Ferrari: Robust mix sustained to strong start to the year

Net revenues of Euro 1,585 million, up 10.9% versus prior year, with total shipments of 3,560 units substantially flat versus Q1 2023

“The start of the year was very positive: revenues and profits recorded double-digit growth with stable deliveries. This was achieved through an even stronger product and country mix as well as a greater contribution from customizations. Our value over volume strategy continues to be successful,” said Benedetto Vigna, CEO of Ferrari. “and within this same strategy, the execution of our business plan progresses on schedule, with the enrichment of our product range thanks to the recent launch of the 12Cilindri and 12Cilindri Spider”.

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Ferrari NV (NYSE/EXM: RACE) (“Ferrari” or the “Company”) today announces its consolidated preliminary results 2 ) for the first quarter ended March 31, 2024.

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Shipments totaled 3,560 units in Q1 2024, almost unchanged versus the prior year. Quarterly shipments reflected the deliberate geographic allocations, thus in the quarter EMEA (4) increased by 39 units, Americas (4) was up 35 units, Mainland China, Hong Kong and Taiwan decreased by 79 units and Rest of APAC (4) was substantially flat.

Deliveries in the quarter were driven by the 296 family, the Purosangue and the Roma Spider, which was in ramp up phase. The allocations of the Daytona SP3 increased in the quarter, in line with plans. The 812 GTS and the SF90 Stradale were approaching the end of lifecycle, while the Portofino M phased out.

The product portfolio in the quarter included nine internal combustion engine (ICE) models and four hybrid engine models, which represented 54% and 46% of total shipments, respectively.

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Net revenues for Q1 2024 were Euro 1,585 million, up 10.9% or 12.8% at constant currency ) .

Revenues from Cars and spare parts (7) were Euro 1,382 million (up 11.4% or 13.5% at constant currency ) ), thanks to a richer product and country mix, as well as the increased contribution from customizations.

Sponsorship, commercial and brand (8) revenues reached Euro 145 million, up 11.6% or 12.0% at constant currency ) attributable to new sponsorships, partially offset by lower Formula 1 ranking in 2023 vs. 2022.

Other (9) revenues were flat, with higher revenues from financial services activities offset by the decreased contribution from the Maserati contract which expired in 2023.

Currency – including translation and transaction impacts as well as foreign currency hedges – had a negative net impact of Euro 26 million, mostly related to the Chinese Yuan, Japanese Yen and US Dollar.

Adjusted EBITDA (1) and Adjusted EBIT (1)

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Q1 2024 Adjusted EBITDA (1) reached Euro 605 million, up 12.7% versus the prior year and with an Adjusted EBITDA (1) margin of 38.2%.

Q1 2024 Adjusted EBIT (1) was Euro 442 million, increased 14.8% versus the prior year and with an Adjusted EBIT (1) margin of 27.9%.

Volume was slightly negative (Euro 8 million), mainly driven by lower range models deliveries.

The Mix / price variance performance was very strong and positive (Euro 123 million), mainly reflecting the enrichment of the product mix, sustained by the Daytona SP3, the increased contribution from customizations and the positive country mix driven by Americas.

Industrial costs / research and development expenses increased (Euro 29 million), mainly due to higher innovation expenses as well as depreciation and amortization.

SG&A also grew (Euro 12 million) mainly reflecting the continuous development of the Company’s digital infrastructure and organization.

Other changes were positive (Euro 6 million), mainly driven by new sponsorships and a release of prior year car environmental provisions in the United States of America, partially offset by lower Formula 1 ranking in 2023 vs. 2022.

Financial charges, net for the quarter totaled Euro 2 million, nearly halved versus the prior year, primarily driven by increased interest income from the Group’s cash balances.

The tax rate in the quarter was 20%, mainly reflecting the estimate of the benefit attributable to the Patent Box 10 ) and tax incentives for eligible research and development costs and investments.

As a result, the Adjusted Net profit (1) for the quarter was Euro 352 million, up 18.6% versus the prior year, and the Adjusted diluted earnings per share (1) for the quarter reached Euro 1.95, compared to Euro 1.62 in Q1 2023.

Industrial free cash flow (1) for the quarter was strong at Euro 321 million, driven by the increased Adjusted EBITDA (1) , partially offset by capital expenditures 11 ) of Euro 195 million and the increase in working capital, provisions and other of Euro 71 million.

As of March 31, 2024 the Company was in a Net Industrial Cash (1) position of Euro 38 million for the first time, compared to Net Industrial Debt of Euro 99 million as of December 31, 2023, also reflecting share repurchases 12 ) of Euro 136 million. As of March 31, 2024, total available liquidity was Euro 1,966 million (Euro 1,722 million as of December 31, 2023), including undrawn committed credit lines of Euro 600 million.

2024 guidance confirmed, based on the following assumptions for the year:

  • Positive product and country mix, along with strong customizations
  • Racing activities impacted by lower Formula 1 ranking in 2023 despite higher number of races in the 2024 calendar
  • Lifestyle activities expected to increase top line contribution while investing to accelerate development
  • Cost inflation to persist
  • Continuous brand investments
  • Robust Industrial free cash flow generation, partially offset by increased capital expenditures and higher tax payment

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Q1 2024 highlights:

Ferrari announced that Lewis Hamilton will be joining Scuderia Ferrari in 2025, on a multi-year contract.

Ferrari and SK On, a leading global electric vehicle battery manufacturer, signed a Memorandum of Understandings to renew the on-going technological collaboration and share valuable insights to continue to lead innovation in cell technology.

Subsequent Events:

  • On April 8, 2024 the E-Cells Lab, a research center for electrochemistry within the University of Bologna, was inaugurated. The electrochemical research laboratory promoted by Ferrari in collaboration with the University of Bologna and the leading electronics company NXP, aims to build knowledge of the materials, and the chemical and physical properties, of lithium cells.
  • On April 11, 2024 the Roma Spider, the Ferrari’s elegant 2+ mid-engined open-top car with a retractable soft top, won the Red Dot: Best of the Best in the Product Design category. Ferrari also won two Red Dot Awards for the special limited-edition SF90 XX Stradale and the futuristic One-Off KC23, respectively.
  • At the Annual General Meeting held on April 17, 2024, the Shareholders of the Company approved, among others, a dividend in cash of Euro 2,443 per outstanding common share, totaling approximately Euro 440 million, as recommended by the Company’s Board of Directors on February 22, 2024. The dividend was then paid on May 3, 2024.
  • On April 24, 2024 Ferrari announced to have signed a multiyear partnership agreement with HP Inc., through which its brand will appear on racing properties of Scuderia Ferrari.
  • On May, 3 2024 Ferrari unveiled the 12Cilindri and the 12Cilindri Spider, our new two-seater berlinettas powered by a front-mid, naturally-aspirated V12. These models are the perfect embodiment of the Prancing Horse DNA, offering incomparable performance and handling with sophisticated design.
  • Under the fourth tranche of the new multi-year common share repurchase program announced on June 30, 2022, from March 31, 2024 to May 3, 2024 the Company purchased 101,349 common shares for a total consideration of Euro 39.5 million. At May 3, 2024 the Company held in treasury an aggregate of 13,885,346 common shares equal to 5.40% of the total issued share capital including the common shares and the special voting shares, net of shares assigned under the Company’s equity incentive plan.

1 Refer to specific paragraph on non-GAAP financial measures. The term EBIT is used as a synonym for operating profit. There were no adjustments impacting EBITDA, EBITDA margin, EBIT, EBIT margin, Net profit, Basic EPS and Diluted EPS in the periods presented.
2  These results have been prepared in accordance with International Financial Reporting Standards (IFRS) as issued by the International Accounting Standards Board and IFRS as endorsed by the European Union
3  Excluding strictly limited racing cars (such as the XX Program and the 499P Modificata), one-off and pre-owned cars
4  EMEA includes: Italy, UK, Germany, Switzerland, France, Middle East (includes the United Arab Emirates, Saudi Arabia, Bahrain, Lebanon, Qatar, Oman and Kuwait), Africa and the other European markets not separately identified; Americas includes: United States of America, Canada, Mexico, the Caribbean and Central and South America; Rest of APAC mainly includes: Japan, Australia, Singapore, Indonesia, South Korea, Thailand, India and Malaysia
5  Of which 850 units in Q1 2024 (+20 units vs Q1 2023) in the United States of America
6  Of which 243 units in Q1 2024 (-80 units vs Q1 2023) in Mainland China
7  Includes net revenues generated from shipments of our cars, any personalization generated on cars, as well as sales of spare parts
8  Includes net revenues earned by our racing teams (mainly in the Formula 1 World Championship and the World Endurance Championship) through sponsorship agreements, our share of the Formula 1 World Championship commercial revenues, and net revenues generated through the Ferrari brand, including fashion collection, merchandising, licensing and royalty income
9  Primarily relates to financial services activities, management of the Mugello racetrack and other sports-related activities, as well as net revenues generated from the rental of engines to other Formula 1 racing teams and from the sale of engines to Maserati. Starting from 2024, residual net revenues generated from engines are presented within other net revenues as a result of the expiration of the contract with Maserati in December 2023. As a result, net revenues generated from engines of €33 million for the three months ended March 31, 2023, that were previously presented as “Engines” net revenues, have been presented within “Other” net revenues to conform to the current presentation.
10  Patent Box regime as introduced by Article 1, par. 37-45 of Law No. 190 of December 23, 2014, as amended and supplemented from time to time, then replaced by Article 6 Decree-Law No. 146 of October 21, 2021, converted with amendments into Law No. 215 of December 17, 2021, as subsequently amended by Law No. 234 of December 30, 2021.
11 Capital expenditures excluding right-of-use assets recognized during the period in accordance with IFRS 16 – Leases
12  Including repurchases for an amount of approx. Euro 14 million in relation to the Sell to Cover practice under the equity incentive plans
13  Calculated using the weighted average diluted number of common shares as of December 31, 2023 (181,511 thousand)

SOURCE: Ferrari

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