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Fincantieri: Building Europe's Maritime Empire
I. Introduction: The Shipyard That Time Refused to Sink
In the vast industrial harbor of Trieste, where the Adriatic Sea meets the Italian coastline, sits the headquarters of one of the most improbable corporate success stories in modern European industrial history. This is where Fincantieri—a company whose roots stretch back 230 years to a modest Neapolitan shipyard commissioned by a Bourbon king—orchestrates an empire spanning 18 shipyards across four continents.
Fincantieri S.p.A. is an Italian multinational shipbuilding company headquartered in Trieste, established in 1959 as a state financial holding entity to manage major Italian shipyards and restructured as an operational company in 1984. With roots tracing back through predecessor yards over 230 years, it has constructed more than 7,000 vessels, positioning it as one of the world's largest shipbuilders by output and diversification across cruise ships, naval vessels, offshore platforms.
The numbers alone demand attention. With over 100 vessels built since 1990, Fincantieri is the increasingly important market leader in all segments, as the figures confirm: one third of the world's cruise ship fleet capability came out of their shipyards, and they carry 8 million passengers a year around the world, or one in every three cruisegoers. That's not a market position—that's market dominance.
But the real story isn't the scale; it's the transformation. Here's a company that began as a government bailout mechanism for a fragmented, struggling industry, survived the collapse of European commercial shipbuilding as Asian competitors crushed Western yards, pivoted into luxury cruise ships when containerships became unprofitable, and now stands at the forefront of Europe's defense awakening. Since CEO Pierroberto Folgiero became CEO in May 2022, the company's market value has increased more than fivefold to about €5.2 billion.
The central question we'll answer today: How did an Italian state-owned holding company, created to rescue a fragmented shipbuilding industry, become the world's most diversified shipbuilder—surviving the collapse of European shipbuilding, pivoting to luxury cruises, and now reinventing itself as a defense powerhouse?
The themes that emerge: State capitalism done right. Vertical integration mastery. The art of the cruise ship. And Europe's defense awakening.
II. Origins: Italian Shipbuilding Heritage (1780-1959)
To understand Fincantieri, you must first understand the Mediterranean. For millennia, whoever controlled Mediterranean shipping controlled European commerce. The Italian peninsula, jutting into the center of this strategic waterway, has been building ships since the Venetian Arsenal revolutionized naval construction in the 12th century.
Castellammare di Stabia is believed to be the oldest Italian shipyard, being set-up in 1780 by Giovanni Edoardo Acton on behalf of King Ferdinando IV. Picture Naples in the late 18th century—the Bourbon court required a naval capability to protect its Mediterranean interests, and Acton, a naval reformer of English origin, established a state-of-the-art facility that would anchor Italian shipbuilding for centuries.
The 19th century brought iron and steel construction to Italian shipyards. The shipyards comprising Fincantieri's origins, dating back over 230 years to the late 18th century, laid foundational advancements in hull design, propulsion, and structural integrity for both commercial and naval vessels. Early innovations included the shift to iron and steel construction in the 19th century at facilities like those in Genoa and Trieste, enabling larger, more resilient ships capable of withstanding oceanic stresses through improved riveting and plating techniques.
But it was the interwar period that would define Italy's shipbuilding ambition. A notable pre-World War II achievement included the construction of the transatlantic liner Rex in 1931 at the Ansaldo shipyard in Genoa, which captured the Blue Riband in 1933 for the fastest westbound transatlantic crossing at an average speed of 28.92 knots.
The Rex represented more than maritime engineering—it was national pride incarnate. Its leadership was underpinned by its having built the best-known and most iconic Italian transatlantic liner: the Rex. Built at the Genoa shipyard, the Rex is remembered for winning the Blue Riband in 1933, having beaten the record for crossing the Atlantic. When Italy's massive liner sliced through Atlantic swells faster than any ship before it, the message was clear: Italian craftsmanship could compete with—and beat—the British, German, and American maritime giants.
Then came the war. World War II left IRI devastated, for its large industrial facilities had been the target of Allied bombers seeking to stem the flow of arms coming out of Italian factories. Italian shipyards were reduced to rubble, skilled workers scattered, and the nation's maritime infrastructure lay in ruins.
Post-World War II, Italy's shipyards faced severe disruptions from wartime destruction and economic reconstruction challenges, prompting state intervention through the Istituto per la Ricostruzione Industriale (IRI), established in 1933 to manage distressed industries. IRI assumed control of key shipbuilding assets, including yards in Trieste, Monfalcone, and Castellammare, to consolidate fragmented operations and support national recovery.
The stage was set for a uniquely Italian solution to an industrial crisis—one that would birth Fincantieri.
III. The Creation of Fincantieri & the IRI Era (1959-1984)
December 29, 1959. In the bureaucratic corridors of Rome, paperwork was signed that would reshape Italian industry. The founding date was December 29, 1959. This marked a pivotal moment in Fincantieri history, a strategic consolidation orchestrated by the Italian state holding company, Istituto per la Ricostruzione Industriale (IRI).
To understand this moment, you must understand IRI. Established in 1933 as a prop for failing Italian banks, the state-owned holding company grew over the years to encompass over 1,000 businesses, employ over 500,000 people, and produce everything from highways to telephone equipment to ice cream. IRI is credited with spurring the phenomenal growth of the Italian economy that occurred in the late 1950s and early 1960s.
This wasn't socialism—it was something more pragmatic. During the years of its intense growth, IRI behaved unlike any corporation seen before. Because it served the interests of the state, it did not have to concern itself with profits. Thus IRI could sink millions of lire into enterprises, like steel and roadbuilding, that profit-driven companies shied away from.
In 1959, IRI rationalized the diverse Italian shipbuilding industry into a separate holding company, FINCANTIERI, thus assuming the burden of a struggling but important industry.
The name itself—Società Finanziaria Cantieri Navali—tells you what it was: a financial holding company for naval shipyards. It wasn't meant to build ships directly; it was meant to coordinate and rationalize a fragmented industry.
The primary goal was to revitalize and modernize Italy's shipbuilding sector, which was fragmented among numerous, often competing, shipyards. The economic environment of post-World War II reconstruction and the rising demand for new merchant fleets and modern naval vessels provided the impetus for this national effort.
The consolidation brought together legendary names. Key Shipyards Integrated: Ansaldo, Cantieri Riuniti dell'Adriatico (CRDA), and Navalmeccanica. Each carried decades of tradition, proud workforces, and distinct cultures. Merging them was akin to merging three separate football clubs—possible on paper, agonizing in practice.
During the 1960s FINCANTIERI, a holding of the IRI Group, undertook a complete review and overhaul of Italian shipbuilding, with the objective of producing a new efficient and competitive organization. The final result of FINCANTIERI's review was the creation on 22 October 1966 of ITALCANTIERI, through the merging of three old Italian Shipyards, at Monfalcone, Genova Sestri, and Castellammare di Stabia.
The challenges were immense. The number of staff at each of the three shipyards, related to the respective peak production workload, was too high for the new organization. And the design and workshop documentation standards, organizational approach to the job, departments dealing with external entities (such as classification societies, ship-owners, and suppliers) were so different that mutual co-operation was virtually impossible.
During the 1960s and 1970s, Fincantieri focused on integrating its shipyards, including those in Monfalcone, Sestri Ponente, Ancona, and Castellammare di Stabia. This involved modernizing facilities and optimizing production processes.
Throughout this period, Fincantieri built what its government customers needed: tankers, bulk carriers, frigates, submarines. The Italian Navy became a core customer, with vessels like the aircraft carrier Giuseppe Garibaldi, delivered in 1983, showcasing the company's growing technical capabilities.
But a storm was brewing. Japanese and Korean shipyards, with lower labor costs and aggressive government support, were eating European shipbuilding alive. One by one, British, German, and Scandinavian yards closed or shrank. Italy's position was precarious—protected by naval orders but increasingly uncompetitive in commercial markets.
Something had to change.
IV. The 1984 Transformation & Cruise Pivot
Founded in 1959 as Società Finanziaria Cantieri Navali – Fincantieri S.p.A. as a State financial holding company, part of IRI, the company became a separate entity in 1984. Founded as a State financial holding company, in 1984 Fincantieri became an operational company, as a result of the merger of eight of its subsidiaries, operating in the field of ship construction and repairs and manufacturing of mechanical components and diesel engines.
This transformation from holding company to operating company might sound like bureaucratic reshuffling. It was actually a bet-the-company strategic pivot.
The logic was elegant: instead of coordinating fragmented subsidiaries, Fincantieri would directly manage its shipyards as a single integrated enterprise. Design would happen in Trieste, but construction would flow to whichever yard had capacity. Skills could transfer between locations. Procurement could be centralized.
More critically, Fincantieri made a strategic decision that would define its future: enter the cruise ship market.
The Company was one of the first in the 1980s to take up the opportunity of the new trend in the cruise tourist industry and it approached the market by drawing on the experience it had acquired in previous decades as builder of transatlantic liners.
This was strategic genius. The transatlantic liner business had died with commercial aviation—no one crossed oceans by ship when jets offered the same journey in hours rather than days. But the skills required—creating comfortable, elegant passenger accommodations; managing complex interior outfitting; building reliable, seaworthy vessels—were directly transferable to cruise ships.
It was at the start of the '90s when the Crown Princess was delivered, a sparkling gem that was to become the stuff of legend, with its dolphin-like silhouette designed by Renzo Piano.
The Crown Princess delivery in 1990 marked Fincantieri's arrival in the cruise market. Having Renzo Piano—one of the world's most celebrated architects—design the vessel's exterior sent a message: these weren't just ships; they were floating works of art.
The Company begins working with the cruise sector and delivers its first cruise ship, the Crown Princess, to the Carnival Group.
The Carnival relationship would prove transformational. Throughout the 1990s, Fincantieri delivered ship after ship to Carnival and its subsidiaries: 1993 – MS Statendam (55,451 GT) for Holland America Line · 1993 – MS Maasdam (55,575 GT) for Holland America Line · 1994 – MS Ryndam (55,819 GT) for Holland America Line · 1995 – Sun Princess (77,499 GT) for Princess Cruises · 1995 – Carnival Destiny (101,353 GT) for Carnival Cruise Lines.
The Carnival Destiny, at over 100,000 gross tons, was the world's largest cruise ship at the time of its delivery. Fincantieri wasn't just entering the cruise market—it was defining the market's direction toward ever-larger vessels.
The company built expertise that Asian yards couldn't easily replicate. A cruise ship isn't just a hull with propulsion; it's a floating hotel, entertainment complex, and restaurant district combined. The interior outfitting—cabins, restaurants, theaters, casinos, spas—represents more than half the ship's cost and requires artisanal craftsmanship that Italy had in abundance.
With a strong history of building some of the greatest liners to sail the seas, with names such as Rex, Saturnia, Vulcania, Leonardo da Vinci and Grand Princess to its credit, Fincantieri continues its tradition to this day as a leading ship builder, particularly in the cruise ship segment. Fincantieri — which is comprised of seven shipyards and two centers for ship design, with the one in Trieste being the largest in Europe — has developed a long tradition in designing and building ships, with more than 200 years of history marked by the construction of more than 7,000 ships.
By the late 1990s, Fincantieri had established itself as the world's leading cruise ship builder. Fincantieri is the world's leading shipbuilding in the cruise ship sector with a market share of 35 percentage.
The cruise pivot had worked. While other European shipyards withered, Fincantieri thrived by moving up the value chain—from commodity bulk carriers to complex, high-margin cruise vessels.
V. Global Expansion & the Vard Acquisition (2008-2014)
By 2008, Fincantieri dominated European cruise shipbuilding. But CEO Giuseppe Bono, who had led the company since 2002, saw both opportunity and vulnerability. The cruise market, while growing, was cyclical. Naval orders provided stability but faced budget pressures. And the company had no meaningful presence in North America, the world's largest naval market.
Fincantieri successfully completed the acquisition of Manitowoc Marine Group from its parent company The Manitowoc Company, Inc. on 1 January 2009, which consisted of two shipyards in Wisconsin, including Marinette Marine, which built the first Freedom-class littoral combat ship. Fincantieri also purchased from Manitowoc Marine Group a topside repair yard in Ohio and one production plant in Wisconsin, making it one of the leading mid-sized shipbuilders in the United States for commercial and government customers, including the U.S. Navy and U.S. Coast Guard.
The Marinette Marine acquisition was strategically brilliant. The Wisconsin yard came with existing U.S. Navy relationships—it was already building the Freedom-class Littoral Combat Ships. For Fincantieri, buying an American shipyard provided something money couldn't easily purchase: credibility with the Pentagon and, critically, the domestic industrial base credentials required for U.S. defense contracts.
In the late 2000s, Fincantieri expanded its global footprint by acquiring the Manitowoc Marine Group from The Manitowoc Company, Inc., with the transaction closing on January 1, 2009, for approximately $120 million; this move established a U.S.-based operation focused on naval and commercial shipbuilding.
Then came an even more transformational deal. A subsidiary of Fincantieri since January 2013, the Vard Group is one of the world leaders in specialized shipbuilding for the offshore market. The Norwegian group's core business is designing and building complex and highly profiled OSVs such as PSVs, AHTSs, and OSCVs.
The Vard acquisition doubled Fincantieri's size. Already the largest shipbuilder in Europe, after the acquisition of Vard in 2013, Fincantieri group doubled in size to become the fourth largest in the world (2014).
The acquisition gave Fincantieri a global production network consisting of over 20,000 employees working in 21 shipyards in 7 countries, from Brazil to the United States, Vietnam to Norway. In keeping with its policy of diversification, this transaction has allowed it to access the offshore market, thanks to the newly-acquired company's range of support vessels for oil & gas.
Vard brought shipyards in Norway, Romania, Brazil, and Vietnam. Vard, a company listed on the Main Board of the SGX-ST, is one of the largest global shipbuilders of offshore and specialized vessels, with about 9,000 employees and nine shipyards in Norway, Romania, Brazil and Vietnam.
The strategic logic was diversification. Cruise ships were booming, but their construction was concentrated in Italy. Naval orders were stable but unpredictable. Offshore support vessels—ships that serviced oil and gas platforms—offered a third leg for the stool. When oil prices were high, offshore demand surged. When cruise bookings slowed, offshore could compensate.
The orders included six cruise ships, a number of naval vessels and 15 orders for offshore vessels at Vard. At the end of 2013 Fincantieri had an order portfolio of EUR 12.9bn, and a backlog of EUR 8bn.
Fincantieri was now a global empire: Italian cruise ships, Norwegian offshore vessels, American naval ships. The question was whether this sprawling structure could be managed efficiently—and whether the capital markets would value the diversification.
VI. The 2014 IPO & Partial Privatization
Italian state-owned shipbuilder Fincantieri will apply to list in Milan as early as Tuesday, firing the starting gun for what officials predict will be Italy's largest privatisation programme since the 1990s, with a plan to raise 12 billion euros ($16.6 billion). Matteo Renzi, Italy's prime minister, has stuck to privatization targets unveiled by his predecessor Enrico Letta in January, unveiling a program to reduce Italy's public debt of more than 2 trillion euros for the first time in six years.
The 2014 IPO placed Fincantieri at the center of Italian privatization politics. Prime Minister Matteo Renzi's government, facing crushing public debt and European Commission pressure, needed to demonstrate commitment to market-oriented reforms. Selling shares in state-owned enterprises was politically easier than cutting pensions or healthcare.
Fincantieri's shareholder, a state financing vehicle owned by the Italian Treasury, will file to list up to 49 percent of the shipyard group. Analysts estimate Fincantieri could be worth more than 1.5 billion euros. The privatization will also include a 600 million euros capital increase after it was approved by Fincantieri's shareholders.
Bankers consider Fincantieri the easiest of Italy's wholly state-owned companies to privatize because it is already run as a private enterprise.
This was the key insight: despite state ownership, Fincantieri had operated with commercial discipline for decades. Unlike politically connected industrial zombies that depended on subsidies, Fincantieri actually generated profits and won orders in competitive international markets.
IPO date: Thu 03/07/2014. IPO price: EUR 0.78. IPO type: Initial Public offering. Capital raised: EUR 356.63 million.
The IPO raised less than initially hoped—about €357 million rather than the €600 million capital increase target—reflecting challenging market conditions and investor caution about shipbuilding cyclicality. But Fincantieri was now a publicly traded company, subject to quarterly earnings pressure and institutional investor scrutiny.
Almost immediately, the IPO proved its value. In March 2015, Fincantieri won its biggest ever independent order from Carnival Corporation & plc in a 4 billion euro deal commissioning the company to build five new cruise ships.
The €4 billion Carnival order—representing multiple ships across several Carnival brands—demonstrated that public company status hadn't diminished Fincantieri's commercial capabilities. If anything, the IPO proceeds strengthened its balance sheet for large-scale contract bidding.
Since July 3, 2014, Fincantieri's market cap has increased from 968.85M to 5.59B, an increase of 477.22%. That is a compound annual growth rate of 16.61%.
For investors who bought at the IPO price of €0.78, the subsequent decade would deliver extraordinary returns. But the path would include a spectacular failed merger, a global pandemic, and a complete strategic reinvention.
VII. The Failed Chantiers de l'Atlantique Merger (2016-2021)
In 2016, a South Korean company called STX Corporation filed for bankruptcy. Among its assets: STX France, the Saint-Nazaire shipyard that built some of the world's largest cruise ships, including vessels for MSC and Royal Caribbean. Chantiers de l'Atlantique emerged from the bankruptcy of STX Corporation in 2016.
For Fincantieri, this was the opportunity of a generation. After three years of serious attempts to forge an alliance between Italy and France aimed at creating a strong European shipbuilder able to compete in the World market, the project has been abandoned at the beginning of 2021, because of the EU Commission's still outstanding investigation on the possible infringement of EU merger and fair competition rules.
The strategic logic was compelling: combining Fincantieri and Chantiers would create an unassailable European cruise shipbuilding champion. The merged entity would control an estimated 65-70% of global cruise ship construction capacity. German competitor Meyer Werft would be marginalized. Asian shipyards would face a formidable European fortress.
Hence, the ownership acquisition deal signed by the French Government, Fincantieri, and Naval Group on February 2, 2018, will expire on January 31, 2021. Under the agreement, Fincantieri was supposed to assume 50 percent ownership of Chantiers de l'Atlantique, with an additional 1 percent to be borrowed from the French state.
But French politics intervened. French President Emmanuel Macron set conditions on a bid for a majority stake, citing concerns the Italian firm might transfer French technology to a Chinese partner.
The technology transfer concerns were partially legitimate—Fincantieri had entered joint ventures with Chinese shipyards—but they also masked deeper French anxieties about ceding industrial control to a rival European power. France's approach to European integration has always involved protecting French national champions, and Chantiers de l'Atlantique represented strategic infrastructure.
Then Brussels weighed in. The merger of Chantiers and Fincantieri had, however, faced an uphill battle after the European Commission expressed doubts about the impact of the transaction in terms of competition. At the end of October 2019, the European Commission announced it had decided to open an in-depth investigation into the proposed merger citing specific concerns about competition for the construction of cruise ships.
The European Commission in 2019 launched a probe into the deal, warning that the plan could be a serious blow to competition in a cruise-ship market that isn't likely to see any new rivals emerge. The Commission cited several serious concerns, saying the "very complex nature" of cruise shipbuilding made it difficult to enter the market and that buyers could be left at the mercy of a small number of suppliers.
COVID-19 delivered the final blow. Citing the impact of COVID-19 and the current economic situation, France and Italy announced jointly that they have agreed not to proceed with the merger of two of Europe's largest shipbuilders, Chantiers de l'Atlantique and Fincantieri. First proposed in February 2018, the completion of the merger of the two state-owned shipbuilding companies had been delayed pending an anti-trust review and approval from the European Commission.
The agreement to sell Chantiers de l'Atlantique shares, signed by the French State, Fincantieri and Naval Group on February 2, 2018, will end on January 31, 2021, after having been extended five times.
The failure exposed fundamental tensions in European industrial policy. Politicians talked about European champions but protected national champions. Competition authorities worried about market concentration but ignored how that concentration was necessary to compete with subsidized Asian rivals.
Yet Fincantieri extracted something valuable from the wreckage: Naviris. In addition, the Naviris joint venture between Naval Group and Fincantieri has been fully operational since January 2020 and benefits from the support of France and Italy. Naviris is actively prospecting for export, and has launched joint R&T projects.
If Fincantieri couldn't merge with France's cruise shipbuilder, it could at least partner with France's naval shipbuilder. The Naviris joint venture, focused on naval vessels rather than cruise ships, would lay groundwork for European defense cooperation that would prove prescient.
VIII. COVID-19 Crisis & Recovery (2020-2022)
February 2020. The Diamond Princess sat quarantined in Yokohama harbor, a floating petri dish that became the global symbol of cruise industry vulnerability. The first epidemic outbreak occurred on Diamond Princess (February/ 712 infected, including 14 deaths).
For cruise lines, the pandemic was existential. The number of people who went on a cruise dropped from almost 30 million people in 2019 to under 6 million passengers in 2020.
For Fincantieri, the crisis was severe but manageable. €196 million COVID-19 related extraordinary costs. €450 million impact on net debt related to the rescheduling of installments from cruise clients.
Successfully managed to keep our people safe, with approximately 4% tested positive and 91% satisfaction expressed by employees over the COVID-19 spread prevention measures. Changing tack towards sustained growth in second half with operational best practices and engineering capabilities fully preserved from the crisis. No orders cancelled (total backlog at €35.7 bn at end FY2020), and production programmes successfully rescheduled. 7 cruise ships successfully delivered as per the pre-pandemic schedule, 4 of which in the second half, 12 more ships in Naval and Offshore and Specialized Vessels.
The critical fact: no orders cancelled. Cruise lines, even facing bankruptcy, maintained their Fincantieri contracts. Why? Because when the pandemic ended—and it would end—they would need modern, efficient ships to compete. Cancelling orders would mean losing queue positions for delivery slots extending years into the future.
Secular growth trend is still intact with expected strong pent-up demand in the aftermath of the pandemic. Disposal of older and less efficient vessels to capitalize on pent-up demand and compliance with stricter environmental regulations will drive demand for new orders in the medium-term.
The pandemic actually strengthened Fincantieri's position. Older cruise ships, inefficient and expensive to retrofit for new health protocols, were scrapped. When cruise travel resumed, lines would need new vessels—exactly what Fincantieri specialized in building.
Meanwhile, defense and offshore orders provided stability. Naval procurement continued regardless of civilian travel restrictions. Offshore wind farm support vessels—a growing segment for Vard—faced surging demand as European energy policy accelerated renewable investment.
By 2022, Fincantieri emerged from COVID-19 battered but intact. The company had preserved its skilled workforce, maintained customer relationships, and positioned itself for the post-pandemic cruise boom.
But the company needed fresh leadership. Giuseppe Bono, who had led Fincantieri for two decades, was stepping down. His successor would inherit both challenges and opportunities.
IX. The Folgiero Era & Strategic Transformation (2022-Present)
Pierroberto Folgiero, current CEO of Maire Tecnimont, will take over from Giuseppe Bono who leaves the leadership of Fincantieri after 20 years.
In April 2022, Italy's Cassa Depositi e Prestiti—the state financing vehicle that controls Fincantieri—announced that Pierroberto Folgiero would become the company's new CEO. As of May 2022, he became the Chief Executive Officer and Managing Director of the Fincantieri Group, which represents one of the largest international players in the highly complex shipbuilding sector.
Who is Folgiero? Born in Rome in 1972, he graduated in Business and Economics from L.U.I.S.S. University in Rome. He is a Chartered Accountant and has been a registered EU auditor since 1995. In 2003, he attended the Executive Education Programme in General Management at INSEAD at Fontainebleau, Paris.
His career arc reveals a turnaround specialist. He started his career at Agip Petroli (Administration, Finance and Control area) and at Ernst & Young as an Experienced Assistant, then as Corporate Finance Manager at PricewaterhouseCoopers. Since 2000, he has held various positions in the Administration, Finance and Control area of Wind Telecomunicazioni S.p.A., and in 2006 he became Corporate Development Director. In 2008, he continued his career at Tirrenia di Navigazione S.p.A. as Chief Financial Officer and as General Manager, contributing to the restructuring and privatisation of the company. In September 2010 he joined Maire Tecnimont Group as Chief Financial Officer of KT S.p.A., a company in the Maire Tecnimont Group operating as licensor and contractor in the Oil&Gas refining sector, taking over as Chief Executive Officer of the same company in June 2011.
At Tirrenia, Folgiero helped restructure and privatize Italy's troubled ferry company. At Maire Tecnimont, he led an engineering contractor through the oil price collapse and emerged with the company stronger. He understood industrial companies, financial restructuring, and navigating Italian politics.
The results have been extraordinary. Since Folgiero became CEO in May 2022, the company's market value has increased more than fivefold to about €5.2 billion.
What changed? Three strategic priorities:
First: Operational discipline. Folgiero imported practices from engineering contracting—tight project management, cost control, on-time delivery guarantees. "2024 has been a remarkable year for Fincantieri, in which we have begun to reap the first results of our strategy and industrial vision," stated CEO Pierroberto Folgiero. "The return to profitability, one year ahead of the Business Plan estimates, is clear evidence of this."
Second: The defense pivot. Fincantieri SpA plans to focus some Italian civil and military shipyards on just making warships, in the latest sign that Europe's defense-spending bonanza is reshaping industrial strategy. The state-controlled shipbuilder is preparing to boost its naval capacity and is weighing the roles of two locations in southern Italy, Chief Executive Officer Pierroberto Folgiero said. The Castellammare di Stabia site south of Naples and one in Palermo, Sicily, make both commercial and military vessels. Their use could shift as demand for warships increases. "We can easily increase military capacity and simply reallocate existing civilian production capacity elsewhere in our extensive system," Folgiero said.
In a May investor presentation, the company said it aims to capture at least €20 billion ($23.4 billion) of the windfall. The company projects its naval unit, which builds warships from frigates to destroyers and aircraft carriers, will constitute about 30% of revenue by 2027, up from 20% last year, while the cruise liner business shrinks to about 35% of sales from 44%.
Third: The underwater domain. "Underwater will be what was space 40 years ago," company CEO Pierroberto Folgiero told Breaking Defense during a recent visit to Washington.
Folgiero told Breaking Defense this meant while it is in the relatively early days, there will be a big boost for dual-use technologies, a development Fincantieri wants to get ahead of. In the big picture, he said, the company views the undersea market as worth up to $400 billion by 2030. A quarter of that, he predicted, will come from defense, which he described as the "short-term" market.
This vision crystallized in a transformational acquisition. Fincantieri announced today the closing of the acquisition of Leonardo's "Underwater Armaments & Systems" ("UAS") business line through the purchase of the entire share capital of the newly established company WASS Submarine Systems S.r.l. ("WASS"), into which the UAS business line was previously transferred.
Leonardo announced today the signing of a definitive agreement to sell its Underwater Armaments Systems (UAS) business line to Fincantieri for an Enterprise Value consideration comprising a fixed component amounting to € 300 million, subject to the usual price adjustment mechanisms, plus a variable component of up to € 115 million subject to the achievement of certain 2024 performance targets, making for a total Enterprise Value up to €415 million.
WASS was founded as a company specialising in the construction of submarine defense systems and in particular torpedoes, countermeasures and sonars. In early 2016, the company merged into Leonardo S.p.A., becoming a business line, and was renamed "Underwater Armaments & Systems" ("UAS"). The business line also includes a 50% participation in GEIE EuroTorp (established with Naval Group and Thales), dedicated to the design and construction of the MU90 light torpedo. In 2023, the UAS line of business generated revenues of approximately €160 million.
With WASS, Fincantieri now builds not just submarines but the weapons systems inside them. It's vertical integration taken to its logical conclusion: controlling everything from the hull to the torpedoes.
X. Recent Performance & Mega-Orders (2024-2025)
The transformation is showing up in the numbers. Fincantieri SpA reported a robust performance in its third quarter of 2025, with revenues increasing by 20.5% year-on-year to €6,725 million and EBITDA rising by 40.4% to €461 million. The company's stock, however, experienced a decline of 4.79% following the earnings announcement, closing at €20.24. This dip in stock price occurred despite strong financial metrics and a significant increase in order intake, which grew by 88.4% to €16 billion.
In the first nine months of 2025, the backlog increases by 32% versus FY 2024 to euro 41.0 billion, with 100 ships in the portfolio and deliveries scheduled until 2036. Soft backlog reaches euro 20.1 billion, leading to a total backlog of euro 61.1 billion, equal to 7.5 times 2024 revenues.
Let that sink in: €61.1 billion in total backlog—7.5 years of revenue visibility. In an industry notorious for boom-bust cycles, Fincantieri has built a backlog extending to 2036.
The headline order: Italian shipmaker Fincantieri locked up its largest ever order for cruise liners, agreeing to build four new vessels for Norwegian Cruise Line Holdings Ltd. for about €9 billion ($9.4 billion).
A letter of Intent for the ships was first announced in April 2024 with Reuters reporting today the finalized order is being valued at approximately $9.34 billion for the vessels to deliver between 2030 and 2036.
With a gross tonnage of approximately 226,000 tons, the new units will be the largest ever built for NCL.
These are massive vessels—among the largest cruise ships ever constructed. Building them will require expanding Monfalcone's capacity and coordinating work across multiple yards.
The Viking relationship continues strengthening. Fincantieri started its partnership with Viking in 2012. Today, the cooperation, which first began with an order of two ships, has reached a total of 16 units. This is an all-time record, the largest number of ships built by a shipyard for one sole shipowner.
On the defense side, momentum is building. In the third quarter of 2025, Fincantieri further consolidated its position as a leading player in the European naval industry, fostering industrial cooperation among allied countries and supporting the international projection of Italy's Defense sector. At the Seafuture exhibition held in La Spezia on 29 September 2025, Italy and Greece signed a preliminary agreement for the transfer to the Hellenic Navy of two vessels built by Fincantieri. The final agreement, subject to customary approvals, will also include a support package managed by Fincantieri.
In this context, the Group's expansion continues in the third quarter of 2025, with the preliminary agreement for the transfer to the Hellenic Navy of two vessels of the Italian Navy, built by Fincantieri, and the Memorandum of Understanding (MoU) signed with Polska Grupa Zbrojeniowa S.A. (PGZ) to support the modernization of the Polish Navy, including the "ORKA" submarine program. These agreements further reinforce Fincantieri's position as a key player in the European naval industry and its international standing.
One setback: the U.S. Constellation-class frigate program. The program was cancelled in November 2025, with only the first two ships already under construction to be finished and remaining four on order cancelled.
The Navy is walking away from the Constellation-class frigate program to focus on new classes of warships the service can build faster, Secretary of the Navy John Phelan announced Tuesday on social media. Under the terms negotiated with shipbuilder Fincantieri Marinette Marine, the Wisconsin shipyard will continue to build Constellation (FFG-62) and Congress (FFG-63) but will cancel the next four planned warships.
A March report by the United States Government Accountability Office claimed the U.S. Navy proceeded to order numerous design changes, meaning that five years on, the program was only 70% complete and three years late. "As a result of these changes, in part, the frigate now bears little resemblance to the parent design that the Navy touted as a built-in, risk reduction measure for the program in 2020," the report stated.
The cancellation reflects U.S. Navy bureaucratic dysfunction more than Fincantieri capability failures. Crucially, In a statement, Fincantieri said it expected to receive new orders for "amphibious, icebreaking and other special mission" ships to compensate for lost business. "On top of the aforementioned award of future orders, in order to cover the above, the agreement indemnifies Fincantieri Marine Group, on existing economic commitments and industrial impacts through measures provided by the U.S. Navy."
XI. Business Model Deep-Dive: The Shipbuilding Machine
Understanding Fincantieri requires understanding how modern shipbuilding actually works.
Fincantieri employs a staff of about 10,000 workers at eight shipyards, two design centres, one research centre and two production sites for mechanical components. Another 10,000 people contribute to its supply chains. The shipyards of Monfalcone (Gorizia), Marghera (Venice), Sestri Ponente (Genoa), Ancona, Castellammare di Stabia (Naples) and Palermo report to the Merchant Ships Business Unit while the shipyards of Riva Trigoso (Genoa) and Muggiano (La Spezia) report to the Naval Vessel Business Unit.
The Italian shipyard network is the heart of the operation. Monfalcone handles the largest cruise ships—vessels exceeding 200,000 gross tons that would dwarf the Titanic. Marghera focuses on smaller luxury cruise ships. Ancona builds medium-sized vessels. The naval yards at Riva Trigoso and Muggiano handle frigates, submarines, and patrol vessels.
"Every yard is unified by work and build practices. This unity between yards is part of what makes Fincantieri so successful. Each can build efficiently and draw on resources from the wider group when necessary. All vessels are, however, conceived and designed in Trieste, which has a team of around 200 engineers."
The design centralization is crucial. Trieste's engineering team creates standardized designs that can be adapted for specific customer requirements. This modular approach enables efficiency without sacrificing customization.
With a record orderbook, one of Fincantieri's greatest strengths lies in its integrated network of shipyards, both in Italy and abroad, according to Luigi Matarazzo, general manager of the Merchant Ships Division. Claiming a 45 percent share of the cruise ship newbuild market, Fincantieri's confirmed orderbook counts 41 cruise ships to be built and delivered through 2035. The group has altogether 18 shipyards around the world of which four yards in Italy are currently building cruise ships. (Other yards can support the newbuilds with the construction of pre-outfitted blocks and hulls.) "Each facility is capable of building complete vessels or specific sections (blocks), which are then outfitted and transferred to the designated delivery yard for assembly, outfitting, commissioning and final delivery."
Segment Analysis:
The company operates four segments:
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Shipbuilding (cruise ships, naval vessels, accommodation): The dominant segment generating roughly 70% of revenues. This includes both commercial cruise ships and military vessels.
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Offshore and Specialized Vessels: Primarily Vard's business—platform supply vessels, cable-laying ships, offshore wind support vessels.
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Equipment, Systems and Infrastructure: Ship systems, mechanical components, infrastructure projects.
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Underwater: The new segment created from the WASS acquisition—submarines, torpedoes, underwater sensors and systems.
The Underwater segment contributes markedly to the Group's results at the end of the period, with an EBITDA margin at 17.3%.
That 17.3% EBITDA margin in Underwater compares to roughly 6-7% in Shipbuilding—underwater defense systems are substantially more profitable per euro of revenue.
Customer Concentration:
The Viking relationship illustrates Fincantieri's customer strategy: This contract confirms the cruise market's full recovery and its strong momentum, with passenger volumes returned to pre-pandemic level and positive effects on Fincantieri's solid commercial pipeline, as evidenced by other significant orders signed by the Group earlier this year. It also demonstrates the strong and long-lasting relationship between Fincantieri and Viking - dating back to 2012 - and whose collaboration reaches, as of today, to a total of 20 vessels, including the two purpose-built expedition units of the subsidiary Vard.
Fincantieri has delivered throughout its history a total of 75 cruise ships to Carnival Corporation across its portfolio of cruise lines, further strengthening the long-standing collaboration between the two companies.
Long-term customer relationships provide predictable revenue and reduce selling costs. Viking knows what it's getting; Fincantieri knows what Viking wants. The relationship compounds over decades.
The Synergy Between Civil and Military:
Here's what makes Fincantieri unique: the company claims its cruise ship expertise improves its warships, and vice versa.
Cruise ships require comfortable, quiet accommodations—lessons that transfer to crew quarters on naval vessels. Naval ships require resilience and systems integration—capabilities that improve cruise ship safety systems. The dual capability creates learning loops that neither pure-play cruise builders nor pure-play naval yards possess.
XII. Playbook: Business & Investing Lessons
1. State Capitalism Done Right
Fincantieri demonstrates that state ownership doesn't doom a company to bureaucratic sclerosis. The key factors:
- Operational autonomy: The state owned shares but didn't micromanage decisions
- Commercial discipline: Contracts were won competitively, not through political allocation
- Professional management: CEOs came from industry, not political appointments
- Long-term capital: State ownership provided patient capital through industry cycles
2. The Pivot Playbook
Fincantieri's strategic evolution: commodity merchant ships → transatlantic liners → cruise ships → defense systems
Each pivot built on existing capabilities while moving up the value chain. The company never abandoned its core competence (building complex vessels) but continuously repositioned toward higher-margin segments.
3. Vertical Integration
Fincantieri doesn't just build hulls. Marine Interiors handles cabin outfitting. Fincantieri SI provides electronic systems. WASS supplies underwater weapons. The company controls its supply chain from steel plate to torpedo launcher.
4. Geographic Diversification
Italy → Norway (Vard) → United States (Marinette Marine) → Romania, Vietnam, Brazil
Each geographic expansion served a strategic purpose: Norway for offshore expertise, America for naval market access, Romania and Vietnam for cost-competitive manufacturing.
5. Crisis Management
During COVID-19, Fincantieri maintained zero order cancellations by working with customers on schedule adjustments. The company prioritized relationship preservation over short-term financial optimization—and emerged stronger.
XIII. Competitive Analysis: Porter's 5 Forces & Hamilton's 7 Powers
Porter's 5 Forces
Supplier Power: MODERATE
Ship components come from diverse suppliers—steel mills, engine manufacturers, electronics providers. For standardized components, supplier power is low. For specialized naval systems, suppliers have more leverage.
Fincantieri's vertical integration (owning Marine Interiors, Fincantieri SI, WASS) reduces supplier power in key areas.
Buyer Power: MODERATE-HIGH
Cruise lines are concentrated: Carnival, Royal Caribbean, NCL, and MSC dominate. These companies negotiate aggressively. However, Fincantieri's market position and capacity constraints limit buyer power—if you want a cruise ship in the next decade, your options are limited.
Naval buyers (governments) have significant power over domestic suppliers but face switching costs and national security considerations that favor incumbents.
Threat of Substitutes: LOW
There's no substitute for a cruise ship except another cruise ship. You can't cruise on an airplane. Land-based resorts compete for vacation spending but don't substitute for the unique cruise experience.
Threat of New Entry: LOW
Building cruise ships requires decades of accumulated expertise, billions in capital investment, and relationships with complex supply chains. No new entrant has successfully entered the large cruise ship market in decades.
Chinese yards are investing heavily but face quality perception challenges and lack the interior outfitting expertise that defines cruise ship construction.
Industry Rivalry: MODERATE
Fincantieri competes primarily with Meyer Werft (Germany) and Chantiers de l'Atlantique (France) in cruise ships. All three are capacity-constrained; demand exceeds supply. This reduces price competition.
In naval, competition is more fragmented and often politically influenced.
Hamilton's 7 Powers
1. Scale Economies: STRONG
Fincantieri's 18 shipyards enable production flexibility and procurement leverage that smaller competitors can't match. Design costs spread across more vessels.
2. Network Economies: MODERATE
Customer relationships compound: Viking's satisfaction with ship 1 led to ships 2-20. Supplier relationships improve with volume.
3. Counter-Positioning: STRONG
Asian shipyards could theoretically enter cruise shipbuilding but would cannibalize profitable container and bulk carrier businesses. They're unlikely to challenge Fincantieri directly.
4. Switching Costs: STRONG
Cruise lines invest heavily in crew training, maintenance systems, and operational procedures specific to their shipbuilder's designs. Switching means retraining and new supply chains.
5. Branding: MODERATE
"Built by Fincantieri" carries meaning in the cruise industry. Italian craftsmanship connotes quality.
6. Cornered Resource: STRONG
Skilled shipyard workers in Italy represent decades of accumulated expertise. The workforce cannot be replicated quickly.
7. Process Power: STRONG
Fincantieri's integrated design-to-delivery process, honed over 230 years, enables efficiency and reliability that competitors struggle to match.
XIV. Key Metrics to Watch
For long-term investors tracking Fincantieri, three KPIs matter most:
1. Total Backlog (Firm + Soft)
Currently €61.1 billion. This number represents future revenue visibility. Watch for: - Backlog growth relative to revenue growth - Conversion from soft backlog (letters of intent) to firm backlog (signed contracts) - Years of coverage (currently 7.5x annual revenue)
2. EBITDA Margin by Segment
Currently ~6.9% group-wide, but varying dramatically by segment: - Underwater: ~17% (the margin driver) - Shipbuilding: ~6.5% - Equipment/Systems: ~7% - Offshore: ~5%
Watch for margin expansion as the revenue mix shifts toward defense and underwater.
3. Book-to-Bill Ratio
Currently 2.4x (orders divided by revenues). Above 1.0 means the backlog is growing. The current ratio indicates demand substantially exceeds current production capacity—a sign of pricing power and growth runway.
XV. Bull and Bear Cases
Bull Case
Europe's Defense Renaissance
Furthermore, the agreement signed among NATO countries in June 2025 provides that defense spending should reach 5% of GDP by 2035, with 3.5% specifically allocated to military expenditures, thus giving a significant boost to investment in this sector.
If NATO members actually meet 5% GDP defense spending targets, naval budgets will surge. Fincantieri, as Europe's only integrated naval shipbuilder with submarine, frigate, and systems capabilities, captures disproportionate share.
Underwater Domain Expansion
The company views the undersea market as worth up to $400 billion by 2030.
Protection of undersea infrastructure (cables, pipelines), underwater surveillance, and autonomous underwater vehicles represent massive growth markets. Fincantieri's WASS acquisition positions it as an integrator across military and civilian applications.
Cruise Industry Structural Growth
Global cruise passengers are forecast to reach 40 million by 2027, up from 32 million pre-pandemic. Fleet renewal needs (environmental regulations, health protocols) drive replacement demand. Fincantieri's 45% market share compounds.
Bear Case
Execution Risk
Managing €61 billion in backlog requires perfect execution across 100+ vessels. Any significant delivery delays or cost overruns could damage customer relationships and margins.
Geopolitical Disruption
U.S.-Italy relations, European defense cooperation, and Asian competition could all shift unpredictably. The Constellation frigate cancellation shows how political factors can override commercial logic.
Cruise Industry Vulnerability
Another pandemic, economic recession, or shift in consumer preferences could devastate cruise demand. The industry's recovery from COVID-19 may not be permanent.
Capital Intensity
Shipbuilding requires continuous investment. Technical capital expenditure amounts to euro 101 million at the end of the first half of 2025, increasing compared to euro 70 million recorded in the same period of 2024, mainly due to the installation of new cranes at the Monfalcone shipyard instrumental for the construction of the jumbo ships (>200 thousand tons) in the order book.
Building ever-larger ships requires ever-larger investments in cranes, dry docks, and facilities.
XVI. Conclusion: The Next 230 Years
Fincantieri's story is ultimately about adaptation. From Bourbon warships to transatlantic liners to modern cruise ships to naval frigates to underwater systems—the company has reinvented itself repeatedly while preserving core competencies.
The Folgiero era represents perhaps the most dramatic reinvention yet: from a cruise-ship-centric company to a diversified defense and maritime platform. The €61 billion backlog provides runway. The WASS acquisition provides capabilities. The European defense surge provides demand.
CEO Pierroberto Folgiero credited the company's workforce and multi-segment strength: "We are seeing simultaneous growth in revenues, margins, and backlog—evidence of a solid industrial cycle and sustainable value creation across our business," he said.
For investors, Fincantieri represents a bet on European industrial sovereignty, continued cruise tourism growth, and the underwater domain's emergence as the next strategic frontier. The company has navigated more crises than most—world wars, industry collapses, pandemics, failed mergers—and emerged stronger each time.
Two hundred thirty years after Giovanni Edoardo Acton established a shipyard for King Ferdinando IV, Fincantieri continues building vessels that project power and deliver dreams. Whether the next chapter involves hydrogen-powered cruise ships, autonomous underwater drones, or technologies not yet imagined, one thing seems certain: the shipyard that time refused to sink will keep adapting.
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