Fincantieri SpA

MIL:FCT

Earnings Call Transcript 2021-Q1

[Operator]

Good morning. This is the Chorus Call conference operator. Welcome, and thank you for joining the Fincantieri First Quarter 2021 Results Conference Call. [Operator Instructions]

At this time, I would like to turn the conference over to Mr. Fabio Gallia, General Manager. Please go ahead, sir.

[Fabio Gallia, executive]

Thank you, and good morning to everybody. We are here to present the first quarter results. Giuseppe Dado, our CFO, is with us, along with the Investor Relations team. If you go to Page 5 of the presentation, you will find executive summary.

I believe there are a couple of important messages. The first one being is that it's a very solid start to the year. We confirm our guidance for year-end in terms of revenues and profitability. And the first quarter results are totally consistent with this statement.

When you look at the number, you can see that revenues in the first quarter, excluding the pass-through we commented at the last presentation, revenues, as I was saying, are up by 9%, plus confirming the growth trend that were outlined in previous quarter.

EBITDA margin partially improved to 7%, I would say quite solid improvement compared to first quarter of last year, which, as you may remember, has been impacted by a month by the pandemic. Net debt increased. This is due to a very tight delivery schedule, which is concentrated in the third quarter and in fourth quarter, which means that in the first half of the year, there will be very few cash-in, and there will be to sustain cost for the constructions or the ships we are about to deliver in the second half.

COVID-19-related extraordinary items are running touch less than EUR 15 million. When we talk about 2021 guidelines, we are expecting -- we're still expecting and confirming revenues in the region of 25% to 30% growth and with the EBITDA margin around 7% and importantly, a net financial position, which will stabilize in the second half of this year to go roughly in line with the level that been presented to you at the end of the 2020.

If you flip page and you go to Page 6. This is a brief business update. On course, we've been carrying on with a delivery schedule, as expected. Viking Venus, which is first out of the 5 cruise ships, which are about to be delivered in the Italian shipyard, was successfully handed over in mid-April in our shipyard in Ancona. Defense will be taking part in the sea defense project, which is aimed at providing technology, which will be included in the next generation of naval platform. We also signed a memorandum of understanding between our Naviris joint venture and Navantia for a cooperation to develop European Patrol Corvette, which is a very important PESCO European program. And regarding our VARD subsidiary, VARD is to design a cable repair vessel for Orange Marine, one of our clients and is been designing, constructing 3 service operation vessels for North Star Renewables. We will be commenting later on that it's important to highlight that VARD is progressively, I would say, successfully is shifting its focus from oil and gas whose demand is very low, as you all know, towards wind, particularly offshore wind. And this is a theme, which will be characterizing the strategy of our group, particularly of VARD in the years to come.

We'll be commenting the final outlook, a few other things regarding cruise and defense.

If you flip page to page 7, an update on 3 other important themes. The first one is digital and innovation. We're being signing a very important agreement of collaboration with Amazon Web Services, which is designed to cooperate in the digital sphere, technology development with a special focus on cloud computing. We're expecting significant improvement in the time to come.

Regarding green, we've been working with another important partner, which is Almaviva, an Italian IT and digital company, to support enhanced digitization in the transportation and logistics sector. We are active in transportation as far as sensor ship technology discussed on [indiscernible] as you may know, Almaviva is to be undisputed leader. It is still, not just in Italy. We've been also signing an important agreement with ArcelorMittal and Paul Wurth, the former owner of Italimpianti, to consider drawing reconversion plan for an existing integrated cycle in Taranto using eco-friendly technology. And we've also been working on hydrogen regarding what is probably going to be the first zero-emission shift to be completed in 2021.

And as far as sustainable mobility is concerned, we signed a letter of intent with Enel X regarding cold ironing. As you may know, it's about building and running next-generation port infrastructure, low electricity versus more [indiscernible] which means having a lower environmental impact. What I would highlight all these comments is that Fincantieri has been able to attract collaborations with the world leaders in what they do because Fincantieri is what we're leader itself. And that is very important also when we look at the future of this company, and it's really focused on what we do with the ships.

But in our ships, there's a lot of technology. Any kind of technology, any kind of new dynamics, which are impacting businesses from digital to green, to mobility are already in our businesses. And we're just extending our know-how, our knowledge, our competencies, which is represented by years and years of working on very sophisticated international projects with top-quality people.

When we go to Page 8, it's the first quarter, just to say that we signed new orders, 3 service operation vessels with the North Star, as said before. And we have been delivering to ships the logistics support ship, Vulcano, for Italian Navy and the cruise Coral Geographer first edition, which is being manufactured in our Vietnam-based shipyard.

When we look at Page 9, very importantly, you can see the visibility we have attached to our backlog. It's still a very important and very profound visibility through the years, visibly up to 2027. As far as cruise is concerned, cruise is still our main division. On naval, the visibility is even higher. And regarding wind, visibility clearly is lower, but it's important to highlight the transformation path that work has begun. So 2 units delivered, 3 new orders and touch south of 100 ships in backlog.

I will hand it over to Giuseppe for commentary regarding economic and financial results.

[Giuseppe Dado, executive]

Well, good morning, everybody. So we move to Page 11 with the order intake and backlog.

For the first quarter of this year, order intake came in at EUR 340 million, roughly, of course, slightly up compared to the first quarter of last year. Given the current situation, the order intake in the shipbuilding sector is influenced by wait-and-see attitude by our cruise clients. this also last year, the sector was in a difficult situation to say the least. But in any case, what matters here is our diversification in other businesses. Last year, I remind you, we had EUR 4.5 billion in order intake in the worst year ever for our clients, of course.

What really stands out in the first quarter is the order intake in the Offshore and Specialized Vessels in the wind segment. As we said before, the acquisition of the 3 vessels for the Dogger Bank's wind farm is a very important achievement for us and marks a further entrance into this new and promising sector of the offshore wind farms.

The order intake in Equipment, Systems and Services stands at EUR 148 million, roughly in line with last year's. Backlog, EUR 34.4 billion. It is very important to note that it's -- let me say, we preserved the backlog as of today. Of course, we didn't have any order cancellation in our backlog, and that's a very important message.

Moving on to Page 12 on revenues. Currently, the growth of revenues is on the right track. We grew quarter-over-quarter by roughly 9%. Notably, in the Shipbuilding segment, almost 13%, with a growth in cruise of 11.6% and in naval of 16.2%. Let me remind you that last year, we shut down production in the last 2 weeks of March at the beginning of the pandemic and with a loss of revenue, it was a loss of revenue that was even higher in the second quarter. Overall, last year, the revenue shortfall was EUR 1 billion. This is to say that we are right on track to bridge this gap that we experienced last year. For instance, to give you a more physical number on how production volumes are progressing. The first 3 months of 2021, we did roughly 3.8 million hours of production in our Italian yards. Only in the month of April, we did 1.5 million hours of production. So this is a clear indication of the progressive ramping up of production volumes.

Revenues in Offshore and Specialized Vessels went down more than 20%. This is mainly due to the disposal of the Brevik shipyard that was still operating in the first quarter of 2020. And of course, we still have to see the effect of the reposition strategy towards the wind offshore segment. In Equipment, Systems and Services, revenues were at EUR 232 million, up 13.4% versus last year.

On Page 13, EBITDA. As we said before, we stand at 7% right on the spot with respect to the guidance that we gave for 2021. This performance is in line with the fourth quarter of 2020 and really marks a very good start in 2021, and we are right on track with respect to the guidance. Last year, the shortfall in EBITDA due to the shutdown of production, as a reminder, was approximately EUR 16 million. With this result in the first quarter, we really bridged this gap, and we show that the profitability embedded -- we are more consistent, let me say, with the profitability embedded into our backlog. Of course, we marked also a slight uptick in the margin, in the EBITDA of the Offshore and Specialized Vessels segment at EUR 2 million, 1.6%. First quarter of last year, we were breakeven but with a minus EUR 1 million. So there is a slight improvement, and this is consistent with our strategy.

EBITDA margin in Equipment, Systems and Services was somehow lower, and this is reflect -- this is due to the different mix of our products and services within this segment. It was mainly affected by lower contribution coming from the ship repair and conversion business area.

We move on to net working capital and net financial position. Of course, we are on track also here. Our net working capital has increased, and this is expected. This was expected. It's in line with our current delivery schedule, which entails the delivery of 3 vessels, 3 large-sized cruise vessels actually in the third quarter of 2021. And we're going to have one more in the fourth quarter of 2021. And as you see, the net financial position exactly mirrors the increase in net working capital. And let me be clear here. We do expect in the second half of the year a substantial deleveraging here. We are working at full speed to complete the delivery program. As I said before, the ships are big ships, large ships, so they do require substantial amount of funds to be supported when it comes especially to the last stage of production, which is the stage in which we do rely more on external supplies. But of course, this trend will deeply reverse in the second part of the year.

On the outlook, I leave the word back to Fabio, please.

[Fabio Gallia, executive]

Right. Thanks. Page 16. You have a final page of this presentation. Maybe few words regarding cruise. Cruise is our major business lines, as it's the historical one. I would like to highlight very -- clearly say that we believe the worst is over. The sector and the companies are moving at -- adapting to the pandemic last year, restructuring their balance sheet, cutting costs, working on health and safety measures. And we believe that it's important to see '21 as a transition year and '22 and even more importantly '23 as a growth year. And this is not our prediction, it's what we hear from our clients and what you can read when looking at the statements of the different companies. Most of them are listed. And you can see that indication regarding 2022 are strong, strong in term of bookings. It's a very encouraging in term of pricing. Some of them highlighted the fact that '22 will be even better than '19. So 2020 has been a horrible year for them. '21, they will still be losing money, but the CDC is also being way -- lift regarding their restrictions, and there could be some also a positive surprise, probably not material, but in terms of booking and destination even during the summer. But everybody is expecting a full swing recovery starting next year. As we said, we're not expecting new orders in '21 and in '22. But we believe that orders will get back because this sector is getting back.

Naval. The company is now fully entered in a new phase, which characterizes companies shifting from basically one client with high navy, a very sophisticated one, to a more broader and more diversified client base abroad and particularly in U.S. And as I probably said before, we already said before in the past, being the prime contractor for U.S. Navy is what best you can imagine when you have to market new products and new services around the globe. And expanse for defense is encouraging. It's not homogeneous around the globe, but you have the eastern part, which is expected to grow more than Europe, which is expected to grow more than U.S., but the growth is nice. And it's very important to highlight that we're leader in frigate. And frigate, for a number of reasons, is probably the most important ship to have in our profit range because it's expected to grow more -- significantly more than the market overall.

Regarding tech, we've been discussing the Amazon collaboration agreement which we believe is transformational for us and can materialize also a new player in an area, which is strategic, even considering what is being highlighted in the recovery plan, our Italian one, the effort which is being asked to everybody to become more digital or modern, simpler. And as you may know that everything which has to do with artificial intelligence, data, connections, and for connections, I mean Internet of Things, will go through cloud. And we've been partnering with the undisputed world leader.

And also the other businesses, on infrastructure to accommodation, to the other naval business we have -- are characterized by leadership positions and technology leadership. And so we will continue to be focused, disciplined, working more and more to introduce in our yards, in all our manufacturing facilities, more and more technology. That is going to impact manufacturing as well.

To wrap it up, as we already said a couple of times before, we confirm the target for 2021. And we can say that the start of the year is encouraging in a still certain world, but we have visibility, and we have a leadership position that we want to leverage in order to have a sustainable, solid and profitable growth.

I will stop here and leave the floor to the question.

[Operator]

[Operator Instructions] The first question is from Alessandro Pozzi with Mediobanca.

[Alessandro Pozzi, analyst]

I have a few. Let's start with the first one on naval. You mentioned the division is entering a new phase with a broader number of clients. And when I look at the revenues, I think naval is now just a little bit below 30% of the Shipbuilding. I think in the past it has been higher as well. But I was wondering how you see that's going to change the mix of cruise versus naval?

And also, if you can give us a little bit more color on the progress of the FFG program in the U.S.? I think it's now in the design phase, but can you tell us when you believe is going to turn into a contract?

And also, I was interested in knowing about the option of when the U.S. government will potentially exercise the option for the additional 9 ships.

[Fabio Gallia, executive]

Right. Thanks for the question, Alessandro. I was just saying that, as you may know, Fincantieri has been historically working with a major client, which is our Italian Navy. And over the years, that strategic effort by the company is to diversify its client base. I would like to highlight diversification for a moment, also referring to our cruise division. Not only we have largest market share among international operators, but [indiscernible] the most diversified one. That is very, very important because it's not depending on 1 or 2 major operators. We've been through that phase before. And it's also more difficult to extract value from your company. So being diversified, it's a value that we've been constructing, thanks to the great work done by the company and the colleagues. And clearly, we are entering -- we've been entering different phases because you know Egypt to Qatar, we're being able to get new orders, significant ones and beyond the Italian territory. So clearly, being enabled a very attractive business in the long run, we continue to invest, and we want to be able to export our products in a very promising market.

With that respect, having been awarded the U.S. Navy contract last year represents a very, very important business card because it creates a more sophisticated and most important buyer in the world. And we are now -- and so I come to your question, now working on the FFG program, and we are progressing line, and we are clearly also investing.

When you look at our net financial position, you have to know that we're coming from a couple of very, very intensive year in terms of investments. We've been, I would say, strengthening the competitive position and productivity of our shipyards in Monfalcone and Marghera, which are among the 2 largest in the world. And we've been investing a lot. We are still through this investment cycle this year. Our investment numbers will be clearly impacted by what we're going to do in U.S. So the program is clearly in line with the original plan. And clearly, we have options, as you know, and we hope that there will be good news in the months to come.

[Alessandro Pozzi, analyst]

Okay. In terms of when you're planning to enter the construction phase for the FFG program?

[Fabio Gallia, executive]

Pardon -- sorry, I didn't hear.

[Alessandro Pozzi, analyst]

I believe the first shape for the FFG program, it will be delivered in 2026, but probably you are going to book revenues well ahead of that. I was wondering when are we going to see that into the top line?

[Fabio Gallia, executive]

I mean to, if you want, but we clearly keep on -- we stick to our early accounting principle, and I think it was not going to change versus what ordinarily to...

[Giuseppe Dado, executive]

Well, yes, Alessandro, well said. 2026 is the delivery year. Of course, it's a long time from now, but we are already in the engineering phase of the first vessel. We do expect the -- this year, we expect the exercise of the option for 1 vessel and out of the 9 remaining, and we expect the program to progress as expected. Of course, contribution in terms of revenues in the year 2021 and 2022, considering also that we have 1 ship in the backlog right now will not be substantial. What mainly still contributes to revenues as far as our U.S. operation goes are, of course, the LCS program, [indiscernible] program, the MMSC program for the Saudi Arabia Navy at this point in time, right?

[Alessandro Pozzi, analyst]

Okay. My second question is on the longer-term view and the business plan. I think that the last time that we've seen the management view for the long-term target was maybe about 3 years ago. And you have a lot of things going on. You have the naval, clearly, intermediate phase, but also why they are changing the business, basically moving towards wind, but also you have a lot of investment in digital. Do you think we're going to see a new business plan sometime this year?

[Fabio Gallia, executive]

Giuseppe?

[Giuseppe Dado, executive]

Okay. But you are right, Alessandro. I mean the company is being transformed. I would like that ships is still our stronghold. It will continue to be our core business, continue to be the leader in cruise because there is a promising market and naval. It is growing. It's diversifying revenue base by different looking capital cycles. Now it's important to people growing and having a more balanced exposure between these two divisions. On the other companies we have in our group, we believe that there will be expectations for the digital, electronic, cyber and security businesses, which I would like to say they are very, very close to what we do because on a ship on the kind of ships we've built, there's a lot to come. We're not just building ships for containers, tankers, roll on/roll off or other. I mean, we bring people. We bring CMS, content management system. So the technology, which go through, I would say, every square meter of what we build, it's impressive. And we realized over the last few years that this technology can have also the market outside of our products. So the technology, the know-how that this company has been building, thanks to its very robust competitive position compared to everybody else, looks to invest and grow these different divisions, but with a clear focus on doing what we know, doing what we know how to do it. So there's no, I would say, competence risk. And while -- once we go a little bit outside of our usual track, we do it with the best partner in the world.

[Operator]

Next question is from Monica Bosio with Intesa Sanpaolo.

[Monica Bosio, analyst]

I have 3 questions. The first one is on a general -- is a general question. Most of the industrial sector are experiencing shortage in supply chain and strong cost inflation. Maybe it would be helpful, some comments from you about how the company is dealing with raw material pressure, potential supply chain shortage or if you have done some provisions in relation to this issue?

And the second question is on the naval business. the consolidation of the European defense business. According to the press, the press rumors reported potential interest of Fincantieri and Thyssenkrupp with the participation of [indiscernible]. Maybe it's not a case to ask, but I'll try. If you can comment on this.

And the very last question is on INSO. When should we see some initial contribution from on Fincantieri figures?

[Fabio Gallia, executive]

Thank you very much. Thank you, Monica, for your questions. The first one, raw material is a very appropriate one. You all know that we are in a phase, in which raw material, commodity prices being spiking. And as far as steel is concerned, you may know that there has been quite an imbalance around the world. Chinese steelmakers are no longer exporting. Actually, they're using to finance their explosive growth. U.S. is growing, and you've seen Joe Biden laid plans for infrastructure. And by the way, a big portion of recovery planning will also be put into infrastructure, which will require steel. Yes, this is an area of concern for us. As for everybody else, it's important to know that we've been buying long-term contract. I think usually do. But -- and that clearly, we have to see and understand where steel prices stabilize. But what is important is that we will continue to work on efficiency, by definition, and we do it in a different way. As I said before, investing in yards will make us more competitive and will allow us to really to improve the cost of the constructions. We do -- because more and more can be done onshore rather than offshore. And these are very technical things, but we're happy one day to bring you to the shipyards and to see what is going to happen there.

Plus more and more technology from robotics to other innovations that we will have -- we are implanting, implementing, and we will keep on implementing in the next quarters, in the next few years. But, steel price is something we cannot control. We're not concerned for this year, but clearly, we have to see where it stabilizes. But the only answer is we can have, since it's not hedgeable, can be hedged, can we just protect yourself with long-term contract is to wait for stabilization. And hopefully, for lower price. In the meantime, we have to be more and more efficient in the way we do things.

On naval consolidation, you've been hearing about consolidation in European defense for quite a long time now, and we'll see. So no comments on that.

INSO. INSO is very interesting. It's extension of competence know-how. As you may know, we're being building our infrastructure business out of knowledge because, as you know, any ship is made of different bridges. So we know what bridge is about. We've been having a very, I would say, wide eco after our accomplishments at the bridge and -- but to be very, very also conservative. We've also been buying cordially from bankruptcy procedures. And we'll be also buying other lateral set of skills from very similar bankruptcy procedures or extraordinary commissioners. And that is also true for INSO which is about and it's about technology. We can pull in hospital, and it's also about concession, we do have. We believe that it will take a while. The order book is significant. But I find the most important things, the skills, the know-how we have there. And so it's very important that we don't want to be generalist player in infrastructural work. We want to stick to what we now have to do. And there are obvious opportunities around the world, very close to our main area of skills, working steel. We are working our ships that are made of steel. We know how to craft it, we know how to shape it, we now have to construct it. And if we have to turn that set of skills in something which is not on the ocean and that is more on solid, we can do that. We can do that. And the client base, we'll comment maybe in one of the next few quarters, it's quite impressive, not just at Italian level.

And regarding hospital, we also believe that there will be a lot of investments in this area, not just for recovery plan, but more and more after what happened. And therefore, the set of skills, knowledge, we've been taking on board that will guide. So acquisition would definitely make a mark in our accounts progressively.

[Monica Bosio, analyst]

Yes, I agree. So should we start to see some contribution, not in 2021, but maybe starting 2022 and then probably increasing. Is it correct?

[Fabio Gallia, executive]

Yes, we are expecting progressive growth numbers. But I mean, we're a large company, as you may know. So also it's important that these infrastructural division is currently solidly prudently moving ahead.

[Operator]

[Operator Instructions] Next question is from Matteo Bonizzoni with Kepler.

[Matteo Bonizzoni, analyst]

I have 3 questions. The first one is with regards to growth of VARD in the renewable area, including vessel and support vessels for offshore wind operation. So as a matter of fact, VARD is now around breakeven on the EBITDA, slightly above breakeven. My question is to understand, on one side, what is the size of the commercial opportunities, which you see here and then also what are your expectations as regards margin evolution for the VARD offshore division?

The second question is with regards to the potential outlook for also 2022, '23 in this sense. So you have a big backlog, but for a couple of years, probably you are going to have a book-to-bill quite low or below 1 due to the fact that cruise order will resume in 2023. So my question is, as regards your top line, should we expect another leg up in 2022 due to the execution of, let's say, the existing backlog or maybe 2022 and 2023 could be roughly stable? Yes, so what is the outlook on your top line?

And then as regards the guidance, which you have confirmed for an improvement of the net financial position notably in the second half of the year. So you have seen that at the end of the year, your net debt should return in line with 2020. My question is, is it also true for the amount of the construction loans? And also, your last deliveries, I think, in July or in any case in Q3, can you quantify a little bit of the cash-in, which you are going to have in the first quarter?

[Fabio Gallia, executive]

Thanks, Matteo. Giuseppe, do you want to take those questions?

[Giuseppe Dado, executive]

Yes. On your first -- On your first question on VARD. VARD is, let me say, right on track with respect to what we started, let me say, on the back of 2019 results. The deep restructuring process ended with shutdown of 2 yards in Norway. And of course, given the development of the markets, VARD has once again had to reposition in its business. But what really -- I mean what we really see here is the flexibility and the ability of VARD to cater different needs and to adapt, let me say, its business to new demand. Years ago, it was carbon fuels or gas and oil. Right now, that segment has literally collapsed. And I kept saying for years that it was really foolish to forecast a return to previous levels on this sector. And what we see now, the new story here is offshore wind. Offshore wind capacity is expected to grow 4x the current capacity in the next 10 years. The order that we acquired in the first quarter is for 3 service operation vessels for the Bank's wind farm, which is expected to become the large -- become operational in 2 years from now, I guess, and it's, at the moment, the largest wind farm in Europe. We see a further order intake in this segment. These wind farms need support vessels to be operated and maintained. This order is very welcome.

And when it comes to the flow into revenues and profitability, of course, those 3 ships are for delivery 2023. So we're going to see contribution kicking in end of this year and the following year mainly. We have -- as I said before, we had an uptick VARD's EBITDA. We expect further growth. Of course, this requires very good execution. We believe that VARD has improved a lot in execution and, in many instances, it has been brought up to Fincantieri standards. And we still keep a very, very close eye on the footprint of VARD in terms of each of its capacity. And of course, we -- the big password here is wind offshore, but we can't forget that VARD is [Technical Difficulty] has played a very important part in the growth of the top line also for Fincantieri S.p.A. for the cruise business out of Italy because of the contribution that the remaining yards are giving to the construction work of entire sections of the cruise vessels that are then sold to Italy and assembled together. And in that matter, we can say that Romania operational-wise is getting closer and closer to the standards. [Technical Difficulty]. Of course, we maintain a cautious [Technical Difficulty]. But we can say that we are so far right on track.

On the outlook...

[Fabio Gallia, executive]

Just one comment, additional comment regarding because you was asking the size. We don't comment about our target. But in terms of what we spend now, as far as offshore wind is concerned, globally, we have roughly now sold 20 gigawatts and any kind of analysis from -- you choose which kind of consultancy companies is going to grow at least to 80, 90 before 2025 and well north of 200 gigawatts in 2030 from -- that means from to 30 to 230, that tells you about the growth, which is being expected in a very consistent way by any observators' commentary, watching. U.S. is lagging behind. Europe has been more fast than U.S. really and Asia is And we are a global market leader, one of the global market leaders. I thought it would be not appropriate just focus on what is going to happen in Italy. We have no offshore wind installed as of yet. But we believe there will be some project -- we are familiar with some of these projects. But when we watch at our competitive landscape, we're clearly watching other works.

[Giuseppe Dado, executive]

On your second question, Matteo, yes, order intake for cruise, we don't have a sizable expectations there. Let me say [Technical Difficulty] 2019 was a record year for cruise order intake. It reminds you that we acquired 11 ships in the first 6 months of [Technical Difficulty]. So we expect, in any case, in fact, in 2019 [Technical Difficulty] slowdown in order intake. When you look at the book-to-bill expectations, I will not consider only the cruise business, which I guarantee has a very consistent order inflow in the past few years. [Technical Difficulty] is stronger and stronger year after year. And the acquisition of the [Technical Difficulty] program in the U.S. is a huge, very important, very visible business card, as we said before. So as with order intake, we maintain, of course, we're confident that new commercial leads will bring new orders in the next years. This is to say also that for 2022 and 2023, we'll still expect -- without pretending to make a guidance on this, but we do still expect a growth in revenues. Of course, 2021, we are guiding for 25%, 30% revenue growth, but this is also considering that the base is lower. Last year, we lost EUR 1 billion in revenues. We expect this to be gained again, thanks to the cruise programs and to the naval business, to the construction that we are performing right now. But on top of this, we do expect some growth, okay?

If you look back at our previous business plan, the 2018, 2022, business plan, if you look at 2022, it's -- I can say that we are consistent with that. And we said also the same -- we get the same message without giving you, let me say, quantitative measures already last year on the occasion of the first half year results. If we come out of the pandemic with our order backlog intact, we expect to resume to go back in our growth path that was outlined and that is embedded in our backlog. This is the message we gave you in July last year, and we are in a position to reiterate the message as of now. And of course, for 2021, 7% EBITDA, 25%, 30% revenue growth. And the first quarter demonstrates that we are on the right track.

On your third question, 2021 NFP. Yes, we keep this guidance. We expect NFP to slightly grow in the second quarter of this year. We have 3 deliveries in the third quarter, and we have one more in the fourth quarter. The cash for all these deliveries will be in excess of EUR 1.5 billion for the third quarter, and we're going to add another, let me -- for the whole year, we are in the range of EUR 2 billion of cash-in for -- thanks to the deliveries. And no, we do not expect to, of course, to deleverage on the net financial position by increasing restructuring loans. Overall, the debt levels for the end of 2021 will be broadly in line with debt levels at the end of 2020. And again, we always enter into this type of conversations. We expect the first delivery of 2022 is for January 30, 2022, so just a month after the closing of the books. When we will present end of year results, the net financial position as of the end of the year will be already, let me say, an old number. And this will happen also in July as well.

[Operator]

Our next question is from Gabriele Gambarova with Banca.

[Gabriele Gambarova, analyst]

The first question is about VARD, I mean, the cruise component, because in your remarks, in your press release, you say that the top line went down because the number of deliveries are expected to be lower vis-à-vis 2020. So I was wondering if the former VARD, let's say, cruise yards pose an issue in terms of backlog.

The second one -- the second question regards naval. I understand you have this strong positioning in the frigates segment. I was wondering if you believe that even the submarine segment is, let's say, a segment in which you have, let's say, the technology, the expertise. I mean do you see an interesting -- potential interesting market there and a market where you can play a significant role? This was my second question.

And the third one regards, again, offshore wind and the perspective in the U.S. We saw that the Biden administration gave the green light to the first big offshore wind farm, Vineyard wind. And I was wondering if you believe there is a room for you to play a role in that area, considering that there is the Jones Act and that they have to build their own ships for offshore wind. So I was wondering if you see any kind of opportunity there?

[Giuseppe Dado, executive]

Thanks for the question. I will start in reverse order. Regarding U.S. wind, I mean you've been looking at what has been outlined by the President, U.S. President administration, and we believe that offshore wind will be one of the pillars of growth for the strategy. We are clearly making some -- thinking about that having yards there. You know that there is also the Jones Act there and being a producer in U.S. is something which is a plus, clearly not a minus. But we also have focus on our naval programs. Therefore, we believe there's opportunity to be captured. And we are just making some reasoning about how to capture these opportunities.

Regarding submarine, we don't produce nuclear ones or the traditional new generations. There is also innovation going through this segment of the naval business. Really, we are interested we're being awarded 2 orders last year. And as you may know, that really, it's part of our business. We want to capture the opportunities. We're just saying that naval business, I would say, more competitive position is on predates, which incidentally are also expected to be probably the most sought after product, the more required product.

And when talking about naval, there are also other services and businesses attached to this kind of operations for logistics support to other services we can provide for naval for us is important at 360 degrees, and it's not just submarine.

Regarding VARD, and maybe just comment about that. We just closed yard. We're going through rationalization of our manufacturing footprint. And VARD has slightly mutative EBITDA level in the first quarter. We're expecting that worse is over, it's behind our shoulders now, and we are clearly concentrated in becoming more efficient, more innovative, be ready for the moment in which oil and gas demand will resume, which is not probably going to happen this year, but sometimes it will go back because we will still need oil and gas for the next 10 years, at least. Therefore, that is not that forever, according to our opinion. But clearly, what is something which we read about every day, there are lots of project in renewables. And while our area of expertise and our nature of extension of knowledge is in the ocean. And so we will stick with that.

[Fabio Gallia, executive]

I may add something here. And on VARD, what I said when I discussed the EBITDA for the [Technical Difficulty]

[Giuseppe Dado, executive]

Fabio, can you put unmute, please?

[Fabio Gallia, executive]

As I said before, performance -- economic performance is very good also in the cruise part of the VARD business. The backlog of VARD has been untouched by the COVID-19 emergency. VARD has built a reputation in the niche segment of the exploration -- luxury exploration cruise vessels. We have 4 ships under construction we delivered in 2021, '22 and '23. Of course, order acquisition has been affected by the prices. But at the moment, it's good. Backlog preservation is the key theme, and we are so far right on track with this. Consider that the luxury niche exploration cruise vessel segment has been a segment in which we experienced a very important growth in the years before the crisis. And it's a segment in which Fincantieri group with its production footprint has been -- has played a leading role in terms of market share. So the premises are all there if and when other acquisition will start again, okay?

[Operator]

[Operator Instructions] The next question is a follow-up from Monica Bosio in Sanpaolo.

[Monica Bosio, analyst]

So just a follow-up on the Equipment, Systems and Services. The first quarter was impacted by no work introduction from ship repair. Can you give us a rough indication for the full year?

[Fabio Gallia, executive]

No, Monica.

[Monica Bosio, analyst]

So should we expect to recover because the EBITDA was a bit lower than what's expected.

[Fabio Gallia, executive]

Yes. It was definitely a bit lower. As you know, we'd rather guide for the overall EBITDA margin. Of course, the Equipment, Systems and Services is a bundle of several things, with the core of the segment still, we say, very much focused on the marine business. So the -- let me say, the OEM business and the construction of cabins and accommodation for cruise vessels, and that segment is performing very well and on track. Where we really are suffering, and of course, this is, let me say, driven by the pandemic crisis because with this pandemic, of course, the cruise operators have canceled CapEx, renovation CapEx on the current fleet. Some of them have heavily reduced the number of ships in their fleet. Look at what Carnival did. Almost 20% of the fleet was scrapped or sold. So this is where -- and of course, the lead time in this business is very short. So what we are really -- where we're really suffering is there. So very low contribution coming from there, very low margins coming in from there. In general, it's early to say how the segment will perform throughout the year. In any case, expectations, the overall expectations of the -- -- for the group is intact, is consistent. Current margin levels and what we see coming for the remaining part of the year are consistent with a 7% EBITDA margin, including a possible improvement in the margin of the Equipment, Systems and Services segment. Let me put it this way.

[Operator]

[Operator Instructions] Mr. Gallia, Mr. Dado, there are no more questions registered at this time.

[Fabio Gallia, executive]

So thank you, thank you all for attending the presentation, and have a great day. Bye-bye.

[Giuseppe Dado, executive]

Thank you. Bye.

[Operator]

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