L’industria del Design e i nuovi paradigmi – Massimo Perotti EN

We were founded in 1958, but our knowledge stems from five centuries of history. Building one of our yachts takes 900 different skills and talents. Each Sanlorenzo yacht represents the best in yacht building technology and interior design. Our customers come a long way and they deserve the chance to relax in the best place in the world. Our way of building made to measure yachts comes from the classic art of tailoring. Building a Sanlorenzo yacht takes time and passion. That's why we can only fulfill the needs of 50 customers a year. Creating your perfect yacht is a journey we'll be making together.

Yes.

Yes, of course.

Well, the experience was an excellent one and very rewarding. Please bear in mind that this was a strategic choice of Sanlorenzo, starting working with a designer, with designers not coming from the nautical sector. It dates back to 2006, 2007, and it started with Don Tony, with whom we created the first 106. Then we presented it at the trade show in Geneva in 2009, well during the crisis after the outbreak of the crisis, while our sector was really, really affected, strongly affected by the crisis. And we could also find a way out of the crisis thanks to him. So it was a very well reflected choice from the beginning. And then we will come to Altiero. Well, after this experience, working for another ship company, another one not Sanlorenzo, at the age of 44 I decided to start working with Sanlorenzo. Sanlorenzo is a site while the brand is very well known and the reputation is also very good. So the level of quality, solidity and comfort was very high. The company was a small one, 40 million euros turnover in 2005, and the store history was a long one for furniture items and fittings. So from 2005 on, the idea we came up with the idea of innovating. The owner was 75 years old, he had 55 years of work experience behind him. So the outcomes were very, very good and the brand was brought to a very high level, but the product was a little bit old-fashioned and outdated, and it is often the case. So we wanted to innovate while sticking to the tradition. So Sanlorenzo has a specific style and the design, so we couldn't put it upside down, the shape of Sanlorenzo. So at the beginning, the main difficulty was innovating while sticking to the tradition. Well, if there is a client who wants to buy a Porsche 911, well this car was designed in 1938, it was innovated 15 times in the last 78 years, but the shape is always the same. I mean, if you know, if you love this car, well 911, well you have to stick to these lines and shape. So we wanted to innovate, for example, for the interior designers. So we wanted to go out of the, to leave the nautical industry, it was a little bit outdated as I told you before, it didn't give a boost to our business for many years. And the easiest thing to do at that point in time, it was not that easy actually at that time, but anyway we decided to move to Milan and to get in touch with the best designers, and Tommi. Then another very good experience with Chittario, and then thanks to my colleague Sergio Butleri I could get some help from him and we could also come across Piero Lissoni, and this was kind of a spark. Okay, so something great from the beginning. And there were a lot of developments because he also designed the new site, production sites, the new fittings, because we had already a contract, an existing contract. So we also understood that it was very important to communicate in a specific way with more companies. So together with Piero we really worked, our work went hand in hand, and this was a very strategic partnership. If I have to identify a strategic choice that was made in the last six, eight years in our company that also led us to be listed at the start on a stock exchange, I think that this partnership with the Sony Studio and this very close cooperation with Piero was really crucial and this also made the difference and made us outstanding, stand out compared to our competitors. And the idea of working together with Milan-based designers, but we also went beyond, we also work with Christian, Negro Japoso and many other designers in the last couple of years. So the idea of working together with all these designers not coming from this sector, and this was also possible thanks to other elements. So Sanlorenzo, our yachts are made to measure, they are tailor-made. So we have old boats with more than 40 meters length, and this is a long business of 4, 20, 24 to up to 40 meters. So there is a prototype like a template, and then we can also change the fabrics and the color of marbles, but the layout is always the same and the style is always the same. Well, Sanlorenzo, so in 2004 when there was another owner, and the previous owner not me, well we always tried to practice to make, to manufacture products that are made to measure. Then he also gave me some power so I could make important decisions. So there are sometimes very high-end designers that approach and address this product, they want to make decisions, they want to be empowered, and this was something that was also done by Italian competitors and international competitors. Well, a technical infrastructure and a production structure, so we manufacture 50 boats per year, not 300. And this is another element that enables us to have made to measure production for professionalism, for quality. So we try always to, we always try to keep very high quality standards.

Well, please note that I have just turned 60 years old. I think at a specific point in time there are some important steps you want to go through. I was a manager, I was a businessman, and I was 22 years old, I had not finished my studies at university at that time, so I was very, very young. So you can see that we sell boats to the richest customers in the world, so we deal with businessmen, etc. So at the beginning it was quite difficult, I have to say, because we also, I also had this difficulty keeping the best managers with me, and this difficulty was even bigger since we were talking about a family-run company at the beginning. So we also wanted to have our professionalism, our earnings, etc., etc., our profits. I was also a CEO of a big ship company, nautical company. So given my previous work experience, I decided that Sanlorenzo was the end of a cycle: 15 years, 40 million euros. So we moved from this turnover, I moved from this turnover to 500. Well, from a Southern Europe company to a company that distributes products all over the world. And over 15 years I could keep 60 percent of the equity of the company. Well, this is something I really like in spite of our presence on the stock exchange. But I also realized that I had to make important decisions for my family, for my family members, and I thought that being on the stock exchange was the best option for all of us. It was also kind of a foresighted choice in a way. So I think that this also makes sure that there is a more managerial development of the company. I don't want to oblige my children to be managers, they can just choose what they want to do. But also this idea is a great one also from the human point of view. Well, this is a big opportunity and also financial resources. I don't want to get into details, but anyway, communication, two words: stakeholders in the world outside. And there are a lot of advantages which are really crucial. The businessman has less power in a way, and his activity is more controlled. Well, in the past I could do whatever I wanted in the company and nowadays this is no longer possible. But I would like also to share a piece of advice with all the businessmen who are here: this is not a limit of being on the stock exchange, this is an opportunity for growing and making the company grow. We see that sometimes we have private companies that are family run, and these businessmen are used to having too much power. It is important to have rules. Rules are needed as a businessman as well. So the businessman has to comply with these rules. So we also need the committees, we also need all the bodies that control the activity. And some, it can be bothering in a way, it can bother you in a way because you want to have more power. But on the other hand, it can also help the businessman grow and the company can be managed in a more professional way. So there is a control over the customers that are chosen, control on the activities that are carried out, and whatever deals with sustainability or funds and financing, etc., etc. So something that might also not deal with the company, I think that this will make companies more independent and stronger in the future. This is a big advantage. One-man show, well this is very nice, this is very effective in the first years at the beginning when the company has to be developed. But I think that the stock exchange can prepare the company to go through further steps, turning points, for a faster and better growth.

Well, first of all, I have to say that this is something we can see. So the importance of yachts in Italy for the world championship, but not just for that, we also have big ships and boats more than 24 meters. We have a very long-standing tradition. We are the first ones, 450 boats of this type in Italy out of 900 in total. So we are talking about 50, 0.5 percent. I think there is no other Italian company with such a big power as we have on the international level. And we are the Germans in the automotive sector, so concerning all these big boats and ships, and this leadership was there also 10 years ago, but today I think it's much stronger thanks to Italian manufacturers who were able to innovate themselves and have been very creative in order to improve their products. And this is also due to our competitors. I was talking about manufacturers and the suppliers from America. America has the biggest market in the world. In the last 10 years, the production of ships and boats more than 24 meters is no longer there. We have a lot of brands that do not exist any longer. Christians Prower was sold with a 250 billion dollars turnover, and Burger, Delta, well Craft, we have strong brands that have disappeared in the last 10 years. If we consider so the Italian turnover, we can say that it can also go up thanks to this. If we think about France, Monte Carlo Yachts was a very important company but did not succeed in expanding in this sector in spite of an important investment. And then we also have other countries and the companies. Well, there was Russia for example, a Russian fund came into play in an important operation that was carried out 15 days ago together with an important French company which was suffering a little bit because we are talking about ships and boats of less than 24 meters. And they said that they wanted to reduce their production and they just want to manufacture small ships and boats of less than 24 meters. So for all these reasons, the Italian industry for its work, but also thanks to the less important role of other companies, is doing very, very well. Well, we are gaining some ground in spite of the other companies. And I think that we also have an internal competitiveness. The three biggest groups are Italian: one Sanlorenzo, Ferretti, and Ferretti. And these also brought about a big acceleration, but also there were some shocks, there were some difficulties. But the product is becoming more and more beautiful. So we have internal competitors, but we had also a lot of investments in the product. So when we go to Miami or to Dusseldorf, where you have the most important European and American and South Asian markets, Southeastern Asian markets, you can see the Italian product which is much more beautiful than the products that are manufactured by the competitors up to 50, 60 meters. And then starting from that size, then we have the European, well Dutch people and German people who do much better than us. They are still leaders, right?

Well, one of my main life goals as Sanlorenzo as a company, I hope I will keep working for this company for some years, and I would like to reduce the importance of all these competitors in terms of design, in terms of quality of construction. Well, also as far as innovation is concerned, the quality, etc., we are better also for big ships and boats. But if we compare our production with the Dutch and German production, we see that they are better organized, so they can transfer onto the market another idea of quality. Sometimes it is overestimated, better than it really is. So Dutch and German boats and ships more than 60 meters, well they are sold at a price that is higher than the Italian one. This is a kind of a push factor for us, we have room for growth, for improvement. So why not? Let's roll up our sleeves as we did for products of more than 150 meters, and in this way we can also make the most and take advantage of big ships, 60, 70, 80.

Well, it is not just about accelerate. We consider that we manufacture a high quality product with a comfort that is higher than our competitors, with the painstaking care for any details. And we are also very close to art to convey the value of our brand. So our goal is to have a moderate growth, as we think that building 200, 300 boats is something that is quite far away from the idea of quality of services and products. We wanted to be the only site, the manufacturer made to measure both, so tailor-made. So we need a specific production organization and technical organization. It is more time consuming, it takes a lot of time. So it's not just a mass production. I mean, but all these features that are part of our business model as Sanlorenzo were also the recipe for success for all of us. We wouldn't, we wouldn't like to give it up. But we would like to keep working like this. And in this way, I think it's also much easier to understand the difference between a Ferrari and a Porsche. These two cars are very well built, they are also very, they also have very high performances. But Ferrari is something different, I mean it's much faster, maybe five, six times more than a Porsche. And Ferrari is a real, a truly luxury car. Then, yeah, if you consider the production, you know that Ferrari is much less produced than a Porsche. So this, we have, we need to make choices. We can't do everything. We want a brand with a specific amount and number of boats. So we wouldn't, wouldn't like to give up this business model because we think that this is a winning solution. Well, this business model and these choices allowed us in 2008 up to 2014 to have no short time work and no redundancy fund, nothing at all. So we had no crisis on the labor market as far as our sector is concerned for salaries. So we didn't increase our turnover, but we didn't have any short time work. So in the future, we will have a growth, and this growth will focus and place a lot of value on quality and the profits also thanks to the services, thanks to the growth in terms of turnover rather than a 20, 30 growth rate. And also as far as M&A operations are concerned, we have this Perini operation. We started working on that one year ago. But I think M&A operations must be carried out in a very strict way, very strictly. I mean, I had a talk with an important manager, Italian manager and businessman. I was talking to him about the beauty of all these ships, etc. And he said, well, there is too much, too many emotions, there are too many emotions. So companies must be sold when figures are sorted out, well sorted out. So you have to set aside all the emotions. And Perini, this is a good deal. And the Ferretti group is also working on that. This is the first time that we have this joint M&A operation. So and we will do that only if there is some common sense underlying this operation. It needs some time, and we also have to consider that that company has lost 180 million euros in the last 10 years with a turnover of 60 million euros, not 200 or 300. So the turnaround must be very well designed. And we also have to consider that the trend is not a positive development of that company. So the impact, the trend is very negative at the moment. And so we also have to consider the assets. I think we read something in the press and the newspapers. We will organize some meetings with Galassi, Perini, Ferretti, and we will also have to identify the limit that we will not exceed. So we are willing to make investments about, though we have to design everything in the proper way. So thank you.