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Sanlorenzo reports solid first-quarter performance for 2020

Business
Written by
Georgia Tindale

Despite the pressures posed on the entire industry by COVID-19, the Italian yacht builder Sanlorenzo has reported positive financial results for the first quarter of 2020, with an increase in both sales and profits recorded. Sanlorenzo 62Steel superyachtPhoto: SanlorenzoFollowing closures of its facilities due to the global pandemic which began on 23rd March, the Group partially resumed its activities on 14th April and was able to fully reopen all of its plants on 4th May. In recently-released financial statements, which concern results up to 31st March 2020, Sanlorenzo confirmed that it had achieved consolidated net revenues from the sale of new yachts of €97.9 million, which represents an increase of 11% compared to the €88.3 million recorded in the first quarter of 2019 (or 17.9% with the same scope of consolidation).

Other key figures from these Sanlorenzo financial results included a consolidated EBITDA (earnings before interest, taxes, depreciation and amortization), of €13.3 million, which demonstrates an increase of 45.5% in comparison to the €9.2 million recorded the first quarter of 2019 and corresponding to 13.6% of the total net revenues of new yachts. 

Furthermore, Sanlorenzo’s consolidated EBIT (earnings before interest and taxes) were equal to €8.8 million, representing an increase of 58.5% compared to €5.6 million in the first quarter of 2019 and corresponding to 9.0% of the Group’s net revenues for new yachts.Sanlorenzo yacht fleet cruisingThe Group’s net profit for the first quarter of 2020 was €5.9 million, demonstrating an increase of 84% compared to the €3.2 million recorded in the first quarter of 2019. Furthermore, the Group’s net financial position as of 31st March 2020 stood at €60.7 million, compared to the €9.1 million recorded on 31st December 2019. Sanlorenzo 44 Alloy yacht renderingPhoto: SanlorenzoBreaking the results down into divisions, Sanlorenzo’s Yacht Division generated net revenues for new yachts of €64.2 million in the first quarter of 2020, corresponding to 65.5% of the total and showing an increase of 18.8% compared to the same period during 2019. 

The Superyacht Division generated net revenues for new yachts of €27.0 million, corresponding to 27.6% of the total and representing an increase of 2.9% compared to the  In addition, the Bluegame Business unit of the company also saw an increase in net revenues, generating €6.7 million - up by 144.2% compared to the first quarter of 2019 and corresponding to 6.9% of the total.SanLorenzo SL96 Asymmetric exteriorPhoto: SanLorenzoIn terms of the regional performance, Europe - the Group’s historical market - accounted for €59.9 million in net revenues for new yachts (of which €18.8 million was generated in Italy), which stands at 61.1% of the total. The Americas stood at €15.2, representing an increase of 115.5% compared to 2019’s first quarter and corresponding to 15.5% of the total: a result described by Sanlorenzo as being in line with its “strategy to increase penetration in this geographical market.” Sanlorenzo FleetPhoto: Guillaume PlissonThe Asia-Pacific area actually showed a decrease, generating net revenues for new yachts of €14.2 million, which is down by 13.2% compared to the first quarter of 2019 and equates to 14.5% of the total. That said, however, Sanlorenzo enjoyed significant growth across the Middle East and Africa in the first quarter with net revenues for new yachts up by 95.6% in comparison to the previous year and reaching €8.7 million: a fact which the company attributes predominantly to the growth of its Superyacht Division.SanLorenzo shipyard facility in Ameglia Photo: SanLorenzoFinally, the Group’s investments in the first quarter of 2020 amounted to €6.4 million compared to €12.9 million in the first quarter of 2019, of which €3.3 million were linked to product development and to the creation of models and moulds, and €2.0 million to its programme of increasing production capacity. Indeed, this major investment plan to boost capacity is now close to completion at Sanlorenzo, with the inauguration of the new production site in Ameglia taking place earlier this year (which spans a total surface area of 135,000 square metres). 

Notably, as the Group sees it, the significant increase in profit margins which they have enjoyed so far can be attributed to “the progressive increase in the prices of new orders, thanks to the improved commercial positioning of the Company and the savings generated by the start-up of new production capacity following the investments made in 2019 and the first few months of 2020.”

Massimo Perotti Photo: SanLorenzoIn a statement released alongside these results, Massimo Perotti, Executive Chairman of the company, said: “The results for the first few months of 2020 once again confirm the validity of our business model, which has proven its resilience in the different phases of the economic cycle. All of the indicators are recording positive performance, as expected, particularly in terms of profitability, which benefits from the effects of the major investments already made to increase production capacity, which has led to a considerable improvement in the efficiency of all sites.”

He continued, “An important factor in the future stability of these results was Sanlorenzo’s rapid response, which in just two weeks from the closure of activities on 23 March, thanks to the health protocol signed on 7th April, to good relations with all social parties and the support of the authorities in the regions we operate in, was able to fully resume production activities in all plants on 4 May, thanks particularly to the partial reopening from as early as 14 April of the Ameglia and La Spezia sites, and from 20 April for those in Viareggio and Massa."SanLorenzo shipyard facility in Ameglia Photo: SanLorenzo“We were, therefore, able to reopen the sites rapidly and in full safety, cutting the overall suspension of activities to just 28 days. From March, a plan to cut operating costs and deferrable investments was implemented, maintaining investments relating to new products, innovation and sustainability. The measures set in place, combined with the significant visibility provided by the backlog of €500 million, 92% of which covered by end customers, enables us to forecast performance for this year in line with the results achieved in 2019.”

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