Montecarlo, 4 May, 2011 Where is the shipping industry going? Fincantieris way forward Rome, 8 May 2013 Enrico Buschi

Mare Forum Italy Fincantieri has decided to implement a new strategy and adapt its organizational model in the attempt, hopefully successful, of retaining long-term competitiveness, in other words to survive and possibly to grow. This presentation deals with two main issues: - market scenarionew products - Fincantieri strategyorganizational evolution SHIPPING FUTURE & FINCANTIERIS WAY FORWARD: PREAMBLE PREAMBLE

Mare Forum Italy 2013 MARKET SCENARIO: SHIPPING & SHIPBUILDING The crisis has impacted both shipping and shipbuilding industry after a long lasting period of growth and a high new-building demand, with a peak year in Now, speaking about the current situation of maritime sector, its the fourth consecutive year that shipbuilding deliveries exceed new orders: that is to say, investments in new ships are not enough to feed the shipbuilding production capacity. 3 Mil.Cgt Structural imbalance between supply and demand: 50% of the global shipbuilding production capacity is idle

Mare Forum Italy 2013 MARKET SCENARIO: SHIPPING & SHIPBUILDING 4 In term of value, investments stand at 100 BillUS$ compared to more than 250 BillUS$ in 2007 And, as a consequence, prices are declining: 2012 Clarkson Newbuilding Price Index stood 32 points below 2007 level. BillUS$ 2007= BillUS$ Prices comparable to those of 10 years ago

Mare Forum Italy 2013 MARKET SCENARIO: NICHE MARKETS 5 In the medium term, demand forecasts are not favorable and outline a state of structural imbalance between supply and demand. This implies the need to face a very challenging competitive scenario and choose the right market positioning. In general, European shipbuilding has lost market share and reduced employment; but some European shipbuilders have managed to maintain a strong position in highly specialized and qualitatively outstanding vessels, developing new high-technology solutions and innovative production processes to existing markets and new ones. Fincantieri has pursued a niche strategy. Since many years, it is a market leader in the field of cruise ships and confirms its engagement in this sector for the future. In general, niche markets are more attractive because they are more resilient to the crisis. Long term view Niche market

Mare Forum Italy 2013 MARKET SCENARIO: NICHE MARKETS 6 Offshore Market scenario suggests that, for the European shipbuilders specialized in high tech products, being unrealistic to switch again to standard / mass ships, there is no alternative but to preserve their niches and to look for the opportunities rising in other niches characterized by: positive market prospects high technological content high innovation rate Offshore and green niches comply with these features. The energy and environmental sectors are growing and require to design: ˗ green-ships to meet higher environmental standards ˗ new offshore units for the exploitation of oil & gas fields and renewable energy (wind, tidal, etc,.) Niche market

Mare Forum Italy 2013 FINCANTIERI STRATEGY: OFFSHORE 7 Fincantieri has reacted to the long-lasting market contraction entering and possibly growing in the offshore market, pursuing a strategy of diversification in order to retain long-term competitiveness. Fincantieri strategy The entrance in the offshore market is being achieved through: through the acquisition of STX OSV (renamed VARD) capitalizing on the past experiences of construction of big and customized offshore units external growth internal development

Mare Forum Italy 2013 The strategic rationale of Vards acquisition is: to enter into a market segment complementary to Fincantieris current ones, through the acquisition of a world leader in the construction of offshore support vessels; to benefit, after the acquisition, from 21 shipyard locations in 3 different continents, positioned in strategic areas (e.g.: US/Golf of Mexico, Brazil, North Sea, Vietnam, UAE,…); to enhance technologic capabilities through the fertilization with one of the main players in the segment of high-end offshore support vessels; to achieve a financial outstanding position at a worldwide level, reaching revenues of Euro 4 billion, becoming the first Western shipbuilder. FINCANTIERI STRATEGY: OFFSHORE External growth 8

Mare Forum Italy 2013 FINCANTIERI: THE FIFTH SHIPBUILDER IN THE WORLD (2) Revenues of key shipbuilding companies worldwide (1) Euro Billion, 2011 (3) Source: Companies Annual Report, specialized press (5) 9 FC = 2,4

Mare Forum Italy FINCANTIERIS NETWORK (1)JV agreement with Al Fattan Ship Industries and Melara Middle East (2)JV agreement with ABB S.p.A. (3)Under construction 21 shipyards Approx direct employees of which in Europe

Mare Forum Italy 2013 The internal development is being pursued: through the creation of a dedicated business unit (Fincantieri Offshore) focused in building drillships, semisubmersible drilling rigs and other specialized offshore vessels; the establishment of an integrated value chain of specialized Italian offshore suppliers (Polo Offshore) FINCANTIERI STRATEGY: OFFSHORE Internal development 11 Electrical manufacturer and designer Offshore design / engineering

Mare Forum Italy 2013 Offshore Support & Supply vessel FINCANTIERI OFFSHORE 2013 Drillship Product. platforms Special VslSeismic Vsl.Crane Vsl.Pipe-laying Vsl Semi Sub (SSDR) FSOOceanographicDiving/ROV Vsl.Cable Laying Vsl Drilling barges FSRU Barges Jack-upFPSOHeavy Lift Vsl Offshore subsea Construction Vsl., AHTS PSV Oil Well Production Vsl., Survey Vsl., Emergency Response/Safety Standby Vsl., Survey Ship ROV Vsl Well Intervention Vsl. Diving Support Vsl. Accommodation Vsl. Offshore family products include a wide range of ship types serving different phases of an oil & gas project (from the initial survey activity to the final de-commissioning of a production plant) and carrying out different tasks. Fincantieri has decided to focus on…

Mare Forum Italy 2013 FINCANTIERI: STRATEGY & ORGANIZATIONAL MODEL 13 Fincantieri has reacted to the challenging market conditions: implementing a rationalization program consisting in the integration of the production sites and centralization of a number of key processes; reaching innovative agreements with the trade unions aimed at increasing flexibility; pursuing a strategy of internationalization, launched in 2008, with the acquisition of the US company Manitowoc Marine Group (now Fincantieri Marine Group). Some markets, like US or Brazil, can be served only through domestic companies or, in other case, shipyards location in strategic areas (e.g.: US/Golf of Mexico, Brazil, North Sea, Vietnam, UAE,…) is a strength; focussing products characterized by high innovation rates and developing its product range in line with the green issue. Fincantieri

Mare Forum Italy 2013 FINCANTIERI: CONCLUSION 14 Fincantieri, as we used to know it so far, was born following the crisis of the Eighties, when it was necessary to abandon the role of generic shipbuilder, mainly committed to Italian shipping companies and till 2000 supported by governmental subsidies. This change has contributed to the growth in the cruise shipbuilding sector and to the survival and the success of the Company in the market. Today Fincantieri is firmly convinced that in order to overcome this long lasting crisis it is necessary to proceed with: the internationalization of the Company; the continuous improvement of its technological know-how, progressing from medium-tech products to high-tech ones. and this is what we believe is the Fincantieris way forward. Fincantieri

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