Ferrari(RACE) - 2024 Q3 - Quarterly Report

Front Matter Board of Directors This section lists Ferrari N.V.'s Board of Directors, including the Executive Chairman, CEO, and Vice Chairman - John Elkann serves as Executive Chairman, Benedetto Vigna as Chief Executive Officer, and Piero Ferrari as Vice Chairman[5] Independent Registered Public Accounting Firm This section identifies Deloitte & Touche S.p.A. as the company's independent registered public accounting firm - The independent registered public accounting firm is Deloitte & Touche S.p.A[6] Certain Defined Terms This section defines key terms used in the report, clarifying that 'we,' 'our,' 'the Group,' 'the Company,' and 'Ferrari' refer to Ferrari N.V. and its subsidiaries - "We," "our," "the Group," "the Company," and "Ferrari" all refer to Ferrari N.V. and its subsidiaries[7] Introduction This section introduces the unaudited interim condensed consolidated financial statements for the three and nine months ended September 30, 2024, prepared in accordance with IAS 34 - The interim condensed consolidated financial statements are unaudited, as of September 30, 2024, and comply with IAS 34[10][13] - Financial information is presented in Euro, with some amounts in US Dollars[11] Forward-Looking Statements This section warns that forward-looking statements in the report involve risks and uncertainties that could cause actual results to differ materially from expectations - Forward-looking statements involve significant risks and uncertainties that could cause actual results to differ materially from expectations[16] - Key risks include brand value, talent retention, racing success, high-tech automotive advancements, regulatory compliance costs, supply chain disruptions, economic conditions, competition, customer preferences, manufacturing interruptions, climate change, cybersecurity, management team, dealer network, product warranties, sponsorship revenues, intellectual property, customs regulations, labor relations, tax policies, debt repayment, exchange rate fluctuations, credit risk, and potential conflicts of interest[16][18] Management's Discussion and Analysis of Financial Condition and Results of Operations Highlights This section summarizes key financial and operational highlights for the three and nine months ended September 30, 2024, including revenue, profit, EPS, balance sheet data, and vehicle shipments Consolidated Income Statement Data (as of September 30, 2024) | Indicator | Q3 2024 (€ million) | Q3 2023 (€ million) | 9M 2024 (€ million) | 9M 2023 (€ million) | | :--- | :--- | :--- | :--- | :--- | | Net Revenues | 1,644 | 1,544 | 4,941 | 4,447 | | Operating Profit (EBIT) | 467 | 423 | 1,420 | 1,245 | | Profit Before Tax | 466 | 426 | 1,417 | 1,235 | | Net Profit | 375 | 332 | 1,140 | 963 | | Net Profit Attributable to Parent Company Owners | 374 | 330 | 1,137 | 959 | | Basic EPS (Euro) | 2.08 | 1.82 | 6.32 | 5.28 | | Diluted EPS (Euro) | 2.08 | 1.82 | 6.31 | 5.28 | | Approved Dividend per Share (Euro) | 2.443 | 1.810 | 2.443 | 1.810 | | Approved Dividend per Share (USD) | 2.59886 | 1.98756 | 2.59886 | 1.98756 | Consolidated Statement of Financial Position Data (as of September 30, 2024) | Indicator | Sep 30, 2024 (€ million) | Dec 31, 2023 (€ million) | | :--- | :--- | :--- | | Cash and Cash Equivalents | 1,529 | 1,122 | | Receivables from Financing Activities | 1,531 | 1,451 | | Total Assets | 8,989 | 8,051 | | Debt | 3,096 | 2,477 | | Total Equity Attributable to Parent Company Owners | 3,337 | 3,061 | | Issued Common Shares (thousands) | 179,401 | 180,418 | Other Statistical Information (as of September 30, 2024) | Indicator | Q3 2024 Shipments | Q3 2023 Shipments | 9M 2024 Shipments | 9M 2023 Shipments | | :--- | :--- | :--- | :--- | :--- | | Total Shipments | 3,383 | 3,459 | 10,427 | 10,418 | | Average Number of Employees | 5,392 | 4,951 | 5,290 | 4,953 | - On September 2, 2024, Ferrari announced UniCredit S.p.A. will become a partner for its F1 racing activities starting January 1, 2025[26] Results of Operations This section analyzes operating results for the three and nine months ended September 30, 2024, showing growth in net revenues, operating profit, and net profit, driven by product mix and personalization Three Months Ended September 30, 2024 Compared to Three Months Ended September 30, 2023 Net revenues increased by 6.5% to €1.644 billion, operating profit by 10.3% to €467 million, and net profit by 13.0% to €375 million, driven by product mix and new sponsorships Consolidated Income Statement Data (Three Months Ended September 30, 2024) | Indicator | 2024 (€ million) | 2023 (€ million) | Change (€ million) | Change (%) | | :--- | :--- | :--- | :--- | :--- | | Net Revenues | 1,644 | 1,544 | 100 | 6.5 | | Cost of Sales | 827 | 779 | 48 | 6.2 | | Selling, General and Administrative Costs | 135 | 119 | 16 | 13.7 | | Research and Development Costs | 212 | 221 | (9) | (3.8) | | Operating Profit (EBIT) | 467 | 423 | 44 | 10.3 | | Net Profit | 375 | 332 | 43 | 13.0 | Net Revenues Composition (Three Months Ended September 30, 2024) | Revenue Source | 2024 (€ million) | 2024 Share (%) | 2023 (€ million) | 2023 Share (%) | Change (€ million) | Change (%) | | :--- | :--- | :--- | :--- | :--- | :--- | :--- | | Cars and Spare Parts | 1,400 | 85.2 | 1,330 | 86.2 | 70 | 5.2 | | Sponsorship, Commercial and Brand | 174 | 10.6 | 145 | 9.4 | 29 | 20.4 | | Other | 70 | 4.2 | 69 | 4.4 | 1 | 1.7 | | Total Net Revenues | 1,644 | 100.0 | 1,544 | 100.0 | 100 | 6.5 | - Revenues from cars and spare parts increased due to a richer product and country mix and higher contribution from personalization, partially offset by negative foreign exchange impacts from the depreciation of the US Dollar and Japanese Yen against the Euro[33] - Total shipments decreased from 3,459 units in Q3 2023 to 3,383 units in Q3 2024, with internal combustion engine models accounting for 45% and hybrid models for 55% of the product mix[34] - Sponsorship, commercial, and brand revenues grew by 20.4%, primarily driven by new sponsorship agreements[36] - Operating profit growth was primarily driven by the positive contribution from product mix (Daytona SP3 and 499P Modificata) and personalization, along with new sponsorships and lower costs from F1 season ranking, partially offset by increased selling, general and administrative costs and negative foreign exchange impacts[45] - Income tax expense decreased, with the effective tax rate falling from 22.0% to 19.5%, benefiting from the patent box tax regime[49][50] Nine Months Ended September 30, 2024 Compared to Nine Months Ended September 30, 2023 Net revenues grew 11.1% to €4.941 billion, operating profit 14.0% to €1.420 billion, and net profit 18.4% to €1.140 billion, driven by product mix and personalization Consolidated Income Statement Data (Nine Months Ended September 30, 2024) | Indicator | 2024 (€ million) | 2023 (€ million) | Change (€ million) | Change (%) | | :--- | :--- | :--- | :--- | :--- | | Net Revenues | 4,941 | 4,447 | 494 | 11.1 | | Cost of Sales | 2,465 | 2,216 | 249 | 11.2 | | Selling, General and Administrative Costs | 402 | 346 | 56 | 16.1 | | Research and Development Costs | 648 | 629 | 19 | 3.0 | | Operating Profit (EBIT) | 1,420 | 1,245 | 175 | 14.0 | | Net Profit | 1,140 | 963 | 177 | 18.4 | Net Revenues Composition (Nine Months Ended September 30, 2024) | Revenue Source | 2024 (€ million) | 2024 Share (%) | 2023 (€ million) | 2023 Share (%) | Change (€ million) | Change (%) | | :--- | :--- | :--- | :--- | :--- | :--- | :--- | | Cars and Spare Parts | 4,256 | 86.1 | 3,830 | 86.1 | 426 | 11.1 | | Sponsorship, Commercial and Brand | 487 | 9.9 | 422 | 9.5 | 65 | 15.4 | | Other | 198 | 4.0 | 195 | 4.4 | 3 | 1.7 | | Total Net Revenues | 4,941 | 100.0 | 4,447 | 100.0 | 494 | 11.1 | - Revenues from cars and spare parts increased due to a richer product and country mix and higher contribution from personalization, partially offset by negative foreign exchange impacts from the depreciation of the US Dollar, Japanese Yen, and Chinese Renminbi against the Euro[57] - Total shipments were 10,427 units, largely flat compared to 10,418 units in the prior year, with internal combustion engine models and hybrid models each accounting for 50% of the product mix[58] - Sponsorship, commercial, and brand revenues grew by 15.4%, primarily attributed to new sponsorship agreements and lifestyle activities[60] - Operating profit growth was primarily driven by the positive contribution from product mix (Daytona SP3 and 499P Modificata) and personalization, new sponsorships, and a partial release of US automotive environmental provisions, partially offset by increased R&D and selling, general and administrative costs, and negative foreign exchange impacts[69] - Net financial expenses decreased by 69.8%, primarily due to higher interest income on cash and cash equivalents and positive net foreign exchange impacts, partially offset by the impact of gains from a partial cash tender offer for bonds in the prior year[72] - Income tax expense increased, but the effective tax rate decreased from 22.0% to 19.5%, benefiting from the patent box tax regime[74][75] Liquidity and Capital Resources This section discusses Ferrari's liquidity needs and capital resource management, emphasizing cash flow from operations, available liquidity, and committed credit lines to fund operations, investments, and shareholder returns Liquidity Overview Ferrari requires liquidity for operations, obligations, capital investments, and shareholder returns, met by cash generation and available credit lines, with plans for share buybacks and increased dividend payout - The company requires liquidity to fund operations, meet obligations, make capital investments, and provide returns to shareholders[77] - The company plans to execute a share buyback program of approximately €2 billion by 2026 and increase its dividend payout ratio from 30% to 35% of adjusted net profit (starting from 2022)[77] - The company believes its cash generation capabilities and available liquidity are sufficient to meet its liquidity needs[78] Cyclical Nature of Our Cash Flows Operating working capital fluctuates monthly due to production, sales, financial services, capital expenditure timing, and tax payments, with high capital expenditures supporting product and technology expansion - Operating working capital is subject to monthly fluctuations influenced by production and sales volumes, financial services activities, timing of capital expenditures, and tax payments[79] - The company is currently in a period of structurally high capital expenditures to expand automotive architectures, prioritize innovation and advanced technologies, and increase hybrid and electric powertrains[81] - The new e-building, inaugurated in June 2024 and expected to be operational in early 2025, will be used for the production and development of internal combustion engine, hybrid, and full-electric models, as well as strategic electric components[81] Cash Flows Cash and cash equivalents increased by €407 million for the nine months ended September 30, 2024, driven by reduced financing outflows and increased operating inflows, partially offset by higher investing outflows Summary of Cash Flow Statement (Nine Months Ended September 30, 2024) | Indicator | 2024 (€ million) | 2023 (€ million) | | :--- | :--- | :--- | | Cash and Cash Equivalents at Beginning of Period | 1,122 | 1,389 | | Cash Flow from Operating Activities | 1,431 | 1,189 | | Cash Flow from Investing Activities | (711) | (551) | | Cash Flow from Financing Activities | (313) | (1,010) | | Exchange Rate Differences | — | (5) | | Total Change in Cash and Cash Equivalents | 407 | (377) | | Cash and Cash Equivalents at End of Period | 1,529 | 1,012 | - Cash and cash equivalents increased by €407 million in the first nine months of 2024, primarily due to a €697 million reduction in cash outflow from financing activities and a €242 million increase in cash inflow from operating activities, partially offset by a €160 million increase in cash outflow from investing activities[85][86] - The increase in cash flow from operating activities was driven by a €191 million increase in net profit (excluding non-cash items) and a €191 million reduction in cash absorbed by inventories, trade receivables, and trade payables[86] - The increase in cash outflow from investing activities was primarily driven by higher investments in property, plant, and equipment and intangible assets, reflecting product and infrastructure development plans[86] - The decrease in cash outflow from financing activities was mainly due to a €556 million reduction in debt repayments and a €308 million increase in proceeds from debt issuance, partially offset by a €111 million increase in dividend payments and a €56 million increase in share repurchases[86] Capital Expenditures Capital expenditures totaled €787 million for the nine months ended September 30, 2024, significantly increasing due to investments in intangible assets and property, plant, and equipment for product and infrastructure development Capital Expenditures Breakdown (Nine Months Ended September 30, 2024) | Category | 2024 (€ million) | 2023 (€ million) | | :--- | :--- | :--- | | Total Intangible Assets | 370 | 342 | | Of which: Externally Acquired and Internally Generated Development Costs | 352 | 323 | | Total Property, Plant and Equipment | 417 | 250 | | Of which: Land and Industrial Buildings | 52 | 21 | | Of which: Advances and Assets Under Construction | 256 | 132 | | Total Capital Expenditures | 787 | 592 | - Investments in intangible assets primarily support the development of existing and future product portfolios, including hybrid and electric technologies[101] - Investments in property, plant, and equipment are mainly for infrastructure projects such as the new e-building, automotive and engine production lines, and a new paint shop[105] - Contractual commitments for property, plant, and equipment amounted to €306 million as of September 30, 2024, a significant increase from €115 million as of December 31, 2023, reflecting a period of structurally high capital expenditures[106] Non-GAAP Financial Measures This section presents non-GAAP financial measures like EBITDA, Adjusted EBIT, and Free Cash Flow, used to assess performance by excluding non-recurring items and providing a clearer business view EBITDA and Adjusted EBITDA EBITDA is net profit before tax, finance costs, and D&A; Adjusted EBITDA equals EBITDA in the reporting period due to no adjustments EBITDA and Adjusted EBITDA (as of September 30, 2024) | Indicator | Q3 2024 (€ million) | Q3 2023 (€ million) | 9M 2024 (€ million) | 9M 2023 (€ million) | | :--- | :--- | :--- | :--- | :--- | | Net Profit | 375 | 332 | 1,140 | 963 | | Income Tax Expense | 91 | 94 | 277 | 272 | | Net Financial Expenses/(Income) | 1 | (3) | 3 | 10 | | Operating Profit (EBIT) | 467 | 423 | 1,420 | 1,245 | | Amortization and Depreciation | 171 | 172 | 492 | 476 | | EBITDA | 638 | 595 | 1,912 | 1,721 | | Adjustments | — | — | — | — | | Adjusted EBITDA | 638 | 595 | 1,912 | 1,721 | - Adjusted EBITDA is equal to EBITDA in the reporting period due to the absence of adjustment items[112] Adjusted Operating Profit (Adjusted EBIT) Adjusted EBIT is operating profit excluding significant non-recurring items; it equals EBIT in the reporting period due to no adjustments Operating Profit (EBIT) and Adjusted Operating Profit (Adjusted EBIT) (as of September 30, 2024) | Indicator | Q3 2024 (€ million) | Q3 2023 (€ million) | 9M 2024 (€ million) | 9M 2023 (€ million) | | :--- | :--- | :--- | :--- | :--- | | Operating Profit (EBIT) | 467 | 423 | 1,420 | 1,245 | | Adjustments | — | — | — | — | | Adjusted Operating Profit (Adjusted EBIT) | 467 | 423 | 1,420 | 1,245 | - Adjusted Operating Profit is equal to Operating Profit in the reporting period due to the absence of adjustment items[116] Adjusted Net Profit Adjusted Net Profit is net profit excluding significant non-recurring items (net of tax); it equals net profit in the reporting period due to no adjustments Net Profit and Adjusted Net Profit (as of September 30, 2024) | Indicator | Q3 2024 (€ million) | Q3 2023 (€ million) | 9M 2024 (€ million) | 9M 2023 (€ million) | | :--- | :--- | :--- | :--- | :--- | | Net Profit | 375 | 332 | 1,140 | 963 | | Adjustments | — | — | — | — | | Adjusted Net Profit | 375 | 332 | 1,140 | 963 | - Adjusted Net Profit is equal to Net Profit in the reporting period due to the absence of adjustment items[119] Adjusted Basic Earnings per Common Share and Adjusted Diluted Earnings per Common Share Adjusted basic and diluted EPS exclude significant non-recurring items (net of tax); they equal basic and diluted EPS in the reporting period due to no adjustments Adjusted Basic and Diluted EPS (as of September 30, 2024) | Indicator | Q3 2024 | Q3 2023 | 9M 2024 | 9M 2023 | | :--- | :--- | :--- | :--- | :--- | | Net Profit Attributable to Parent Company Owners (€ million) | 374 | 330 | 1,137 | 959 | | Basic EPS (€) | 2.08 | 1.82 | 6.32 | 5.28 | | Adjusted Basic EPS (€) | 2.08 | 1.82 | 6.32 | 5.28 | | Diluted EPS (€) | 2.08 | 1.82 | 6.31 | 5.28 | | Adjusted Diluted EPS (€) | 2.08 | 1.82 | 6.31 | 5.28 | - Adjusted basic and diluted EPS are equal to basic and diluted EPS in the reporting period due to the absence of adjustment items[122] Net (Debt)/Cash and Net Industrial (Debt)/Cash Net (Debt)/Cash and Net Industrial (Debt)/Cash are key metrics for capital structure and financial leverage analysis, both increasing as of September 30, 2024 Net (Debt)/Cash and Net Industrial (Debt)/Cash (as of September 30, 2024) | Indicator | Sep 30, 2024 Group (€ million) | Sep 30, 2024 Industrial Activities (€ million) | Dec 31, 2023 Group (€ million) | Dec 31, 2023 Industrial Activities (€ million) | | :--- | :--- | :--- | :--- | :--- | | Bonds and Notes | (1,405) | (1,405) | (904) | (904) | | Asset-Backed Financing (Securitization) | (1,252) | — | (1,166) | — | | Borrowings from Banks and Other Financial Institutions | (268) | (209) | (291) | (218) | | Lease Liabilities | (131) | (131) | (73) | (73) | | Other Debt | (40) | (9) | (43) | (1) | | Total Third-Party Debt | (3,096) | (1,754) | (2,477) | (1,196) | | Cash and Cash Equivalents | 1,529 | 1,488 | 1,122 | 1,088 | | Net (Debt)/Cash | (1,567) | (246) | (1,355) | (99) | - Net (Debt)/Cash and Net Industrial (Debt)/Cash are key indicators used by the company to analyze its capital structure and financial leverage[126] - Net (Debt)/Cash from financial services activities primarily relates to asset-backed financing (securitization) of receivables generated by US financial services activities[134] Cash and Cash Equivalents Cash and cash equivalents increased to €1.529 billion as of September 30, 2024, with 88% denominated in Euro, and Chinese cash repatriation restrictions not adversely affecting liquidity - As of September 30, 2024, cash and cash equivalents amounted to €1.529 billion, an increase from €1.122 billion as of December 31, 2023[135] - As of September 30, 2024, 88% of cash and cash equivalents were denominated in Euro (compared to 80% as of December 31, 2023)[136] - Cash held in China (€45 million) is subject to repatriation restrictions, but the company does not believe this will adversely affect its liquidity[136] Cash and Cash Equivalents Currency Composition (as of September 30, 2024) | Currency | Sep 30, 2024 (€ million) | Dec 31, 2023 (€ million) | | :--- | :--- | :--- | | Euro | 1,346 | 895 | | US Dollar | 88 | 97 | | Chinese Yuan | 46 | 81 | | British Pound | 13 | 20 | | Other Currencies | 36 | 29 | | Total | 1,529 | 1,122 | Total Available Liquidity Total available liquidity, including cash and committed credit lines, increased to €2.079 billion as of September 30, 2024 Total Available Liquidity (as of September 30, 2024) | Indicator | Sep 30, 2024 (€ million) | Dec 31, 2023 (€ million) | | :--- | :--- | :--- | | Cash and Cash Equivalents | 1,529 | 1,122 | | Undrawn Committed Credit Lines | 550 | 600 | | Total Available Liquidity | 2,079 | 1,722 | - As of September 30, 2024, total available liquidity was €2.079 billion, an increase from €1.722 billion as of December 31, 2023[139] Free Cash Flow and Free Cash Flow from Industrial Activities Free cash flow increased to €719 million for the nine months ended September 30, 2024, with industrial free cash flow at €804 million, driven by higher net profit and reduced working capital absorption Free Cash Flow (Nine Months Ended September 30, 2024) | Indicator | 2024 Group (€ million) | 2024 Industrial Activities (€ million) | 2023 Group (€ million) | 2023 Industrial Activities (€ million) | | :--- | :--- | :--- | :--- | :--- | | Cash Flow from Operating Activities | 1,431 | 1,516 | 1,189 | 1,260 | | Investments in Property, Plant and Equipment and Intangible Assets | (712) | (712) | (553) | (553) | | Free Cash Flow | 719 | 804 | 636 | 707 | - For the nine months ended September 30, 2024, free cash flow was €719 million, an increase of €83 million from the prior year[148] - Industrial activities free cash flow increased by €97 million, primarily due to a €191 million increase in net profit (excluding non-cash items) and a €191 million reduction in cash absorbed by inventories, trade receivables, and trade payables[149] Constant Currency Information This section explains the use of constant currency information to evaluate revenue changes, excluding foreign currency translation and hedging impacts, for a clearer view of local currency performance - The company uses constant currency information to evaluate changes in revenues, excluding the impact of foreign currency translation and hedging transactions[150] - The constant currency calculation method involves applying prior period average exchange rates and eliminating foreign exchange hedging differences[150] Risk Factors The company faces various business risks and uncertainties; readers should refer to the detailed risk factors in the 2023 Annual Report and Form 20-F - The company faces various business risks and uncertainties; detailed information is available in the "Risk Factors" section of the 2023 Annual Report and Form 20-F[151] Outlook Ferrari is confident in its 2024 guidance, expecting benefits from product mix, personalization, new sponsorships, and increased investments, while managing cost inflation and higher capital expenditures - The company is confident in its 2024 guidance, expecting to benefit from a positive product and country mix and stronger personalization services[153] - Cost inflation is expected to persist, with continued brand investments and increased racing expenses[153] - Industrial free cash flow is projected to remain strong, partially offset by increased capital expenditures and higher tax payments[153] 2024 Guidance | Indicator | 2023 Actual | 2024 Guidance | | :--- | :--- | :--- | | Net Revenues (€B) | 6.0 | >6.55 | | Adjusted Operating Profit (Adjusted EBIT) (Margin %) | 1.62 (27.1%) | ≥1.82 (≥27.5%) | | Adjusted Diluted EPS (€) | 6.90 | ≥7.90 | | Adjusted EBITDA (Margin %) | 2.28 (38.2%) | ≥2.50 (≥38%) | | Industrial Free Cash Flow (€B) | 0.93 | Up to 0.95 | Interim Condensed Consolidated Financial Statements at and for the Three and Nine Months Ended September 30, 2024 (Unaudited) Interim Consolidated Income Statement The interim consolidated income statement for the three and nine months ended September 30, 2024, shows significant growth in net revenues, operating profit, and net profit Interim Consolidated Income Statement (as of September 30, 2024) | Indicator | Q3 2024 (€ thousand) | Q3 2023 (€ thousand) | 9M 2024 (€ thousand) | 9M 2023 (€ thousand) | | :--- | :--- | :--- | :--- | :--- | | Net Revenues | 1,644,439 | 1,544,032 | 4,941,127 | 4,446,746 | | Cost of Sales | 827,074 | 778,749 | 2,465,268 | 2,216,097 | | Selling, General and Administrative Costs | 134,929 | 118,632 | 401,786 | 346,068 | | Research and Development Costs | 212,490 | 220,909 | 647,991 | 628,875 | | Operating Profit (EBIT) | 466,617 | 423,116 | 1,419,817 | 1,245,042 | | Net Profit | 374,913 | 331,656 | 1,140,409 | 962,964 | | Net Profit Attributable to Parent Company Owners | 374,173 | 329,821 | 1,137,661 | 958,542 | | Basic EPS (€) | 2.08 | 1.82 | 6.32 | 5.28 | | Diluted EPS (€) | 2.08 | 1.82 | 6.31 | 5.28 | Interim Consolidated Statement of Comprehensive Income The interim consolidated statement of comprehensive income for the three and nine months ended September 30, 2024, reports total comprehensive income of €379 million and €1.131 billion, respectively Interim Consolidated Statement of Comprehensive Income (as of September 30, 2024) | Indicator | Q3 2024 (€ thousand) | Q3 2023 (€ thousand) | 9M 2024 (€ thousand) | 9M 2023 (€ thousand) | | :--- | :--- | :--- | :--- | :--- | | Net Profit | 374,913 | 331,656 | 1,140,409 | 962,964 | | Gains/(Losses) on Cash Flow Hedges | 16,931 | (48,714) | (9,190) | (43,525) | | Exchange Differences on Translation of Foreign Operations | (8,056) | 4,699 | (2,057) | 872 | | Related Tax Impact | (5,057) | 13,411 | 1,986 | 11,727 | | Total Other Comprehensive (Loss)/Income (Net of Tax) | 3,818 | (30,604) | (9,261) | (30,926) | | Total Comprehensive Income | 378,731 | 301,052 | 1,131,148 | 932,038 | | Total Comprehensive Income Attributable to Parent Company Owners | 378,055 | 299,056 | 1,128,381 | 927,898 | Interim Consolidated Statement of Financial Position Total assets increased to €8.989 billion as of September 30, 2024, driven by intangible assets, property, plant, and equipment, finance receivables, and cash, with total debt also rising Interim Consolidated Statement of Financial Position (as of September 30, 2024) | Indicator | Sep 30, 2024 (€ thousand) | Dec 31, 2023 (€ thousand) | | :--- | :--- | :--- | | Goodwill | 785,182 | 785,182 | | Intangible Assets | 1,508,356 | 1,419,699 | | Property, Plant and Equipment | 1,767,437 | 1,575,200 | | Total Non-Current Assets | 4,370,722 | 4,065,305 | | Inventories | 1,031,451 | 948,514 | | Receivables from Financing Activities | 1,531,018 | 1,451,158 | | Cash and Cash Equivalents | 1,528,690 | 1,121,981 | | Total Current Assets | 4,618,456 | 3,986,007 | | Total Assets | 8,989,178 | 8,051,312 | | Equity Attributable to Parent Company Owners | 3,336,951 | 3,060,888 | | Debt | 3,095,780 | 2,477,186 | | Trade Payables | 859,235 | 930,560 | | Total Equity and Liabilities | 8,989,178 | 8,051,312 | Interim Consolidated Statement of Cash Flows The interim consolidated statement of cash flows for the nine months ended September 30, 2024, shows ending cash and cash equivalents at €1.529 billion, with positive operating cash flow Interim Consolidated Statement of Cash Flows (Nine Months Ended September 30, 2024) | Indicator | 2024 (€ thousand) | 2023 (€ thousand) | | :--- | :--- | :--- | | Cash and Cash Equivalents at Beginning of Period | 1,121,981 | 1,388,901 | | Total Cash Flow from Operating Activities | 1,431,637 | 1,189,108 | | Total Cash Flow from Investing Activities | (711,404) | (550,801) | | Total Cash Flow from Financing Activities | (312,917) | (1,010,392) | | Exchange Rate Differences | (607) | (4,372) | | Total Change in Cash and Cash Equivalents | 406,709 | (376,457) | | Cash and Cash Equivalents at End of Period | 1,528,690 | 1,012,444 | Interim Consolidated Statement of Changes in Equity The interim consolidated statement of changes in equity for the nine months ended September 30, 2024, shows equity attributable to the parent company increasing to €3.337 billion, influenced by net profit, dividends, and share repurchases Interim Consolidated Statement of Changes in Equity (Nine Months Ended September 30, 2024) | Indicator | Sep 30, 2024 Equity Attributable to Parent Company Owners (€ thousand) | Sep 30, 2023 Equity Attributable to Parent Company Owners (€ thousand) | | :--- | :--- | :--- | | Balance as of December 31, 2023 | 3,060,888 | 2,592,857 | | Net Profit | 1,137,661 | 958,542 | | Other Comprehensive (Loss)/Income | (9,280) | (30,644) | | Dividends | (439,918) | (328,631) | | Share Buybacks | (430,562) | (374,399) | | Share-Based Compensation | 18,162 | 16,791 | | Balance as of September 30, 2024 | 3,336,951 | 2,834,516 | Notes to the Interim Condensed Consolidated Financial Statements This section provides detailed notes to the interim condensed consolidated financial statements, covering background, basis of preparation, new accounting standards, financial risks, revenue, costs, taxes, EPS, assets, liabilities, equity, related party transactions, and cash flows 1. Background and Basis of Presentation Ferrari is a leading luxury brand, designing, engineering, manufacturing, and selling high-performance luxury sports cars globally, also generating revenue from sponsorships and financial services - Ferrari primarily designs, engineers, manufactures, and sells high-performance luxury sports cars through a global network of 180 authorized dealers[175] - The company generates revenue from sponsorship agreements and brand management activities, and provides retail customer financing services through its wholly-owned subsidiary, Ferrari Financial Services Inc[175] - Ferrari participates in the F1 World Championship and World Endurance Championship through its Scuderia Ferrari team, with racing activities central to its marketing and technological innovation[175] 2. Authorization of Interim Condensed Consolidated Financial Statements and Compliance with International Financial Reporting Standards The interim condensed consolidated financial statements were authorized for issue on November 5, 2024, prepared in accordance with IAS 34, and consistent with 2023 annual accounting policies - The interim condensed consolidated financial statements were authorized for issue on November 5, 2024, and comply with IAS 34[176] - Accounting policies are consistent with those as of December 31, 2023, and comply with IFRS as endorsed by the IASB and the European Union[176] 3. Basis of Preparation for Interim Condensed Consolidated Financial Statements Financial statement preparation involves management estimates and assumptions, subject to future changes, with new and future IFRS standards and amendments assessed for impact - Financial statement preparation involves management estimates and assumptions, which may be revised in the future based on actual circumstances[177] - New and amended standards effective from January 1, 2024, include revisions to IAS 1, IFRS 16, IAS 7, and IFRS 7, which have no material impact on the company[180][181][182][183][184] - Future standards not yet effective include IAS 21, IFRS 18, IFRS 19, and amendments to IFRS 9 and IFRS 7, with the company currently assessing their potential impact[185][186][187][188][191] - There were no changes in the scope of consolidation during the reporting period[192] 4. Financial Risk Factors The Group faces various operational financial risks, including financial market risks (foreign exchange, interest rates, commodity prices), credit risk, and liquidity risk - The Group faces financial market risks (foreign exchange, interest rates, commodity prices), credit risk, and liquidity risk[193] - Detailed information is available in Note 30 to the 2023 Annual Consolidated Financial Statements[193] 5. Other Information This section lists key foreign exchange rates used to translate other currencies into Euro, including USD, GBP, CHF, JPY, CNY, AUD, CAD, and SGD Key Foreign Exchange Rates (as of September 30, 2024) | Currency | 9M 2024 Average Rate | 9M 2023 Average Rate | Sep 30, 2024 Rate | Dec 31, 2023 Rate | | :--- | :--- | :--- | :--- | :--- | | US Dollar | 1.0871 | 1.1196 | 1.0831 | 1.0594 | | British Pound | 0.8514 | 0.8354 | 0.8709 | 0.8646 | | Swiss Franc | 0.9581 | 0.9439 | 0.9777 | 0.9669 | | Japanese Yen | 164.2864 | 159.8200 | 149.4778 | 158.1000 | | Chinese Yuan | 7.8248 | 7.8511 | 7.6174 | 7.7352 | 6. Net Revenues Net revenues for the three and nine months ended September 30, 2024, primarily comprise cars and spare parts, sponsorship, commercial, and brand, with other revenues including financial services and engine sales Net Revenues Composition (as of September 30, 2024) | Revenue Source | Q3 2024 (€ thousand) | Q3 2023 (€ thousand) | 9M 2024 (€ thousand) | 9M 2023 (€ thousand) | | :--- | :--- | :--- | :--- | :--- | | Cars and Spare Parts | 1,400,317 | 1,330,652 | 4,256,158 | 3,830,110 | | Sponsorship, Commercial and Brand | 174,338 | 144,776 | 486,973 | 422,002 | | Other | 69,784 | 68,604 | 197,996 | 194,634 | | Total Net Revenues | 1,644,439 | 1,544,032 | 4,941,127 | 4,446,746 | - Starting from 2024, remaining net revenues from engine sales to Maserati are included in "Other" net revenues, as the supply contract expired in December 2023[197] - Interest and other financial income from financial services activities amounted to €94,794 thousand for the nine months ended September 30, 2024, compared to €72,038 thousand for the same period in 2023[198] 7. Cost of Sales Cost of sales for the three and nine months ended September 30, 2024, primarily includes materials, components, labor, depreciation, insurance, transport, and warranty costs for cars and spare parts - Cost of sales primarily includes materials, components, labor, depreciation, amortization, insurance, transport, and warranty costs for cars and spare parts[199] Cost of Sales (as of September 30, 2024) | Indicator | Q3 2024 (€ thousand) | Q3 2023 (€ thousand) | 9M 2024 (€ thousand) | 9M 2023 (€ thousand) | | :--- | :--- | :--- | :--- | :--- | | Cost of Sales | 827,074 | 778,749 | 2,465,268 | 2,216,097 | - Interest and other financial expenses from financial services activities amounted to €62,731 thousand for the nine months ended September 30, 2024, compared to €43,540 thousand for the same period in 2023[200] 8. Selling, General and Administrative Costs Selling, general, and administrative costs for the three and nine months ended September 30, 2024, include sales personnel, marketing, retail store costs, administrative expenses, and digital infrastructure development Selling, General and Administrative Costs (as of September 30, 2024) | Expense Category | Q3 2024 (€ thousand) | Q3 2023 (€ thousand) | 9M 2024 (€ thousand) | 9M 2023 (€ thousand) | | :--- | :--- | :--- | :--- | :--- | | Selling Costs | 68,234 | 62,641 | 211,382 | 182,606 | | General and Administrative Costs | 66,695 | 55,991 | 190,404 | 163,462 | | Total Selling, General and Administrative Costs | 134,929 | 118,632 | 401,786 | 346,068 | - Selling costs are primarily related to sales personnel, marketing activities, and retail stores[201] - General and administrative costs are mainly for administrative management, personnel, and digital infrastructure development[204] 9. Research and Development Costs R&D expenses for the three and nine months ended September 30, 2024, include current expenses for F1 racing and product innovation, and amortization of capitalized development costs for product range and advanced technologies Research and Development Costs (as of September 30, 2024) | Expense Category | Q3 2024 (€ thousand) | Q3 2023 (€ thousand) | 9M 2024 (€ thousand) | 9M 2023 (€ thousand) | | :--- | :--- | :--- | :--- | :--- | | Current R&D Expenses | 128,343 | 128,593 | 400,494 | 380,701 | | Amortization of Capitalized Development Costs | 84,147 | 92,316 | 247,497 | 248,174 | | Total R&D Expenses | 212,490 | 220,909 | 647,991 | 628,875 | - Current R&D expenses are primarily for F1 racing activities and product portfolio innovation, especially for electric and other new technologies[205] - Amortization of capitalized development costs has increased in recent years, reflecting the company's investments in product range renewal and advanced technologies, including hybrid and electric powertrains[205] 10. Other Expenses and Other Income Net other expenses for the three and nine months ended September 30, 2024, include indirect taxes and provisions, while other income comprises rental income and gains on property disposals Other Expenses and Other Income (as of September 30, 2024) | Expense Category | Q3 2024 (€ thousand) | Q3 2023 (€ thousand) | 9M 2024 (€ thousand) | 9M 2023 (€ thousand) | | :--- | :--- | :--- | :--- | :--- | | Other Expenses | 8,361 | 6,955 | 25,318 | 21,605 | | Other Income | 2,836 | 3,094 | 13,410 | 6,668 | | Net Other (Income)/Expenses | 5,525 | 3,861 | 11,908 | 14,937 | - Other expenses primarily include indirect taxes, provisions, and other miscellaneous expenses[206] - Other income primarily includes rental income, gains on disposal of property, plant and equipment, and other miscellaneous income[206] 11. Financial Expenses and Financial Income Net financial expenses for the three and nine months ended September 30, 2024, relate to foreign exchange losses and debt interest, while financial income stems from foreign exchange gains and cash interest Financial Expenses and Financial Income (as of September 30, 2024) | Expense Category | Q3 2024 (€ thousand) | Q3 2023 (€ thousand) | 9M 2024 (€ thousand) | 9M 2023 (€ thousand) | | :--- | :--- | :--- | :--- | :--- | | Foreign Exchange Gains | 17,247 | 11,118 | 59,198 | 73,767 | | Interest Income | 8,516 | 12,288 | 24,011 | 20,834 | | Other Financial Income | 4,852 | 2,050 | 14,693 | 10,339 | | Financial Income | 30,615 | 25,456 | 97,902 | 104,940 | | Foreign Exchange Losses | 18,601 | 13,051 | 67,717 | 88,216 | | Interest Expense | 12,738 | 10,174 | 32,837 | 26,743 | | Other Financial Expenses | 163 | 147 | 508 | 454 | | Financial Expenses | 31,502 | 23,372 | 101,062 | 115,413 | | Net Financial Expenses/(Income) | 887 | (2,084) | 3,160 | 10,473 | - Financial expenses are primarily related to foreign exchange losses (including net hedging costs) and interest expenses on debt[208] - Financial income is primarily related to foreign exchange gains and interest income on cash and cash equivalents[209] 12. Income Tax Expense Income tax expense for the three and nine months ended September 30, 2024, benefited from the patent box tax regime, reducing the effective tax rate to 19.5% Income Tax Expense (as of September 30, 2024) | Expense Category | Q3 2024 (€ thousand) | Q3 2023 (€ thousand) | 9M 2024 (€ thousand) | 9M 2023 (€ thousand) | | :--- | :--- | :--- | :--- | :--- | | Current Taxes | 79,358 | 85,183 | 303,948 | 289,225 | | Deferred Tax Benefit | 11,460 | 3,111 | (25,183) | (21,528) | | Taxes for Prior Periods | (1) | 5,250 | (2,517) | 3,908 | | Total Income Tax Expense | 90,817 | 93,544 | 276,248 | 271,605 | - Income tax expense benefited from the application of the patent box tax regime[210] - The effective tax rate decreased from 22.0% to 19.5% (for the nine months)[211] - Changes in deferred tax benefits are primarily attributable to temporary differences related to intercompany profits on inventories[210] 13. Earnings Per Share Basic and diluted EPS increased for the three and nine months ended September 30, 2024, calculated by dividing profit attributable to the parent company by weighted average shares, considering dilution from equity incentive plans Basic Earnings Per Share (as of September 30, 2024) | Indicator | Q3 2024 (€ thousand) | Q3 2023 (€ thousand) | 9M 2024 (€ thousand) | 9M 2023 (€ thousand) | | :--- | :--- | :--- | :--- | :--- | | Profit Attributable to Parent Company Owners | 374,173 | 329,821 | 1,137,661 | 958,542 | | Weighted Average Number of Common Shares for Basic EPS (thousands) | 179,586 | 181,046 | 179,928 | 181,432 | | Basic EPS (€) | 2.08 | 1.82 | 6.32 | 5.28 | Diluted Earnings Per Share (as of September 30, 2024) | Indicator | Q3 2024 (€ thousand) | Q3 2023 (€ thousand) | 9M 2024 (€ thousand) | 9M 2023 (€ thousand) | | :--- | :--- | :--- | :--- | :--- | | Profit Attributable to Parent Company Owners | 374,173 | 329,821 | 1,137,661 | 958,542 | | Weighted Average Number of Common Shares for Diluted EPS (thousands) | 179,840 | 181,315 | 180,182 | 181,701 | | Diluted EPS (€) | 2.08 | 1.82 | 6.31 | 5.28 | - The weighted average number of shares for diluted EPS considers the dilutive effect of potential common shares from equity incentive plans[218] 14. Intangible Assets Intangible assets increased to €1.508 billion as of September 30, 2024, primarily due to €370 million in new investments for external acquisition and internally generated development costs for current and future models Summary of Intangible Assets Movement (as of September 30, 2024) | Indicator | Dec 31, 2023 Balance (€ thousand) | Additions (€ thousand) | Disposals (€ thousand) | Amortization (€ thousand) | Exchange Differences and Other (€ thousand) | Sep 30, 2024 Balance (€ thousand) | | :--- | :--- | :--- | :--- | :--- | :--- | :--- | | Intangible Assets | 1,419,699 | 370,411 | (10,654) | (271,581) | 481 | 1,508,356 | - New additions of €370 million were primarily for externally acquired and internally generated development costs to support the development of the Group's existing and future models[221] 15. Property, Plant and Equipment Property, plant, and equipment increased to €1.767 billion as of September 30, 2024, driven by €416 million in new investments for infrastructure projects like the new e-building, paint shop, and production lines Summary of Property, Plant and Equipment Movement (as of September 30, 2024) | Indicator | Dec 31, 2023 Balance (€ thousand) | Additions (€ thousand) | Disposals (€ thousand) | Depreciation (€ thousand) | Exchange Differences and Other (€ thousand) | Sep 30, 2024 Balance (€ thousand) | | :--- | :--- | :--- | :--- | :--- | :--- | :--- | | Property, Plant and Equipment | 1,575,200 | 416,305 | (1,568) | (220,832) | (1,668) | 1,767,437 | - New investments were primarily for infrastructure projects, including the new e-building and paint shop, as well as automotive and engine production lines[105] - Contractual commitments for the purchase of property, plant and equipment amounted to €306 million as of September 30, 2024, a significant increase from €115 million as of December 31, 2023[223] 16. Investments and Other Financial Assets Total investments and other financial assets were €75.312 million as of September 30, 2024, including equity-accounted investments in Ferrari Financial Services GmbH and FS China Limited, and other securities Investments and Other Financial Assets Composition (as of September 30, 2024) | Asset Category | Sep 30, 2024 (€ thousand) | Dec 31, 2023 (€ thousand) | | :--- | :--- | :--- | | Investments Accounted for Using the Equity Method | 60,843 | 55,200 | | Other Securities and Financial Assets | 14,469 | 12,471 | | Total Investments and Other Financial Assets | 75,312 | 67,671 | - Investments accounted for using the equity method primarily include Ferrari Financial Services GmbH, a collaboration with CA Auto Bank S.p.A., and FS China Limited, a joint venture in China[226] - Other securities and financial assets primarily include Series C F1 Group common stock of Liberty Media Corporation, measured at fair value[228] 17. Inventories Inventories increased to €1.031 billion as of September 30, 2024, comprising raw materials, work-in-progress, and finished goods, with impairment charges of €30.787 million recognized Inventories Composition (as of September 30, 2024) | Inventory Category | Sep 30, 2024 (€ thousand) | Dec 31, 2023 (€ thousand) | | :--- | :--- | :--- | | Raw Materials | 216,401 | 203,247 | | Work-in-Progress | 246,503 | 229,791 | | Finished Goods | 568,547 | 515,476 | | Total Inventories | 1,031,451 | 948,514 | - As of September 30, 2024, total inventories amounted to €1.031 billion, an increase from December 31, 2023[229] - Impairment charges on inventories recognized for the nine months ended September 30, 2024, amounted to €30,787 thousand[229] 18. Current Receivables and Other Current Assets Current receivables and other current assets totaled €2.006 billion as of September 30, 2024, primarily driven by finance receivables related to the growth of the US financial services portfolio Current Receivables and Other Current Assets Composition (as of September 30, 2024) | Asset Category | Sep 30, 2024 (€ thousand) | Dec 31, 2023 (€ thousand) | | :--- | :--- | :--- | | Receivables from Financing Activities | 1,531,018 | 1,451,158 | | Trade Receivables | 291,908 | 261,380 | | Current Tax Receivables | 16,319 | 11,616 | | Other Current Assets | 166,490 | 130,228 | | Total | 2,005,735 | 1,854,382 | - Receivables from financing activities are primarily related to the growth of the US financial services portfolio, typically collateralized by vehicle ownership or other security interests[232] 19. Current Financial Assets and Other Financial Liabilities Current financial assets and liabilities primarily consist of financial derivatives, including foreign currency derivatives and interest rate caps, used for cash flow hedging and foreign exchange risk management Current Financial Assets Composition (as of September 30, 2024) | Asset Category | Sep 30, 2024 (€ thousand) | Dec 31, 2023 (€ thousand) | | :--- | :--- | :--- | | Financial Derivatives | 44,232 | 55,562 | | Other Financial Assets | 8,348 | 5,568 | | Current Financial Assets | 52,580 | 61,130 | Fair Value of Financial Derivatives (as of September 30, 2024) | Derivative Category | Sep 30, 2024 Positive Fair Value (€ thousand) | Sep 30, 2024 Negative Fair Value (€ thousand) | Dec 31, 2023 Positive Fair Value (€ thousand) | Dec 31, 2023 Negative Fair Value (€ thousand) | | :--- | :--- | :--- | :--- | :--- | | Cash Flow Hedges: Foreign Currency Derivatives | 37,716 | (9,195) | 34,542 | (10,170) | | Cash Flow Hedges: Interest Rate Caps | 5,230 | — | 17,407 | — | | Other Foreign Currency Derivatives | 1,286 | (1,459) | 3,613 | (3,195) | | Total | 44,232 | (10,654) | 55,562 | (13,539) | - As of September 30, 2024, and December 31, 2023, almost all foreign currency derivatives mature within 12 months[235] 20. Equity As of September 30, 2024, issued share capital was €2.573 million, with treasury shares increasing due to buybacks, and other comprehensive income/loss affected by cash flow hedges and foreign currency translation - As of September 30, 2024, the company's issued share capital was €2,573 thousand, comprising 193,923,499 common shares and 63,349,112 special voting shares[236] - As of September 30, 2024, the company held 14,522,411 common shares and 16,239 special voting shares as treasury shares, representing 5.65% of the total issued share capital[236] - The increase in treasury shares primarily reflects share buybacks, partially offset by share grants under equity incentive plans[236] Other Comprehensive Income/(Loss) (as of September 30, 2024) | Indicator | Q3 2024 (€ thousand) | Q3 2023 (€ thousand) | 9M 2024 (€ thousand) | 9M 2023 (€ thousand) | | :--- | :--- | :--- | :--- | :--- | | Gains/(Losses) on Cash Flow Hedges | 16,931 | (48,714) | (9,190) | (43,525) | | Exchange Differences on Translation of Foreign Operations | (8,056) | 4,699 | (2,057) | 872 | | Related Tax Impact | (5,057) | 13,411 | 1,986 | 11,727 | | Total Other Comprehensive Income/(Loss) (Net of Tax) | 3,818 | (30,604) | (9,261) | (30,926) | 21. Share-Based Compensation Ferrari implements various share-based compensation plans, including PSUs and RSUs for executives and employees, with a new 2024-2026 plan granted and an employee stock ownership plan launched - The company implements various share-based compensation plans, including Performance Share Units (PSU) and Restricted Share Units (RSU), to reward executives and employees[240] - The 2021-2023 share-based compensation plan completed its vesting in Q1 2024, resulting in the grant of 70,888 common shares[241] - A new 2024-2026 share-based compensation plan granted approximately 40,885 PSUs and 15,401 RSUs, with vesting conditions based on TSR, EBITDA targets, and ESG objectives[245][246][248][249] - The company also launched an employee stock ownership plan, allowing each employee to receive shares worth up to approximately €2 thousand[254] Share-Based Compensation Expense (Nine Months Ended September 30, 2024) | Expense Category | 2024 (€ thousand) | 2023 (€ thousand) | | :--- | :--- | :--- | | Share-Based Incentive Plans and Other Equity Awards | 14,490 | 13,311 | | Commercial Agreements with Suppliers | 3,350 | 3,480 | | Employee Stock Ownership Plan | 322 | — | | Total Share-Based Compensation Expense | 18,162 | 16,791 | | Unrecognized Share-Based Compensation Expense | 25,606 | 10,080 | 22. Provisions Total provisions increased to €200 million as of September 30, 2024, including warranty, legal, and environmental risks, with environmental provisions released due to small volume manufacturer status in the US and favorable emissions credit market Provisions Composition (as of September 30, 2024) | Provision Category | Sep 30, 2024 (€ thousand) | Dec 31, 2023 (€ thousand) | | :--- | :--- | :--- | | Warranty and Recall Activities | 151,436 | 130,498 | | Legal Proceedings and Disputes | 11,641 | 7,480 | | Environmental and Other Risks | 37,198 | 49,298 | | Total Provisions | 200,275 | 187,276 | - The release of environmental and other risk provisions was primarily related to the company's designation as a small volume manufacturer in the US and more favorable market conditions for automotive emissions credits[261] 23. Debt Total debt increased to €3.096 billion as of September 30, 2024, comprising bonds, asset-backed financing, and bank borrowings, with a new €500 million bond issued due 2030 Debt Composition (as of September 30, 2024) | Debt Category | Sep 30, 2024 Current (€ thousand) | Sep 30, 2024 Non-Current (€ thousand) | Sep 30, 2024 Total (€ thousand) | Dec 31, 2023 Total (€ thousand) | | :--- | :--- | :--- | :--- | :--- | | Bonds and Notes | 454,896 | 950,000 | 1,404,896 | 903,673 | | Asset-Backed Financing (Securitization) | 590,038 | 662,424 | 1,252,462 | 1,166,473 | | Borrowings from Banks and Other Financial Institutions | 138,388 | 129,167 | 267,555 | 290,930 | | Lease Liabilities | 25,791 | 105,692 | 131,483 | 73,047 | | Other Debt | 39,384 | — | 39,384 | 43,063 | | Total Debt | 1,248,497 | 1,847,283 | 3,095,780 | 2,477,186 | - On May 21, 2024, the company issued new bonds due 2030 with a principal amount of €500 million, generating net proceeds of €496 million[269] - As of September 30, 2024, the company had €550 million in undrawn committed credit lines, with maturity dates ranging from 2025 to 2026[282] 24. Other Liabilities Other liabilities increased to €1.096 billion as of September 30, 2024, including advances, deferred revenue (primarily from F1 sponsorship prepayments), accrued expenses, and employee-related payables Other Liabilities Composition (as of September 30, 2024) | Liability Category | Sep 30, 2024 (€ thousand) | Dec 31, 2023 (€ thousand) | | :--- | :--- | :--- | | Advances and Deposits | 474,202 | 516,096 | | Deferred Revenue | 409,012 | 295,683 | | Accrued Expenses | 89,253 | 100,305 | | Employee Compensation Payable | 57,134 | 44,880 | | Social Security Payables | 26,060 | 25,857 | | Other | 40,405 | 40,146 | | Total Other Liabilities | 1,096,066 | 1,022,967 | - The increase in deferred revenue is primarily related to prepayments for F1 sponsorship agreements[285] - Advances and deposits include customer prepayments for Ferrari cars, mainly for Icona, limited edition, and special series models[285] 25. Trade Payables Trade payables decreased to €859 million as of September 30, 2024, with all amounts due within one year and their carrying value approximating fair value - As of September 30, 2024, trade payables amounted to €859 million, a decrease from €931 million as of December 31, 2023[286] - All trade payables are due within one year, and their carrying value is considered a reasonable approximation of their fair value[286] 26. Fair Value Measurement This section establishes a three-level fair value hierarchy under IFRS 13, presenting assets and liabilities measured at fair value, primarily derivative financial instruments valued using market parameters - Fair value measurement uses a three-level hierarchy: Level 1 for quoted prices in active markets, Level 2 for observable inputs, and Level 3 for unobservable inputs[287][288][289] Assets and Liabilities Measured at Recurring Fair Value (as of September 30, 2024) | Category | Level 1 (€ thousand) | Level 2 (€ thousand) | Level 3 (€ thousand) | Total (€ thousand) | | :--- | :--- | :--- | :--- | :--- | | Investments and Other Financial Assets | 13,980 | — | — | 13,980 | | Current Financial Assets | — | 44,232 | — | 44,232 | | Total Assets | 13,980 | 44,232 | — | 58,212 | | Other Financial Liabilities | — | 10,654 | — | 10,654 | | Total Liabilities | — | 10,654 | — | 10,654 | - The fair value of current financial assets and liabilities is primarily related to derivative financial instruments, determined using market parameters and recognized valuation techniques[293] - The carrying value of short-term receivables and payables is considered a reasonable approximation of their fair value[295] 27. Related Party Transactions This section discloses transactions with related parties, including Exor N.V. and its subsidiaries, and directors/key management, involving commercial activities like technical cooperation, engine sales, and sponsorships - Related parties include Exor N.V. and its subsidiaries (such as Stellantis Group and CNH Industrial N.V.), as well as directors and key management personnel[297] - Transactions are primarily commercial in nature, including technical cooperation with Stellantis Group, engine sales (the contract with Maserati expired in December 2023), leasing and sponsorship with Iveco Group, and car sales to directors and key management[298][301][302] Income Statement Impact of Related Party Transactions (Nine Months Ended September 30, 2024) | Related Party Category | Net Revenues (€ thousand) | Costs (€ thousand) | Net Financial Expenses (€ thousand) | | :--- | :--- | :--- | :--- | | Stellantis Group Companies | 11,863 | 3,318 | — | | Exor Group Companies (excluding Stellantis Group) | 250 | 1,354 | 16 | | Other Related Parties | 3,615 | 10,378 | 11 | | Total Related Party Transactions | 15,728 | 15,050 | 27 | Balance Sheet Impact of Related Party Transactions (as of September 30, 2024) | Related Party Category | Trade Receivables (€ thousand) | Trade Payables (€ thousand) | Other Current Assets (€ thousand) | Other Liabilities (€ thousand) | | :--- | :--- | :--- | :--- | :--- | | Stellantis Group Companies | 1,899 | 4,572 | 103 | 669 | | Exor Group Companies (excluding Stellantis Group) | 459 | 329 | 1,124 | 1,159 | | Other Related Parties | 1,382 | 1,882 | 446 | 460 | | Total Related Party Transactions | 3,740 | 6,783 | 1,673 | 2,288 | 28. Entity-Wide Disclosures This section provides net revenue analysis by customer geography, employee numbers, and depreciation and amortization data, with Americas being the largest revenue contributor Net Revenues by Customer Geography (as of September 30, 2024) | Region | Q3 2024 (€ thousand) | Q3 2023 (€ thousand) | 9M 2024 (€ thousand) | 9M 2023 (€ thousand) | | :--- | :--- | :--- | :--- | :--- | | Italy | 127,202 | 125,997 | 354,417 | 336,293 | | Rest of Europe, Middle East and Africa | 620,543 | 580,007 | 1,944,339 | 1,778,310 | | Americas | 569,840 | 490,144 | 1,615,247 | 1,322,968 | | Greater China (Mainland China, Hong Kong and Taiwan) | 126,044 | 157,925 | 406,230 | 436,549 | | Rest of Asia Pacific | 200,810 | 189,959 | 620,894 | 572,626 | | Total Net Revenues | 1,644,439 | 1,544,032 | 4,941,127 | 4,446,746 | - For the nine months ended September 30, 2024, the average number of employees was 5,290, an increase from the prior year period[311] - For the nine months ended September 30, 2024, depreciation was €221 million and amortization was €272 million[311][312] 29. Cash and Cash Equivalents and Notes to the Interim Consolidated Statement of Cash Flows Cash and cash equivalents totaled €1.529 billion as of September 30, 2024, primarily in Euro, with Chinese c