Research & Innovation

and Framework Programmes

at Fincantieri

Paolo GugliaR&I Manager

Bruxelles, February 22nd, 2019

Table of Contents

Section 1 Fincantieri at a glance

Section 3 How we manage Research & Innovation in Fincantieri

Section 4 The innovation complexity

Section 2 Fincantieri vision for 2030s

Section 1

Fincantieri at a glance

Italy43%

RoW57%

Employees by location

Fincantieri at a glance

€ 5,020 mln revenues 20 shipyards

4 continents

~ 19,500 employees

~ 80,000 subcontractors

~ € 32.5 bln total backlog(2)

• € 26 bln backlog

• € 6.5 bln soft backlog

#1 Western designer & shipbuilder(1)

with 230 years of history & >7,000 ships built

Operating subsidiary

Representative / Sales office

Corporate/BU headquarters

Joint VentureShipyard

Vietnam

• 1 shipyard

USA

• 3 shipyards

Brazil

• 1 shipyard

Norway

• 5 shipyards

Italy

• 8 shipyards

Romania

• 2 shipyards

UAE

• 1 Joint VentureRevenues by geography

Italy15%

RoW85%

4

China

• 1 Joint Venture

€ 5.0 bln ~19,500

Note: all figures reported at December 31, 2017, except for backlog which is reported as of September 30, 2018(1) By revenues, excluding naval contractors in the captive military segment. Based on Fincantieri estimates of shipbuilders’ revenues in 2016(2) At September 30, 2018; sum of backlog and soft backlog; soft backlog represents the value of existing contract options and letters of intent as well as

contracts in advanced negotiation, none of which yet reflected in the order backlog

• World most

diversified player

active in all high

value added

segments

• Balanced

exposure to

Cruise, Naval and

Offshore

• Significant share

of revenues

coming from

foreign countries

€5.0 bln

By client’s country

€5.0 bln

By end market(1)

Cruise

Ferries

Mega-Yachts

Naval

Offshore

After sales

Business diversification

Equipment & Systems

Repair & Conversion

Source: Company information(1) Breakdown calculated based on revenues gross of consolidation effects

2017 revenues breakdown

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Fincantieri market positioning

5

Italy15%

RoW85% Cruise

49%

Naval23%

Equipment, Systems and

Services10%

Offshore18%

✓

Section 2

Fincantieri vision for 2030s

Who’s involved in the innovation process?

7

Fincantieri can use innovation to increase the value

that is able to create and capture while building the ship

innovation

Suppliers (70%–80%)Fincantieri

(20%–30%)

A network of selected partners both in academia and among our

suppliers and clients, in order to leverage the open innovation paradigm

8

SUPPLIERS

UNIVERSITIES

CLASS SOC.

CLIENTS

IND. FORUMS

UNCHARTERED

● Shipbuilding is extremely various in terms of possible use cases

● We are operating across all the market segments in the industry

● Our products carry an unique degree of complexity in terms of systems, functionalities, and parts

● A cooperating ecosystem is the most effective innovation model for our industry

● Their all-embracing point of view allows integrators to facilitate the creation and the nourishment of the networksthat form this ecosystem

● Start ups● Incubators● SME● Big industries

willing to enter new martkets

Fincantieri assessment – collaborative processes

9

VALUES RDI PRIORITIES

INTERNAL PROCESS EXTERNAL PROCESS

Sustainability PlanRDI Chapter

OTT 2017 DIC 2018

Innovation is one of our core values

10

FINCANTIERI GROUP CORE VALUES

INNOVATION

PEOPLE

SAFETY

INTEGRITY

CUSTOMER FOCUS

Everything we do focuses on enabling the growth, enhancement and training of people, based on the daily attention that we pay to the quality of our work and our relations with others

We ensure high levels of occupational safety and health

We take responsibility for our actions and we put great care into our work, adhering to strict principles of ethics, loyalty and professional fairness

We meet customer requirements and we rigorously honor our commitments

We aim at continuously improving our products and working methods through technological innovation

We support the 5 main visions for competing in 2030

11

– Development of efficient and sustainable solutions for low-impact ships (energy efficiency, waste and pollutant reduction, green energy production)

Green ship

– Introduction of IoT solutions for enhancing servicesavailable to the operators and their guest, increasing the payload added value, and enhance safety and security

Smart Ship

– Development of offshore multipurpose infrastructure able to support different activities, such as aquaculture, production of energy and raw materials extraction

Smart offshore

infrastructure

– Adoption of solutions capable of increase the productivityand enhance the safety of the activities.

– Development of a new design paradigm that will take into account the entire lifecycle of a ship

Smart Yards

– Development of autonomous vessels that are capable to remotely co-operate with an external control center, whilst autonomously taking decisions

Autonomous

vessel

Autonomous Vessel

▪ Develop on-board systems to support the average level of autonomy (e.g. L4 as defined by LR)

▪ Demonstrate the use of an autonomous vessel to perform completely unmanned operations

▪ Avoiding cyber security vulnerabilities.

We share demanding goals

12

Green ship

▪ Increase ship efficiency by 30%

▪ Eliminate ship emissions in ports and halve navigationemissions

▪ Promoting the introduction of re-used or recycled materials

▪ Decreasing onboard and underwater noises

Smart Offshore Infras.

▪ Doubling offshore power production per square mile, generated using marine technologies

▪ Promoting the installation of offshore energy storage devices

Smart Yards

▪ 50% productivity improvement by using industry 4.0technologies, to be implemented avoiding cyber security vulnerabilities.

▪ Monitoring 100% of added value production activities

▪ Zero safety accidents during construction & maintenance.

▪ Equipped workers with basic health monitoring devices and increase the number of life saving devices

Smart Ship

▪ Increasing the number of systems monitored by sensors, and their integration

▪ Create a reference framework for cyber secure interconnection between systems

▪ Enable data exchange/record in real time in open formats

Section 3

How we manage Research &

Innovation in Fincantieri

14

Several forces are re-shaping our market at an unprecedented pace

GLOBAL ECONOMY

TRENDS

SHIP MARKET

TRENDS

NEW

TECHNOLOGIES

EVOLVING

REGULATIONS

Value creation through innovation requires a structured approach…

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● Research and innovation strategy definition

● Management of innovation needs

● IP management and protection

● Results transfer and dissemination

● Continuous improvement and quality assurance

OP

ER

AT

ION

SS

TR

AT

EG

Y

Value creation through innovation requires structured processes…

16

Research & Innovation Plan

Technology scouting

Partnership with suppliers

Innovation drivers and needs Strategic research agenda

Horizon 2020 projects

Working groups in national and international technological clusters and associations

Technology transfer

IP protection

OUR CORE PROCESSES ARE DESIGNED TO DRIVE INNOVATION FORWARD

Section 4

The innovation complexity

How technological is shipbuilding?

18

Fuel cell onboard

Power balance

optimization

Vibration reduction

Decision support system

software

Structural glasses

Smart cabins

UV for rescue

missions

Waste processing

onboard

Metal foams

Simulation software

How complex is shipbuilding?

19

How fast is evolving shipbuilding?

20

In the last 30 years, each and every year ships became 4,3% bigger!

CROWN PRINCESS

(1990)

Symphony of the Seas

(2018)

Fincantieri Shipbuilder Chantiers de l’Atlantique

69,845 Tonnage [GT] 228,081

1,590 Capacity [pax] 6,680

245 Lenght [m] 362

32 Beam [m] 47

11 Decks 18

x3,2

x4,2

▪ Development of innovative technological solutions, materials and systems carried out during ship design and necessary to meet the specific needs of a ship contract

Research & Innovation in Fincantieri is organized along three pillars

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PRODUCT

SPECIFIC

▪ Development of design solutions, systemsand components not applicable to a specific contract, but required to anticipate customer’s needs

▪ Activities aimed at increasing the technological vision of the Group with respect to new technologies relevant to the current product portfolio or those required to enter new markets

OFF-THE-SHELF

LONG-TERM

SMART

YARDS

OVERALL

STRATEGY

SMART

SHIP

GREEN

SHIP

Fincantieri contributed to several EU funded projects

22

SAFEDOR

2010 2015 2020

HIGH LEVEL VIEW OF FINCANTIERI CONTRIBUTION TO PAST AND CURRENT PROJECTS

InterSHIP

MOSAIC RAMSSES

FLARE

OCEAN2020

MESA

ECHO

StarnetREGIO

GOALDS

DESIGN & RULES

SILEN-V SONIC

JOULES

LEANSHIP

HOLISHIP

MC-WAP ENERGY

UWN

GRIP

MATERIALS

BESST

CO-PATCH

M4EU

• R&D is complex: needs fit for purpose initiatives• Diversity of funding instruments helps• Complementarity among instruments

• Open innovation is the paradigm to foster innovation in maritime• Cooperation goes beyond R&D projects (WATERBORNE)• It has to be industry / product / business oriented

• Support incremental development (high TRL)• Support the introduction of disruptive technologies (low TRL)• Facilitate the integration of different technologies

• Silos approach is outdated: everything is interconnected• The centrality of maritime has to be recognised• KET technologies need to be maritime oriented

The DNA of EU funded waterborne R&D in Europe

Central

Tailored

Cooperative

Diversified

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