Sunseeker CEO Andrea Frabetti: Committed to the Vision (Pt 1)
After taking over as CEO of Sunseeker in mid-2019, Andrea Frabetti announced a plan to double its number of models to 22 in three years. Then Covid struck. Despite widespread challenges, Sunseeker stuck to its strategy and the portfolio growth remains on schedule as the Poole builder continues a whirlwind series of new product launches.
Andrea, you were promoted from Chief Technical Officer to Chief Executive Officer in June 2019, so after close to three years in the top job, how do you reflect on the huge ups and downs during this unique period?
It has been a very tough time, not only for Sunseeker but for most companies in the world. However, I’ll never forget how much we’ve done together as a team in a very difficult time. Personally, I’m happy with the fact we’ve delivered on all the promises we made in late 2019 and have stuck to our product development schedule. I’m really proud to be part of this exceptional group at Sunseeker.
In fact, as I’m Italian, I’ve been asked many times to have people from Italy come over to take over key positions. I never did. I think the best way is to select the right people that really love and know the company. Aside from myself, I think no other member of the Executive Committee has been at Sunseeker for less than 10 years. That means fidelity, that you love the brand, understand the mission, understand the people and are part of a family. I believe this has played a large part in the success we’ve had.
Sunseeker recently announced a forward order book of about £500m (about US$700m), the largest since Wanda Group became the majority shareholder in 2013. Considering complications with suppliers, shipping and trade, how has Sunseeker reorganised to try to keep up with demand in the Covid era?
Honestly, it would take two days to explain that. Since early 2020, we had to change our organisation hugely to become more flexible and make quicker decisions in a scenario that changes every day. We’ve been dealing with a situation nobody expected and a future nobody can predict. That’s why we dramatically changed our Executive Committee in the early summer of 2020 and started to work with a new approach — very pragmatic, quick, straight, fast and effective.
The situation needs a management team that’s creative, knows its job well and can apply counter-measures to any situation. I’ve been very lucky to have the right people working for Sunseeker. As such, we’ve been able to come back strongly, probably stronger than ever, and have improved our production capability and better supported our supply chain.
We’re not looking to increase the overall number of boats. To give some perspective, we built 160 yachts in 2019 and in 2022 we expect to produce about 135 yachts. Instead, we’ve been focusing on increasing the portfolio from 11 models (in mid-2019) to over 20, with many of the main products now focused on bigger sizes. We’re less focused on overall volume of production and concentrating on quality, reliability, delivery time and enforcing our position at the top end of the market.
Having had to reduce numbers during the Covid era, are there plans to increase staff and apprentices?
During 2020, we had some reduction, then we’ve been coming back, hiring people and recently started recruiting 50 technical apprentices. We predict the overall financial turnover in 2022 to be a little bit more than in 2019, before Covid, so we’ve resized the company accordingly.
We’re not looking to increase the overall number of boats. To give some perspective, we built 160 The complexity of our product range now better matches the market position of this company. I think we’re coming back to where Sunseeker was historically, at the high end of the market competing with the right companies. This doesn’t mean big volumes. It means a good, strong organisation.
Your focus at Sunseeker has been on expanding and upgrading the product range, which had 11 models when you arrived. With four product launches in 2022, you’re on schedule to double the number of models to 22 this year, as planned, but how difficult has it been to maintain R&D during Covid?
Having announced the product strategy in 2019, we reconsidered it with our shareholder in early 2020 after the pandemic began. However, the decision was to keep going and I think we made the right choice. Many manufacturers in the yacht industry and even the car industry preferred to postpone the introduction of new models after the pandemic arrived. We preferred to keep going, presenting seven new models in 2021, which meant we hadn’t stopped designing and developing in 2020.
The only pause for production was in April and part of May 2020, but once the government allowed us to open, we first opened the Tech Centre then the production facilities. We believed it was very important for Sunseeker to be ready to offer clients what they wanted once the market returned.
Today, we can say it was a good move, even though there were still some lockdowns in 2021. We now have a backlog of orders like we’ve never had before. Another important indicator is that the stock borne by our dealers is now almost zero. When I joined Sunseeker, the situation with stock was quite concerning, but now there’s hardly any. That means the product strategy is working, although it’s currently a very good market.
Why was there such a need for new models?
When I joined, the Sport Yacht range had only one model (74), so we added the 65 in 2020 and you’ll see another in 2023. I believe if you’re in a segment, you need to be strong. One product is not enough because a customer that loves Sport Yachts wants to move to a bigger one. We’ve been developing the Sport Yacht and Predator ranges, and since 2019 we’ve also added the Performance range with the Hawk (38) and Superhawk (55), which are part of the company’s heritage.
The Yacht range is unbelievable because we now have the new 88 Yacht and 90 Ocean launched last year and the 100 Yacht coming this year, plus the 90 Ocean Enclosed. The Ocean models (which span the Yacht and Superyacht ranges) start from 90ft today but will move into smaller models while ranging all the way up to the 50M Ocean. In the meantime, we’ve had to renovate existing ranges, like upgrading the Manhattan 52 to 55 and the 66 to 68.
What has driven your schedule for five new models in 2023 and four more in both 2024 and 2025?
The goal is to have constant renovation of a range of 20-25 models, mixing upgrades every four to five years with some completely new products. We don’t want to be launching seven new models each year — we only did that in 2021 because we had a lot of catching up to do.
We must consolidate our models in every segment while maintaining innovation, but we must not upgrade models too quickly. One of the most important drivers in the market is the resale value of your boat. Sunseeker is the leader in that. If you walk into a brokerage and ask which brand maintains value in the market for the longest time, it’s Sunseeker.
The schedule is also based on regulating the investment we’re making into new products, which is £35 million (about US$47 million) over five years. If you launch eight new models in one year and two the next, you have these huge peaks and troughs in cash requirements. We had a big surge of investment to get the portfolio to where it is today, but we have a consistent investment profile over the coming years.
The Predator 60 EVO was launched in 2019 after you joined Sunseeker. Since then, the 55 EVO (2021), 74 XPS (2021) and 65 (2022) have been added to the Predator range. Have these models lived up to your ambition for the range to be distinguished not only by its exterior but also by its interior design language?
Yes — and this has been reflected in Predator sales, which have dramatically increased. For example, the Predator 74 was launched in January 2018, but after a year, sales hadn’t matched expectations. The boat is fantastic, so last year we launched the XPS version, which has a renovated interior that’s similar in feeling to the new 65 and 55 EVO and now we’ve covered the range.
Sunseeker is top-quality technically, in terms of performance and in exterior design, but when I joined, I thought the interiors weren’t at quite as high a level. We made the changes quickly and the sales rewarded us in a good way. I met some customers who said, ‘We were waiting for that because we love your boat, the quality and the exterior design, but when we entered the boat, we didn’t say ‘wow’. Now, we say ‘wow’.”
The 65 Sport Yacht is another ‘wow’ model and has attracted a lot of attention for its SkyHelm. What was the inspiration behind this?
In April 2019 (when Frabetti was still CTO), I was at a private show for Sunseeker customers in Poole. I saw so many clients arriving in two-seat sports cars and supercars. The car park was full of brands like Aston Martin, Bentley, Lamborghini and Ferrari. I could see how much they loved driving these cars.
At the same time, I was aware of the speed limits in the UK, so I thought I’d like to give our clients the experience of driving something sporty in an environment where it’s safe to go at full speed. I decided to design the entire Sport Yacht concept around that, really underline the difference between a Sport Yacht and a Yacht.
Customers don’t want to compromise on the interior; they all want large spaces, large galley, comfort, everything! The ranges had different external lines, but it’s not enough. We needed to have an experience that starts from a different hull, different propulsion and a different way of driving a boat.
On a Sport Yacht, we need to feel the sport, feel the adrenaline, to drive it like it’s your sports car in an environment where you can enjoy it and not worry about red lights or speed limits. The SkyHelm was the result. You can turn full speed in a short space and feel low, close to the water. However, you still have a large volume and a lower helm where it can be driven like a Manhattan or a Yacht model.
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