Sometimes, indeed often, it is feelings that make the difference in business. And so if made in Italy yachts, which represent 60% of the global market, are experiencing an exciting moment, the reason is not (only) their quality: it is because even the rich have suffered from the pandemic and want to rewrite their concept of "enjoy life". Witness it 2021 to be framed by Sanlorenzo, which is one of the flagships of the Italian nautical industry: specialized in taylor made, the company led by Massimo Perotti is the symbol of craftsmanship that conquers everyone in the world, from America to the Middle East, from Europe to Asia, which thanks to the new rich Chinese is about to become the new frontier of this market. Sanlorenzo, which boasts several VIP clients (we can mention Diego Della Valle, Roman Abramovich, Valentino Rossi, the late Charles Aznavour), doubled its profit in a record six-month period and in August already exceeded one billion euros in order backlog : an unexpected result in the midst of the pandemic, especially for a company that imposes itself not to build more than a few dozen boats a year, to take care of every detail. “20-30% of these orders have already been paid for, which has forced us to revise the 2021 guidance upwards,” explains CEO Perotti, interviewed by FIRSTonline.
Doctor Perotti, 2021 is a year to remember for Sanlorenzo: why?
“We have exceeded one billion euros in orders and unlike our competitors we deal 90% with end customers, who are highly loyal. For this reason, instead of going through the dealers, we have already collected an advance of 20-30%: 60% of the turnover for 2022 has already been sold, above all thanks to superyachts, which is new for us, and 28% has also been sold of 2023".
It is true that Covid has enriched the super rich even more, but how can this trend be explained in the midst of the pandemic?
“For a psychological and emotional factor, which was even surprising, forcing us to raise our expectations for 2021. The virus has made everyone, therefore also our customers, understand that life is short and must be lived to the fullest. The boat is ideal for spending beautiful holidays in safety, but also for living and working in smart working. Then an emulative factor kicked in: if more people buy a yacht, there will be others willing to imitate them. In addition to the historical customers, many new buyers have joined in this period, and in my opinion it will not be a flash in the pan".
Why?
“For a simple fact: to date, only 3% of the so-called High net worth individuals, individuals with high net worth, own a boat. The potential of the market is therefore still to be explored: an increase of only 1% of HNWI customers, from 3 to 4%, would mean a 33% increase in turnover for us. The key factor is the services. If they improve, the customers stay: the challenge is to improve the quality of services”.
You are champions of taylor made, of quality made-to-measure products, but is this growth making you think about increasing production?
“Currently we make a few boats, about sixty a year, but made to measure, for a club of loyal customers. We expect that in 2024 the turnover will rise to 800 million, allowing us a small expansion of production capacity, but we will not go beyond 80-85 a year. We will focus above all on the American market, creating a new club in the United States, where the supply of yachts over 24 meters has practically disappeared in the last decade. We also have an acquisition in mind, not so much of brands as of shipyards, where to transfer our Italian workforce”.
In the midst of the pandemic you have increased your customers but unlike many other Italian companies, your employees too. Can you confirm it?
"Absolutely. We have about 700 employees, all in Italy, and we managed to grow by 2,4% in 2020, that is in the terrible year of Covid. Boating is cyclical but artisan excellence always pays off: in addition to our employees, we have a network of suppliers and craftsmen who have bonded even more with us during the pandemic and are one of the keys to our quality. These are workers that we only have in Italy, which in the last ten years have made us make a difference in design".
A wealth of skills that risks being lost over time: is it true that young Italians are less and less inclined to do manual work?
“Preserving these skills is also central to the attractiveness of players, like us, who offer shipowners only excellent products both for the materials used and for an association – unique in the sector – with the greatest Italian and international designers and of architecture in the country. From our observatory we see that a new interest is developing among young people in the trades of art and manufacturing. With the Sanlorenzo Academy (launched in 2018) we take on the commitment to support our territory and the new generations by promoting the technical and artisanal skills of our kids. The training we offer, within our responsible development path, focuses on the specific training of professional figures that are currently lacking and in great demand in the nautical world, in order to ensure continuity and generational turnover for local companies. An initiative that creates an important virtuous circle between industry, training and the world of work, investing in the new generations and creating employment. One fact above all: at the end of the training course, the project provides for the inclusion in Sanlorenzo of 60% of the suitable ones”.
In the last decade you said you have focused on quality and design, what will be the driver in the next few years?
“Sanlorenzo anticipated all its competitors in terms of design and now our quality is widely recognized on the market. The next ten-year cycle will be based on technology and sustainability. The recent exclusive agreement with Siemens will allow us to build 24-80 meter yachts, a segment of 1.000 boats sold per year, with Fuel Cell technology. These are boats powered by hydrogen, made from green methanol which can be more easily transport and generates zero-emission electric energy which can be used for on-board electric utilities or for powering auxiliary electric motors for low-speed propulsion. In the near future, however, it cannot be ruled out that fuel cells will be used on yachts to generate power for the main propulsion, which will therefore remain the prerogative of diesel engines for a long time. As with all innovations, there will be a period when new systems will need to be tested, developed and refined, and therefore in a sense the priority will shift from engine performance to sustainability performance. Another novelty of the future will be the charter service, with selected customers”.
Sustainability, however, has a cost: are Sanlorenzo's customers also willing to pay more for innovative and zero-emission products?
“For Sanlorenzo, sustainable development is above all an investment, started a long time ago when "sustainability" was not yet a buzz word, and then a duty. As regards cost, I would like to answer with another question: can sustainability be given a value? In our opinion at Sanlorenzo yes, and it is an "iconic" value: in the short term, sustainability will no longer be a choice, and therefore the price - which is already no problem for our customers today - will only be a variable of an asset that we will consider a must have”.
Where does your clientele come from and where will they come from in the next few years?
“The pandemic has confirmed the traditional map: half of the customers are in Europe, 20% in America, 20% in Asia-Pacific and the rest in the Middle East. The latest performances were mainly driven by North America and Asia, but more by Hong Kong, Thailand and Japan than by China: it is true that there are more and more ultra-rich in China, but to own a boat you need infrastructure, ports, and also a nautical culture that does not yet exist in that country. The next five years will still be driven by America, which is a market for over half a million private boats. Then the scepter will pass to China, which is changing very rapidly in the ways of spending and in the sophistication of tastes, especially for the so-called HNWIs. For this reason, one of the objectives is to set up Sanlorenzo Hong Kong, to distribute directly on our behalf”.
Is the customer's identikit also changing?
“The average age of the customer is always high, but more and more young people are approaching boating, especially in emerging countries”.
Wanting to find some elements of concern: how are you equipping yourself against the rise in inflation and above all the increase in the cost of raw materials?
“At the moment our production costs are 60% materials and 40% labour. In the event that inflation or some raw materials get out of control, we have prepared a clause in the contracts that will give us the possibility to renegotiate the amount owed by the customer, who will however be granted the right to exit the contract”.
