The Italian Sea group analysis TIGS Moram
Results of companies

Italian Sea Group 1H22 Results TISG.MI

The Italian Sea group presented its 1H22 results this week (although it had already shared the main figures at the beginning of August). Revenue and EBITDA have grown considerably (+65% and +94%). Net income was €7.6MM (+65%)

The main driver for this has been the increase in the number of yachts under construction. The work to expand the shipyards as well as the utilisation of the yards from Perini Navi has driven it. Currently, 36 yachts are being built (including 19 Tecnomar Lamborghini 63 – The smallest and most exclusive model in their catalogue)

The order book also increased to €922MM, however, the net backlog decreased to €537MM. The order book is composed of 75.2% Almiral, 11.77% Perini Navi, 5.93% Tecnomar Lamborgini 63, 4.57% Tecnomar and 2.53% Refit. The Refit number is smaller compared to the rest but it is increasingly becoming an important part of the business (maintenance and repair of yachts). It is important as TISG gives service not only to their own yachts but also to other companies’ vessels. Consequently, it is also used as a marketing tool. It is also noteworthy to highlight that only a few months after the Perini Navi acquisition, it is already generating almost 12% of the shipbuilding revenues.

TISG has increased its presence in APAC and mainly in North America. They have recently opened two flagship stores in Porto Cervo and East Hampton (Long Island), the reference point for the yachting industry on the American East Coast. North America represents 14.6% of Shipbuilding revenues in the 1H22, thanks to the contract for an 82-metre mega-yacht, and to the push of the Tecnomar for Lamborghini 63.

Another positive news is the relaunching of the Perini Navi & Pichiotti brands. There are already three Perini Navi yachts under construction at the end of the year. TISG will launch a new version of the Maltese Falcon, one of the most iconic sailing yachts in history. Furthermore, they have just launched the new Picchiotti line and project Panorama.

TISG is also working with EDP Italia to install 5375 solar panels on Marina di Carrara to cover 25% of the group’s energy needs. The work will be finished by the end of 2022.

They reiterated their guidance for 2022, confirming Total Revenues as of December 31st 2022 between €280 and €295 million and an EBITDA Margin of 15.5%. (We are a bit sceptical about the EBITDA margin, we believe that it will be around 13% because of inflation in raw materials and energy prices).

Our thoughts about The Italian Sea Group TISG.MI

We believe that the Italian Sea Group 1H22 are good enough, TISG is growing and it has to consolidate the recent acquisition of the Perini Navi assets. It is expanding its presence into important markets such as North America and the quality and reputation of its yachts are allowing it to increase its prices and consequently its margins. We are worried about the situation of the industry in Europe because of electricity prices. However, we see its recent investment in renewable electricity as something positive to reduce its dependence on external factors (despite the considerable investment that they are doing). We believe that TISG is doing things well, but we do not believe it will be able to reach its EBITDA margin. Nevertheless, TISG is our unique non-energy position in Europe.