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Edited Transcript of FCT.MI earnings conference call or presentation 25-Jul-19 7:00am GMT

Q2 2019 Fincantieri SpA Earnings Call

Trieste Jul 30, 2019 (Thomson StreetEvents) -- Edited Transcript of Fincantieri SpA earnings conference call or presentation Thursday, July 25, 2019 at 7:00:00am GMT

TEXT version of Transcript

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Corporate Participants

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* Alberto Maestrini

Fincantieri S.p.A. - General Manager

* Giuseppe Bono

Fincantieri S.p.A. - Interim EVP of Naval Vessels Division, CEO & Director

* Giuseppe Dado

Fincantieri S.p.A. - CFO

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Conference Call Participants

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* Emanuele Gallazzi

Equita SIM S.p.A., Research Division - Research Analyst

* Gabriele Gambarova

Banca Akros S.p.A., Research Division - Analyst

* Matteo Bonizzoni

Kepler Cheuvreux, Research Division - Equity Research Analyst

* Monica Bosio

Banca IMI SpA, Research Division - Research Analyst

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Presentation

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Operator [1]

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Good morning. This is the Chorus Call conference operator. Welcome and thank you for joining the Fincantieri First Half 2019 Results Conference Call. (Operator Instructions)

At this time, I would like to turn the conference over to Mr. Bono, Chief Executive Officer. Please go ahead, sir.

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Giuseppe Bono, Fincantieri S.p.A. - Interim EVP of Naval Vessels Division, CEO & Director [2]

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Ladies and gentlemen, good morning and welcome to our first half results conference call. Let me start by saying that despite some challenges, notably in offshore business, we achieved excellent results of growth rate. Our revenues increased by 12% and EBITDA by 17%. These impressive results marks the seventh consecutive semester of revenue growth. ta

We expect this trend to continue, as we are expanding our production by investing in the restructuring our yards. The success of this strategy shows in the profitability increase that we can achieve in the next year. The net result was (inaudible). This net value is impacted by charges of asbestos-related claims and taxes, less 70%.

(inaudible), we reached an order record in a single semester. We signed into contract totaling EUR 6.6 billion for 15 units. 11 of these are cruise ships, including several very notable projects, with particular focus on more efficient, eco-friendly production systems.

We have decided (inaudible) for the future. This takes our total backlog to 108 units, 98 of which are firm orders, with delivery date at 2027. We also delivered 15 units from 11 different shipyards. In February, we delivered Costa Venezia, the best cruise ship built for this brand to be (inaudible) to the Chinese market. She is having quite a success.

(inaudible) confirm our leadership in innovation, we will continue to develop our center of excellence in delivering these technology services. So (inaudible) here internal coordination of structure to oversee our IP activities, and we are working on expanding our skills in cybersecurity and automation.

I will now give the floor to Mr. Maestrini, our General Manager, who will run you through the rest of the business update.

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Alberto Maestrini, Fincantieri S.p.A. - General Manager [3]

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Thank you, Dr. Bono, and good morning to you.

We start from the cooperation between Italy and France. In June this year, we have achieved an important milestone in the Poseidon project, as we have signed the Alliance Cooperation Agreement with Naval Group. This sets the basis for the incorporation of a 50-50 joint venture. This is a very important step in the process of creation of a more efficient and competitive European Shipbuilding industry, Italy and Fincantieri have shown its leading road. The joint venture will be incorporated in the coming months, and we already have launched important projects to work on.

On the same topic, a quick update on Chantiers de l'Atlantique. We are currently progressing in the prenotification phase for an open dialogue with the European authorities. We'll keep you updated when something new will occur.

Moving forward to our U.S. naval business. Through our Marine subsidiary, we are working to submit our proposal for the future frigates program, FFG(X) following the issue of the request for proposal by the U.S. Navy at the end of June. According to its request, we will submit our technical proposal in August and a related financial proposal in September. We expect the final decision to be taken sometime in mid-2020.

Now focus on the update of this first half year. In order to support our business growth, we have increased the headcount in Italy by 3%. It means there are more than 300 new employees. Considering the Group (inaudible) employment will multiply by approximately 9 times. This increase allows us to create more and more jobs, directly and through our subcontractor network.

Our outstanding contribution to the Italian community expands through PERGENOVA. Our joint venture to manage the construction of the bridge over the Polcevera river. The first span of the bridge is now right in the yard and the first deck is being completed, with the contribution of the newly inaugurated Fincantieri Infrastructure client, based in Valeggio sul Mincio and the Castellammare di Stabia shipyard.

We keep on focusing on sustainability, a key aspect of our business. These first 6 months, we signed important agreements on environmental and social matters. An outreach development of new postgraduate courses, in university and technical institutes on specific subjects, particularly interested for our company, and may help support our business growth. We are also launching activities that aim at reaching the challenging targets set out in our sustainability plan.

I'll now let Mr. Dado, CFO, run you through the financials. Thank you.

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Giuseppe Dado, Fincantieri S.p.A. - CFO [4]

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Good morning, everybody. If we can move to Page 6. Well, in the first half of 2019, as we already mentioned, we have set new record of order intake, at the end of June, at EUR 6.6 billion. Most of the orders, of course, were realized in the first quarter of the year. What needs to be noted is, we signed 11 units in the cruise segment, with 5 different ship owners, brands, corresponding to 4 different companies; amongst them Norwegian Cruise Lines, MSC and Viking, who are really longstanding clients of ourselves.

We also acquired an order for a further unit of the Littoral Combat Ship program, the LCS 31, and we would like to point out that in just 10 years -- in the past 10 years, the Group's American yards have successfully delivered 8 units of the LCS program, and are working on the construction of additional 8 units.

The soft backlog of the Group is down at EUR 3.6 billion, and this comes as no surprise after the -- before the acquisition we have realized in this period. The firm backlog, as a matter of fact, went up 34% versus first half 2018 to EUR 27.8 billion. The total backlog is still over EUR 33 billion and it's equal to 6 -- roughly over 6 times of fiscal year 2018 revenues and it includes 108 units, of which 98 in the backlog.

We can move on to Page 7. The breakdown by segment of the backlog deployment shows us that we have delivered 15 units during the first half of 2019, from 11 different shipyards. Two cruise ships, 3 expedition cruise vessels, and 2 naval units and 8 offshore vessels. 16 additional units are currently scheduled for delivery in the remaining part of the year. Well, as you can see, we further strengthened our backlog in cruise, with adding 3 ships in 2023 and one in 2022. And of course, we have other more than 10 units scheduled after 2023.

Moving now to Page 8, revenues. As already mentioned, we are up 12% at EUR 2,837 million. Shipbuilding revenues are up 13% versus first half of 2018 and this comes as a result of increase in cruise revenues, by roughly 10%, and an increase in naval revenues of over 20% -- 22.1%. And this is mostly driven by the higher production volumes related to the construction of cruise vessels of larger size, and to the progress in the naval business of construction activities related to the Italian program and a Qatari program.

In the Offshore and Specialized Vessels segment, revenues were down 5.7%, and it was mainly affected by the slowdown in production volumes related to a reduced use of production capacity.

Last, equipment systems and services, up 15.3% in terms of revenues, and this confirms the growth trend that started in the first half of 2017 already. Of course, key factors of this growth are the development of the significant order backlog for services provided in the context of all the military contracts, and an increase in the volume of ship repair and conversion activities.

And last but not least, the contribution of the Fincantieri Infrastructure activities, the building of the bridges, as Mr. Maestrini has mentioned before.

Now on Page 9, EBITDA. We closed the semester at EUR 215 million, up 17% versus the first -- the same period of last year, with EBITDA margin at 7.6%. This -- and this comes, I would say, mainly -- uniquely, I would say, from the very positive performance of the Shipbuilding segment that's -- and this confirms the soundness and the robustness of the drivers identified in the business plan that we presented in 2018. And this is with particular reference to de-risking of the portfolio in the cruise business and the growth in revenues coming from the increased price of vessels.

In Shipbuilding, EBITDA was up 42.2%, with a margin -- with a double-digits margin at 10.2%. It was 8.1% in the first half of last year. And this benefited from the construction of higher-margin sister ships and crews and the progress of construction activities related to the naval program.

In the first half of this year -- I mean, to link financials to operations, you remember that we launched 2 units of the Italian Navy program, the LHD, the Landing Helicopter Dock and the first patrol vessels -- vessel for the Italian Navy. The segment is therefore moving on a longer path identified in the business plan, and this is -- comes despite the low profitability of the cruise projects we have in Vard.

In the Equipment Systems and Services, EBITDA is up 14.7%, with the margin at 10.2%. The margins are broadly in line with the first half of 2018, despite the higher contribution of conversion and refurbishment projects that, as you know, have a lower profitability, with respect to the other businesses embedded into these segments.

Of course, these projects, notwithstanding the lower profitability, are strategically important since they enable the development and maintenance of client relationships and order backlog, and contribute to the increase -- to increase of the utilization rates of some Italian shipyards.

On the Offshore and Specialized Vessels segment, we have negative EBITDA at EUR 52 million, with a margin of minus -- almost minus 17%. And this just -- this comes from many, many reasons. First of all, the total absence of orders related to the oil and gas sector over the past 2 years has led to the acquisition of orders of new specialized projects belonging to different, let me say, market segments. And those occasional projects -- there are some occasional projects with that potential, but of course they go side by side with orders that have very low margins.

Of course, the prototype projects, as expected, absorb more resources during their development, but they allow us to obtain the necessary know-how for future innovative projects.

On the offshore and on Vard as a whole, we are currently developing a restructuring plan, with the aim to recover margins in the medium term. And this restructuring plan will both leverage on the experience acquired in the development of the innovative projects; and of course will leverage on the fact that we are trying to streamline as much as possible, production activities -- streamline and optimize as much as possible, good production activities both in Romania, which remains the core hub for both Fincantieri and Vard, and Norway.

On Page 10, the net results. The adjusted net results before the extraordinary nonrecurring items stand at EUR 34 million. We have -- with respect to the first half of last year, we have increased FX charges, due to the financial expenses for the derivatives, this is the way we account for hedge accounting. As expected and as I have declared in the past, we are at the peak of this type of cost, because in October and February, we are bound to deliver 2 cruise vessels, whose contracts are denominated in dollars. Therefore the hedging costs -- you see most of the hedging costs due in 2019. Those costs were partially offset by the reduced and realized losses associated to the conversion of a loan taken out in US dollars in our Brazilian operations.

The extraordinary and nonrecurring items for the period are EUR 18 million for asbestos-related litigations. There were EUR 32 million in the first half of 2018 -- this is positive, and EUR 7 million of charges for business reorganization plans related to Vard. This brings a net result of EUR 12 million, and net income attributable to the Group is EUR 16 million.

On the CapEx side, Page 11, we have spent EUR 102 million in the first half of this year, up from EUR 44 million in the same period last year, and those expenses are mainly for the revamping of the operating areas and infrastructure of certain Italian shipyards. This is to make them more, let me say, compliant with the production scenario that we have in front of us, in order to be more efficient. The improvement of safety standards for property, plant and equipment; and the continuation of activities to expand the production capacity in Vard -- in the remaining yards of Vard both to support the construction of hulls and a multiyear program to build pre-fitted cruise ship blocks and sections for the Italian yards of Fincantieri.

On Page 12, net working capital, it has slightly increased to EUR 103 million compared to the EUR 44 million we had at the end of 2018, and this comes from a decrease of inventories, this is mainly due to the delivery of a vessel previously accounted for as inventory, following the order cancellation of -- by the original owner. We had a slight increase of the work in progress. This is due to growth in production volumes in the first semesters, net of the deliveries, of course, and a decrease of trade receivables, that's because we cashed in the final payment installments for delivered units.

Our net financial position. Net debt has increased to EUR 724 million, and it's stayed consistent with the investments and the CapEx we have done in the first half of this year, and the cruise business dynamics. Please note that we have roughly EUR 700 million of cash that we have raised during some prefunding, in order to be prepared to support the second half -- the needs -- the net working capital needs for the second half of the year. As I mentioned before, the second half of the year will see an increase -- a further increase in production activity in cruise as we have, I believe, 5 deliveries of cruise vessels in the first half of 2020.

How do we see the future? Page 14. Again, despite the challenging context in the Offshore and Specialized Vessels sector, very good performance of the Shipbuilding segment allows us to reiterate the Group guidance for 2019. As we already pointed out, this year is expected to be broadly in line with 2018, also with a temporary increase in net debt, due to net working capital financing needs.

In the Shipbuilding segment, we have 4 units scheduled for delivery in the next quarters, of which 3 cruise units and one naval vessel. We are also in full swing production with respect to the Qatari order, with 3 units currently under construction, and the first delivery scheduled for 2021.

In the Offshore and Specialized Vessels, we will keep up with the construction activity for the backlog, acquired as a result of the diversification strategy. And of course, we will maintain our focus on execution, aiming at margin recovery. And of course, as I said before, we are in the process of defining a restructuring plan that will include initiatives focused on the medium-term profitability recovery, and also, we will want to leverage on the experience on innovative projects that we have so far done with Vard. And of course, in the development of technologies, in segments that are not directly linked to the oil and gas sector, which, as you all know, is not requiring, let me say, newbuilds anymore for the moment.

As for the equipment systems and services, we already confirm the growth plans, with the development of naval orders, to the higher volumes of production of cabins and public areas for the cruise business activity, to the lengthening and refurbishing projects and to the activities in the infrastructure sector where, as we mentioned, we started the construction of the bridge over the Polcevera river in Genoa.

Thank you for the attention, and we are now ready to take questions.

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Questions and Answers

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Operator [1]

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(Operator Instructions) The first question is from Monica Bosio with Banca Imi Intesa Sanpaolo.

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Monica Bosio, Banca IMI SpA, Research Division - Research Analyst [2]

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The first one is on the offshore. Basically, the consolidated results were better than expected, as per my estimates, because the Shipbuilding more than offset the much higher losses -- the expected losses in the Offshore. So I remember that in occasion of the first quarter, the Company guided for the achievement of the breakeven in the last quarter of the year for the offshore. I'm just wondering if, given EUR 52 million of losses in the first half, this guidance might be confirmed? I believe it will be difficult. If you can give us more flavor on the achievement of the breakeven for the offshore division. And in the second part of the year, Fincantieri will have to deliver 12 Offshore and Specialized Vessels, and I was wondering if you can say how many specialized vessels not belonging to the offshore -- traditional offshore segment. How many are these?

And the second question is on the Shipbuilding, which was much stronger than expected. The EBITDA margin in the first half was above 10%, and in the second quarter, above 12%. Can we expect a second half in line with the first half in terms of EBITDA margin? And very last is on the net revenues, in the first half, net revenues were up by 12%. I remember that in occasion of the first quarter, the Company guided for a high single-digit growth over the full year. Is it still the case or can we be a little bit more optimistic? Thank you very much.

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Giuseppe Dado, Fincantieri S.p.A. - CFO [3]

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On Vard, we said -- I said actually that we expected breakeven by the end of the year. Yes, I said that I think that on a single quarter basis it could be still achievable. Of course, we must recognize that Vard needs a cure, in a way, we are certainly striving to improve the operations, the efficiency of operations in Vard, and of course, we mentioned that the -- that performance on several types of vessels and how many are there? There are, I believe, we are in the range of almost 10 vessels I would say spread out between, ferries, fishing vessels. We have an exploration vessel. So this diversification of course brings challenges in the operational side and those challenges, of course, are coupled with the fact that we are not using all the production capacity that we have in Norway at this point in time. Whilst we are increasing the efficiency of the production capacity in Romania. Romania will -- is, let me say, moving it towards production levels that will be comparable with the production levels of our main yard in Italy, in terms of 1,000 tons per month.

Again, let's move back to Norway. Norway is by all means underutilized at this point in time. And the production capacity that we are utilizing, we are using it for the construction of several types of vessels that were not acquired, let me say, at good margins. Therefore, what we expect, as long as we get rid of those vessels and deliver those vessels, of course, we are striving to contain the losses, as long as we deliver these vessels, we will start picking up the margins, because when we deliver those production and margin contribution of newer projects will kick in. We expect this to occur, end of the year single quarter, of course, I don't expect breakeven for the total year 2019. But of course, in 2020, we do have expectations to reaching and passing breakeven on offshore. We must achieve this target.

On Shipbuilding, again, we reiterated our guidance for the total Group. Of course, yes, we are performing very well. When it comes to margin, we have had a margin improvement in the second quarter and in the whole year of 2019. We do expect to continuing the good performance. But look at -- we talked about this many times. But look at the deployment of our backlog, and first half of 2020 is pretty challenging. Not, in terms of risk -- not in terms of prototypes, let me say, but in terms of size and the sheer number of vessels that we expect to deliver. So when volumes increased before we achieve and reap the benefits of this volume increase, we like to be a bit prudent. So therefore -- I don't want to be more specific than that. I know I'm not being specific. But we reiterate the guidance at Group level and we'll stick to that target.

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Monica Bosio, Banca IMI SpA, Research Division - Research Analyst [4]

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Okay.

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Giuseppe Dado, Fincantieri S.p.A. - CFO [5]

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Is that it?

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Monica Bosio, Banca IMI SpA, Research Division - Research Analyst [6]

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No. Also for the revenue growth by year-end?

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Giuseppe Dado, Fincantieri S.p.A. - CFO [7]

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Yes, of course. Also revenue growth.

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Monica Bosio, Banca IMI SpA, Research Division - Research Analyst [8]

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So high single digit or…

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Giuseppe Dado, Fincantieri S.p.A. - CFO [9]

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Sorry?

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Monica Bosio, Banca IMI SpA, Research Division - Research Analyst [10]

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I remember that you guided for high single-digit growth in the third…

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Giuseppe Dado, Fincantieri S.p.A. - CFO [11]

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That's confirmed.

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Operator [12]

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The next question is from Matteo Bonizzoni with Kepler Cheuvreux.

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Matteo Bonizzoni, Kepler Cheuvreux, Research Division - Equity Research Analyst [13]

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I have 2 question. The first one is related to the decline of the risk provision, quite a sizable decline of risk provision that we saw in this first half to EUR 80 million compared to EUR 135 million at the end of Q1 and the risk provision were constantly above EUR 100 million over the last year. So I wanted to ask this EUR 55 million of decline of risk provision in just one quarter, where it comes from? And if you plan to restore risk provision to more than EUR 100 million going forward? So this is the first question. The second question is, as regards net debt target that you have for 2019. So according to the business plan, if I am right -- so you had a net debt in excess of EUR 600 million at the end of the first half, what should we expect at the end of the year, higher or lower? Excluding IFRS 16, you were EUR 647 million, to be precise, at the end of June. What should we expect in the second half as regards to net debt evolution? Thanks.

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Giuseppe Dado, Fincantieri S.p.A. - CFO [14]

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Okay. On the risk provisions, 2 factors have led to the decrease. First, we settled the litigation on the mega yacht, Serene. So we released the provisions made for this litigation. And as you noticed, we have a lower -- we've had a lower amount of provisions on asbestos claims. Okay? Those are the major -- 2 main reasons why the risk provisions decreased to EUR 80 million.

On net debt, the answer is easy. We do expect an increase in net debt compared to the EUR 600 million. Production activity will pick up at a good pace in the second half. We have, I believe, 5 deliveries in the first 6 months of next year. And of course cruise vessels, we need to fund and support this growth, and therefore net debt will increase. Temporarily increase.

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Matteo Bonizzoni, Kepler Cheuvreux, Research Division - Equity Research Analyst [15]

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Okay. In other words, you are confident to deleverage EUR 200 million to EUR 400 million, ex IFRS 16 in 2020. That is the business plan target?

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Giuseppe Dado, Fincantieri S.p.A. - CFO [16]

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That's the guidance at the moment.

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Operator [17]

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Your next question is from Emanuele Gallazzi with Equita.

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Emanuele Gallazzi, Equita SIM S.p.A., Research Division - Research Analyst [18]

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The first question is a follow-up on the margin of the Shipbuilding division. In the second quarter, it exceeded 12%, with significant improvement versus the first quarter. Can you give us any indication on the driver of this profitability increase? Is it related to the Naval Group?

The second question is on the joint venture with the Naval Group. You signed the agreement in June. So I just would like to have a little bit more color on it, and on your expectation in terms of economics from this joint venture. And the very last question is on the Naval segment, if you can provide an update on the ongoing tenders that you participate in worldwide. Thank you.

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Giuseppe Dado, Fincantieri S.p.A. - CFO [19]

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Okay. On the first question, on Shipbuilding margins, as I said before, the good performance of production activity, the good performance in delivery -- and I mentioned the 2 physical -- let me say, technical milestones that we reached in the second quarter, the launch of the 2 vessels for the Italian Navy, together with the fact that, what we said when we published the business plan in 2018, the decrease -- the risking of the backlog in cruise, the higher prices, the higher contribution, naval revenues -- naval revenues grew much more than cruise revenues in -- vis-a-vis the first 6 months of last year. Therefore, this brings positive contribution to margins.

Again -- I said it before. This is -- we are reaping the benefits of the drivers we, let me say, pointed out on the business plan. We said that our margins were going to grow, because of lower risk, because we had a lower presence of prototype vessels, and this year, the Italian operations are delivering only sister ships. We said that margins were going to grow because of increased acquisition prices of vessels, and we said the margins were going to grow because of increased activity in the naval business. Now you are seeing all these big drivers at play. Okay?

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Emanuele Gallazzi, Equita SIM S.p.A., Research Division - Research Analyst [20]

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Yes.

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Giuseppe Dado, Fincantieri S.p.A. - CFO [21]

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And the second and third question, I leave the word to Mr. Maestrini.

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Alberto Maestrini, Fincantieri S.p.A. - General Manager [22]

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Yes. Thank you. On the joint venture, as we have already stated in the past weeks, the joint venture will be working on 3 main directions. The first one is enjoying the research and technology projects. Some of them will be presented also for European funding. We will be working also in selected opportunities in [export]. As you know, we are working on it at case-by-case, and we might -- and we are defining targets for the activities of the next -- for the next future.

The third area is in the definition of possible joint binational programs, which of course will depend on the formal discussion between the Italian and the French Navy.

In terms of commercial activity of the -- our naval business unit, as you know, in this period our main focus is on the FFG(X) where our Marine subsidiary is currently focusing. That is a key program, as you know. Our design derived from the FREMM design is getting a very warm welcome. For the other opportunities -- there are several opportunities in many countries of the world. Clearly, these cannot be disclosed while they are ongoing.

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Operator [23]

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Your next question is from Gabriele Gambarova with Banca Akros.

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Gabriele Gambarova, Banca Akros S.p.A., Research Division - Analyst [24]

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The first one is again on offshore. I was wondering if there was any special item that impacted this EBITDA (inaudible) because basically, I was wondering if Q4 is going to be closer to breakeven, let's say, I was wondering if Q3 will be more similar to Q4 or to Q2, basically? This is the first question. The second question is on tax rate, I saw that the first half was around 54%, up from around 42%, so I was wondering if you could give me a guidance for the tax rate for the whole year, 2019. And the last question was again on FFG(X) program. The fiscal proposal is out, and I was wondering -- I mean, basically, you seem it could be the frontrunner in (inaudible) and I was wondering if you believe that any other contender may join the race at this point, and thinking of course of VA systems with (inaudible).

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Giuseppe Dado, Fincantieri S.p.A. - CFO [25]

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Let's start from the third question, and I will ask Mr. Maestrini take it, and then I will take the other 2.

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Alberto Maestrini, Fincantieri S.p.A. - General Manager [26]

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Okay. On the FFG(X), yes I can confirm that our design -- even the original design fulfilled more than 8% of the U.S. Navy requirements. So we started from a very good starting point. In terms of competition, clearly, there is a strong competition. This is a very important tender for the future, the U.S. fleet. Other contenders may clearly join. What we expect is that, and this has happened so far, that the main request would be that any designs presented, fulfills the (inaudible) of having different design that is a sailing ship, and I think that in this point of view, we have a clear advantage. And any way we are -- we believe that our second core advantage is strong, and we will work to leverage this position.

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Giuseppe Dado, Fincantieri S.p.A. - CFO [27]

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Gabriele, on margin expectations. I mean, what's the point of discussing. The next quarter will be better than this quarter, and the (inaudible) than the fourth quarter. What I said is that, we are working on recovering margins. Of course, I do expect a slight improvement in the third quarter, which -- the time when we really need to run the page in this story, end of this year -- end of next year period.

On the tax rate, since -- you see those movements because we -- related to the effect of some businesses of course, you see closed at a loss, and therefore, there is deferred taxation, the changes in a way, the tax rate. But I think that as a whole, we can reiterate the average tax rate of the Group is roughly 30%.

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Operator [28]

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Your next question is a follow-up from Monica Bosio with Banca Imi Intesa Sanpaolo.

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Monica Bosio, Banca IMI SpA, Research Division - Research Analyst [29]

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Just a follow-up. For the [equipment] segment of 2020 is expected challenging in terms of deliveries, 8 deliveries. Can you please remember me, how many prototypes do you expect to deliver in 2020 out of these 8 units?

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Giuseppe Dado, Fincantieri S.p.A. - CFO [30]

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Of course, 8 deliveries it should be 4 deliveries. No. Sorry, 5 deliveries in Fincantieri, out of which 1 prototype Vessel, the virgin vessel in February; 3 deliveries out of Vard, out of which 0 prototypes, I believe. So there is 8 deliveries and 1 prototype.

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Monica Bosio, Banca IMI SpA, Research Division - Research Analyst [31]

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Just one? Okay.

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Giuseppe Dado, Fincantieri S.p.A. - CFO [32]

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Yes.

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Operator [33]

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(Operator Instructions). Gentlemen, there are no more questions registered at this time.

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Giuseppe Bono, Fincantieri S.p.A. - Interim EVP of Naval Vessels Division, CEO & Director [34]

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Well, thank you.

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Operator [35]

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Ladies and gentlemen, thank you for joining. The conference is now over. You may disconnect your telephones. Thank you.