business description

• Terms and Conditions of the Notes

• Financial information

1 Appointment of counsels / advisors

Week 2 Week 3 Week 4 Week 5 Week 6 Week 7

6 Execution phase

• Launch and announcement of roadshow

• Roadshow

• Pricing and allocation

• Closing and settlement

4 Preparation and finalization of management

presentation

3 Preparation of legal documentation

• Trustee agreement

• Subscription agreement

• Agency agreement

5 Due diligence call

17

Bond issuance: the process

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Q & A