Ferrari(RACE)2024-11-05 17:28Financial Data and Key Metrics - Revenues for Q3 2024 reached €1.6 billion, up 7% year-over-year [9] - EBIT stood at approximately €470 million, with a margin of 28.4%, driven by a strong product mix and personalization trends [9] - Net profit was €375 million, and industrial free cash flow generation exceeded €360 million [9] - Adjusted EBIT increased by 10%, and adjusted EBITDA rose by 7% with a margin of 38.8% [25] - Industrial free cash flow generation reached €364 million, supported by profitability and working capital improvements [33] Business Line Performance - The Purosangue, Roma Spider, and 296 GTS were the main drivers of deliveries in Q3 [26] - The hybrid share of shipments reached 55%, primarily driven by the 296 GTS [27] - Personalizations accounted for approximately 20% of total revenues from cars and spare parts, significantly supported by the Purosangue and Daytona SP3 [28] - Sponsorship and brand revenues increased, largely due to new sponsorships related to racing activities, including the HP title sponsorship [29] Market Performance - The Americas region supported a positive country mix, contributing to the strong financial results [30] - Shipments in China decreased, but the order book remains strong, with visibility extending into 2026 [65][66] - The UK market showed softer residual values, while other regions remained stable [51][52] Strategic Direction and Industry Competition - The company is advancing its electrification journey, with the F80 supercar representing a key milestone in internalizing core components like electric motors and high-voltage battery modules [15][94] - The e-building facility enhances technological flexibility, allowing the company to offer a continuum of ICE, hybrid, and future electric vehicles [94][95] - The company is committed to carbon neutrality by 2030, with a 60% reduction in Scope 1 and Scope 2 CO2 emissions achieved by switching off the Trigeneration plant in Maranello [23] Management Commentary on Operating Environment and Future Outlook - The company is monitoring the macro environment carefully but remains confident in its strategy and client base [24] - The order book is robust, with strong demand for the Dodici Cilindri family and the F80 supercar, providing visibility well into 2026 [10][34] - The company prioritizes the quality of revenues over quantity, focusing on maintaining high margins and profitability [47] Other Important Information - The F80 supercar, with a limited production run of 799 units, has already been fully allocated to collectors and represents the pinnacle of Ferrari's technological and performance capabilities [12][13] - The company successfully transitioned to a new ERP system, which is expected to improve operational efficiency and reduce SG&A costs over time [75][106] Q&A Session Summary Question: Timeline for F80 deliveries and mix decline in Q3 - F80 deliveries will begin in Q4 2025 and continue for 2-3 years, with 799 units planned [37] - The sequential decline in mix gains was due to high personalization and mix impacts in the prior year's Q3 [38] Question: Positioning of upcoming high-end products - The F80 is positioned as a technological and performance milestone, bridging Ferrari's ICE and hybrid offerings [41][42] - The company is keeping details of the EV hypercar under wraps to maintain exclusivity [44] Question: Volume growth vs. mix and scarcity - The company prioritizes revenue quality over volume growth, focusing on maintaining high margins and profitability [46][47] Question: Q4 guidance and residual value trends - Q4 EBIT is expected to be around €400 million, with higher OpEx related to racing and lifestyle activities [50][54] - Residual value trends vary by region, with personalization levels impacting resale values [51][52] Question: Industrial free cash flow and SG&A outlook - Industrial free cash flow in Q4 is expected to decline year-over-year due to higher CapEx and taxes [57][58] - SG&A expenses are expected to remain elevated due to digital infrastructure investments [60] Question: F80 advances and personalization rates - Advances for the F80 will be collected, but the timing of accounting was not specified [63] - Personalization rates in Q3 were 20%, with an average price increase compared to previous years [63] Question: Shipments and China market dynamics - Shipments in Q4 are expected to be higher than last year but lower than Q3 2024 [102] - The China market remains stable, with the company maintaining a deliberate strategy to keep shipments below 10% of total volumes [65][101] Question: F1 provision and ERP benefits - The F1 provision release had a €10 million impact [107] - The new ERP system is expected to improve operational efficiency and reduce SG&A costs over time [106] Question: Potential tariffs and R&D accounting - The impact of potential U.S. tariffs on the order book is uncertain, but the company may reallocate products to other regions [109] - R&D capitalization rates are expected to continue increasing due to product development expenditures [110] Closing Remarks - The company expressed confidence in its future plans, supported by strong Q3 results and progress in its electrification journey [113]