CEO Massimo Perotti outlines group’s sustainability plans, new models and latest financial performance at Cannes

Massimo Perotti, Sanlorenzo’s executive chairman and CEO, higlighted the actions the group is taking towards sustainable sailing at its annual press conference at the Cannes Yachting Festival this week, emphasising plans to reach net zero emissions by 2040. He also discussed the group’s consistently strong financial performance and provided an update on its latest new product developments.

In respect of the group’s fiscal performance, Perotti commented on the results for the first half of 2023 which saw the period close with revenues from the sale of new yachts amounting to €388.4m, up 12.6% compared to the first half of 2022. The group now boasts a gross operating margin (EBITDA) of €67.7m (+20.3%) and a net profit of €39m (+20.0%).

“I am incredibly proud to present excellent results,” Perotti remarked, “achieved thanks to the commitment and passion of all the teams that constitute Sanlorenzo, to whom I would like to extend my special thanks.

“We are revising upwards the guidance on the results expected for the current year, on the strength of a very satisfying first half of the year and a massive order backlog which on June 30, 2023 exceeded €1.4bn, but above all of high quality, because 90% of it is guaranteed by contracts signed with end clients.

“This performance is the result of our business model, which has proven to be absolutely reliable over the years, and which provides us with reassurance for the years to come, along the path that will see us pioneer the sector towards carbon neutrality, a central priority in our route to 2030.”

Perotti pointed to Sanlorenzo being a forerunner in the drive towards carbon neutrality in the yachting world through the continuous work of its R&D department, resulting in the group taking revolutionary steps in introducing technological systems to reduce the environmental impact of yachts.

Perotti highlighted that although yachting accounts for only 0.22% of the total GHG emissions of the entire shipping sector, (Source: IMO-International Maritime Organisation, 2021), multiple pressures are pushing companies to adapt to rapid changes and re-evaluate their priorities: on the one hand, yacht owners increasingly focused on adopting sustainable solutions; on the other, the IMO’s stringent plans to achieve net zero by 2050.

He outlined Sanlorenzo’s plan to try and reach net zero emissions by 2040, some 10 years ahead of the IMO target. The shipyard’s wealth of expertise and experience has enabled it to sign strategic cooperation agreements with the world’s leading energy and e-fuel players. These include the exclusive agreement signed in 2021 with Siemens Energy for the integration of the fuel cell system capable of transforming green methanol into hydrogen and subsequently into energy – an innovative solution that will appear with the new 50m (164ft) 50Steel line, a superyacht whose first unit will be delivered in the summer of 2024.

Another innovation that will be developed on this superyacht is the HER (Hidden Engine Room) system, which, through a new arrangement and location of the propulsion equipment and the technical area on the under lower deck, frees up unexpected volumes for the owner’s areas.

A further exclusive agreement was signed with Rolls-Royce’s Power Systems business unit, through its mtu brand of products and solutions, for the installation of hydrogen propulsion systems made from green methanol. These solutions will be combined with fuel cells supplied by Siemens Energy and will initially be installed on a Sanlorenzo superyacht prototype.

The yacht segment below 24m (78.5ft) sees the Bluegame arm of Sanlorenzo being engaged in the design and construction of the BGH HSV (Hydrogen Support Vessel), the first ‘chase boat’ with hydrogen propulsion and the use of foils to reach a speed of 50kt and zero emissions, which will literally ‘fly’ alongside the New York Yacht Club’s American Magic, challenger in the 37th edition of the America’s Cup in 2024.

It was a very complex project which has occupied the Bluegame development team on several fronts, with the ad hoc realisation of mechanical and electrical parts, including the engine. The team’s effort was rewarded even further by the news, kept strictly confidential for months and released at the press conference, of the signing of the contract between Bluegame and K-Challenge LAB, the company that owns the French Orient Express Racing Team, also a challenger in the 37th edition of the America’s Cup.

Building on the experience of the BGH-HSV project, the BGM65HH (hydrogen-hybrid) multihull project is taking shape, scheduled to be launched in 2026 and which will allow sailing with zero emissions for 80 miles, so 10 hours at 8kt.

Sanlorenzo also announced a strengthening of its direct distribution and customer service offering. A new development, made known in the press conference, was the establishment of ‘Sanlorenzo Côte d’Azur SAS’ for the distribution of the group’s products and services in the Côte d’Azur, a key market for the yachting industry.

Consistent with this exclusive marketing strategy, the Sanlorenzo Monaco Lounge, said “to be the first of a number around the world”, will also be inaugurated during the Monaco Yacht Show, with offices near the Monte Carlo marina – an exclusive location dedicated to yacht owners that embodies the DNA of the Sanlorenzo Maison.

Following an overview of the shipyard’s latest steps and the progress of the 2023-2025 Industrial Plan, it was the turn of the world premiere innovations presented at CYF 2023, which are the SX100 and BGM75.

The SX100 is a further model in Sanlorenzo’s innovative range of crossover yachts and it builds on the success of more than 60 sales of the SX88. Also being exhibited at Cannes are the SL78, SL86, SL90A, SL106A, SD90, SD96, SX76 and SX88; and the SP110.

A number of future new models were also referred to such as:

  • the SP92, which will meet the call from owners of the SP100 for a smaller model. It will debut at CYF 2024
  • the SD132, a new flagship of the Sanlorenzo Yacht Division, to launch in spring 2025

As for Bluegame, with the brand-new BGM75, the Sanlorenzo group’s first multihull, the brand will launch a fourth BG series, namely the BGF(Bluegame Foil). The first model will be a BGF45 in 2026.

On Bluegame’s quay, the BGM75 will share the spotlight with another premiere present at Cannes: the BGH-HSV (Hydrogen Support Vessel), the chase boat that will join American Magic, challenger to the 37th America’s Cup in 2024. Alongside the BGM75 and BGH, the BG42, BG54 and the new BG74 and BGX63 models are being exhibited.

Other developments within the group include ongoing talks to buy Simpson Marine in Asia ,where due diligence processes are continuing and it has taken longer to address the various jurisdictions in which the company operates.

Within Sanlorenzo’s High End Division, the buying of the Equinoxe charter business has been completed and the Sanlorenzo charter fleet will be expanded. Also more owners want their yachts refitted by the group so additional space is being allocated to grow this activity.

The full group financials are as follows:

 1H 2023 (€m)1H 2022 (€m)% change
Net revenue new yachts 388.4 344.9 12.6%
EBIT 53.1 44.3 19.9%
EBITDA 67.7 56.3 20.3%
Group net profit 39.0 32.5 20.0%
Organic investment 13.1 17.6 -25.6%
Net financial position 140.5 100.3 40.1%

In respect of the above figures, Perotti spoke of a slowing down in ‘Net revenue new yachts’ but indicated that the full-year figure increase would be similar to 2022. With both the EBIT and EBITDA, he spoke of great and consistent rises.

Regarding investment, this was less than last year due to ongoing supply chain issues following the Covid pandemic which caused production issues, but again the full-year total is anticipated to be around €50m which will be similar to the previous year.

The €40m increase in the group’s net financial position, Perotti emphasised, was good following the €30m paid out in dividends in May 2023 and this rise showed the strength of the business in both cash and liquidity terms.

In terms of the guidance for 2023, this has been revised upwards in the following ways:

  • Net revenue new yachts: increased 13.4% to a range of €830m-€850m
  • EBITDA: a rise of 21% to between €155m-€160m
  • EBITDA margin: up 1.1% to 16.6%-18.8%
  • Group profit: an upward revision of 17.9% to €86m-€89m
  • Capex: a forecast of 5.8% of €48m-€50m
  • Net cash position: a 35-45% upward revision to €135m-€145m

Looking at the share price performance, in the period since the IPO on December 10, 2019 to March 3, 2023, the price rose 174%, going from the €16.0 launch to €43.8. Perotti commented that this growth “was second-only to two leading luxury sector businesses.”