In front of uncertainties of the traditional cruise market (50% of turnover) and the prosperous prospects, instead, of that naval military that already yields them almost a quarter of revenues for 1.4 billion euros, Fincantieri decides to focus more and more on they fly defense, another leg that in 2020 counterbalanced i slowdowns pandemics of the core-business and where in 2019 it has strengthened a market position (which led her to win lucrative orders around the world) with the joint venture with the French Naval Group, giving birth to Naviris.
Definitively closed the chapter ofAirbus of the Seas with the transalpines Chantiers de L’Atlantique, the shipbuilder led by Giuseppe Bono which capitalizes on the stock market 1.23 billion euros is negotiating with Leonardo to buy the division Oto Melara, a former world leader in design and production of naval guns of all sizes and merged in 2016 into the Defense Systems division of the other public defense group administered by Alessandro Profumo. Processes that give work to more than a thousand employees who assemble the 76/62 mm naval gun sold to 54 navies around the world. A deal whose signature may arrive within the end of the year and that, according to some evaluations, it could around 400 million euros.
The performance of the Fincantieri stock over the last five years (source: Borsa Italiana-Euronext)
“Pending more details, we believe Fincantieri’s interest it would be part of the company’s desire to strengthen its military division with potential extractable synergies“, wrote the financial analysts of Equita Sim (target price to 0.72 euros; Hold confirmed). “To be evaluated economics and impacts on the financial structure of any deal which, however, we believe may be of limited size “, concluded from Sim Milanese.
The CEO of Fincantieri Giuseppe Bono
The analysts of Intesa Sanpaolo instead they reported that “a potential acquisition of Oto Melara, which represents a change of course since business model by Fincantieri, it would strengthen the group’s positioning in the naval segment (rating Add And target price at € 0.93) in future races, even allowing some synergies at the production level “. And indeed Bono has always been clear on the ratio of the acquisitions of component companies, sectors to be integrated into the ships, to allow Fincantieri to “dominate the entire construction process”.
The sale of Oto Melara, with which Fincantieri has already collaborated in the past, it could represent a win-win for both groups controlled by the Italian Treasury (Fincantieri through 71.3% held by Cdp): if the company in Piazza Monte Grappa would allow focus on core business aerospace (compared to which the naval one is more marginal) and to have more options to finance theacquisition of Hensoldt, the shipbuilding giant, integrating the former Oto Melara into its corporate perimeter, would instead be able to have greater negotiating power in defense contracts. Leverage where Fincantieri in recent years, also supported by the alliance with Naval Group, has made a full house. Starting with United States, where the group led by Bono is in pole position to put the hands on all 5.5 billion dollars of contract to build nine multi-role frigates for the Us Navy, intended to represent the “backbone” of the American fleet.
The day of Fincantieri’s listing on the stock exchange
But there are also the military orders won in Indonesia, in Qatar and the interesting perspectives in Greece, Egypt, Morocco, Kuwait and those for EU call for the new European corvette. In addition to the construction of submarines, where Fincantieri has just received from Italian navy an order to assemble two submarines – plus two others – of the latest generation.
Meanwhile, while the order book records a total workload for 116 ships, with deliveries up to 2029 And 35.7 billion euros, equal to 6.1 times the annual revenuesi, Fincantieri, as also demonstrated by the reconstruction (with WeBuild) of the Genoa bridge, is operating the lever of diversification, focusing on new ones business.
Now, always like general contractor in consortium with Paul Wurth Italy (PWI), look at the reconversion green of the polluting blast furnaces of the former Ilva of Taranto. Billionaire order that with the tenders arriving in 2022 could give a further hand to Piazza Affari for the title, far from the highs of the end of January 2018 when it traveled above 1.52 euros.