10/2009 –
2009 Financial results and prospects for 2010

SOME HISTORICAL NOTES
Sanlorenzo’s sales turnover in 2005, the year in which Massimo Perotti took over the boatyard from its former and long-time owner, Giovanni Jannetti, was 42 million Euros, with an EBITDA (Earnings before interest, taxes, depreciation, and amortization) of 4 million. The company employed 75 staff members, most of whom were office workers, with an indirect workforce of 200 people, engaged in an average production of 14 crafts per year. In 2008, the turnover of Sanlorenzo Spa rose to 180 million Euros (registering an increase in sales of 330% over 2005), and an EBITDA of 24 million (with a growth rate of 500% over 2005). Company headcount has risen to 250, while the indirect labour force is now made up of 900 workers, with a production of about 34 crafts, thanks to the opening of the new Viareggio Division. In fact Massimo Perotti has chosen not to further expand the traditional production of fibreglass motor yachts produced in the Cantieri Navali di Ameglia, and has created a new Division, the Cantieri Navali di Viareggio, to design and produce two lines of motor yachts: small crafts in composite material with a semidisplacement hull (from 92 to 122 feet) and megayachts in metal (steel and aluminium) ranging from 40 to over 60 metres. The manufacturing plant, where these new Sanlorenzo craft have now been produced for two years, is located in the nautical pole of Viareggio, the incubator of international superyacht production.

The “White Crow”
Forecasts for 2009

In the annus horribilis of the economy in general, and particularly that of the boat industry, Sanlorenzo represents something of a “white crow”. While leading European and American groups declare two-figure drops in sales, Sanlorenzo Spa is managing to limit its contraction to – 6%, which amounts to an estimated sales volume of 170 m Euros, with an EBITDA passing from 24 to 18 million, equivalent to a reduction that manages to stay within the 25% mark. This fall in profitability may be attributed to the depreciation effect of the used boat fleet which, in 2009, underwent a devaluation that varied between 20 and 25% on a worldwide basis. Sanlorenzo has successfully maintained a good margin on its crafts, passing from 14% in 2008 (a turnover of 180 million and an EBITDA of 24 million) to 11% in 2009 (a turnover of 170 million and an EBITDA of 18 million).

It is worth noting that, unlike other important European players, Sanlorenzo has not adopted a policy of aggressive discounts, in an attempt to sell at all costs, but has preferred to maintain its price level, in order to guarantee and safeguard the investment made by its ship-owners. Sanlorenzo has been in able to practice such a policy of commercial steadfastness thanks to the particular strong points of its brand:

• Customised products – Each yacht is unique and personalised to meet the ship-owner’s requirements. Construction is entrusted to a highly skilled workforce using traditional craftsmanship and quality materials.

• Timeless values, traditional and sober design – Lines, styles and formal languages that resist the passage of time and the temptation to follow passing fads and trends. The introduction of new models is discerningly spaced out in time in order to highlight each individual model in the range and safeguard investments, thanks to the solidity of construction, harmonious design and brand image which also sustain prices on the market for used vessels.

• The Middle-European market – Sanlorenzo’s clientele is made up of entrepreneurs and families with well-consolidated assets that have been built up in the course of time; they are distributed throughout those leading European countries with the soundest and most established economies: Italy, France, Germany, Spain and Great Britain, which represent the most reliable markets.

• Direct distribution – Through a carefully gauged network of Brand Representatives, made up of companies in which Sanlorenzo has a direct and majority share, situated in strategic locations of international yachting: Rome, Venice, Antibes, Monte Carlo, Palma de Majorca, Hamburg, Sukosan (Croatia). The great dealer networks consisting in 40/50 third party firms (e.g. Azimut, Ferretti or Sunseeker) are a powerful engine to boost growth when the economy is expanding, but soon turn into a restrictive bottleneck in times of violent crisis like that of 2009.

2010 Forecasts
Relying strongly on its competitive edge and the solidity of its brand, Sanlorenzo forecasts a 2010 budget of 200 million Euros, amounting to an increase of 18% over 2009. To date, the order portfolio represents 66% of the estimated budget, while Brand Representatives have no stock.

Investments
2010 will see the implementation of an extension project, signed by the architect Stefano Boeri, for the Cantieri Navali di Ameglia, the headquarters of Sanlorenzo. The project will confer an operative area of 100,000 square metres to the boatyard, with 25,000 metres under cover, all within the Regional Nature Park of Montemarcello-Magra (Sanlorenzo holds the environmental certification UNI EN ISO 14001), entailing a prior investment in the new manufacturing plant for 8 million Euros, and a subsequent investment of 12 million Euros in moulds and development for new models, for a total investment of 20 million Euros in 2010, equivalent to 10% of the estimated budget.

Human Resources
Massimo Perotti is proud to have kept on the entire workforce, without resorting to CIG (a form of social safety valve). Neither does he foresee having to do so in 2010.

The Range of Sanlorezo on NauticNews.com

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