This conference call transcript was computer generated and almost certianly contains errors. This transcript is provided for information purposes only.EarningsCall, LLC makes no representation about the accuracy of the aforementioned transcript, and you are cautioned not to place undue reliance on the information provided by the transcript.
Operator
Ladies and gentlemen, thank you for standing by and welcome to the Ferrari third quarter 2020 results conference call. At this time, all participants are in the listen only mode. After the presentation, there will be a question and answer session. To ask a question during this session, you will need to press star and one on your telephone. I must advise you that this conference is being recorded today, Tuesday the 3rd of November 2020. And now I would like to hand the conference over to your speaker today, Nicoletta Russo. Please go ahead.
Nicoletta Russo
Thank you, Martin, and welcome to everyone who's joining us. Today's call will be offered by the Group CEO, Louis Camilleri, and Group CFO, Antonio Piccapicon. All relevant materials are available in the investor section of the Ferrari corporate website, and at the end of the presentation, we will be available to answer your questions. Before we begin, let me remind you that any forward-looking statements we might make during today's call are subject to the risks and uncertainties mentioned in the safe harbor statement included on page two of today's presentation, and the call will be governed by this language. With that said, I'd like to turn the call over to Louis.
Martin
My career path is not conventional. You know, being a singer-songwriter, most people don't think that's going to be a steady job. So I found myself in a lot of difficult situations, and that's when I started thinking I really have to learn how to run a business, not just play good music. One of the most useful tools about WGU is you're not just a tuition-paying student. It's me participating in something that's bigger than me. And I think that's the beauty of good marketing, is creating something that's authentically you and allowing people to plug into it.
Monza
Thank you, Nicoletta, and welcome everyone. We're pleased that you have joined us. All in all, I would characterize our third quarter results as robust, particularly in terms of our income performance. As Antonio will describe shortly, our volume and top line performance was affected by the simultaneous impact of the end of the life cycle of certain models, and the ramp up of the new ones, particularly the SF90 Stradale and the Ferrari Roma on our production planning. Hence, deliveries were affected by supply and certainly not demand. Absent any potential dislocation caused by the resurgence of the COVID-19 pandemic, We're now confident that we will meet the top end of our previously released guidance for the full year across all measures. This implies a very strong fourth quarter, reaching record quarterly levels in terms of absolute volumes, revenues, and EBITDA. Solid proof that we're now running on all cylinders and have overcome the embryonic issues that we and our suppliers faced with the industrialization phase of the SF90 Stradale. The key dynamics of our business model remain exceedingly strong, and the momentum I referred to back in August remains in place with a record order book, robust residuals, and a low level of cancellations. Indeed, orders received this October exceeded the average pre-COVID first quarter monthly intake by some 30%. And we're essentially in line with the average that we received in the fourth quarter of last year, which witnessed several new models. This is testament to the success of the digital activities that were implemented. And much more recently, the very significant number of individual test drives that garnered record request and attendance levels. Clearly a key watch out is the effect of any further lockdowns. For example, today in the United Kingdom, all showrooms have been closed and therefore Some 81% of our dealers in Europe have now closed their showrooms, and that reflects 74% on a weighted basis. We also are somewhat concerned that the test drives and dynamic activities that we had planned may be somewhat curtailed or even aborted. The quarter witnessed the launch of the latest addition to our family of models, the Portofino M, M standing for Modificata, with a redesigned powertrain, a brand new eight-speed gearbox, and numerous other design and technical upgrades. In keeping with the times, it is the first ever Ferrari to be previewed exclusively through vivid digital activities that have triggered very positive feedbacks to date. We are pleased with the reception that the Ferrari Roma continues to generate across the world. Of particularly note today is the very strong orders emanating from China, Japan, and Korea. The fact that it is attracting a higher percentage of new to Ferrari customers than the Ferrari Portofino and the younger cohort augurs well for the future. China in particular is exciting. Orders are currently running at 50% above the Portofino in the equivalent time span since their respective launch. We're also encouraged by the demographics of the SF90 Stradale, as in terms of its current order book, the new to Ferrari customers are the youngest across all the models that we offer. Whether or not this is related to the fact that it's our first range hybrid model remains to be determined, but it is certainly an exciting prospect. This latter point, hybridization, allows me to segue to a matter that I know is of considerable interest to everyone on this call, namely carbon neutrality. As I have alluded to in recent calls in answer to direct questions on the matter, we've undertaken a significant company-wide exercise to determine our total carbon footprint. While many focus on carbon emissions alone, we firmly believe that this is only part of the equation, especially with regard to our products that on average only clock up very low annual mileage.
Nicoletta
Earn your degree faster at Purdue University Global. With over 175 online programs, there's one for you. Start today with a three-week risk-free trial. Apply now at purdueglobal.edu.
spk03
Customize and save with Liberty Mutual.
Monza
We have studied the entire carbon footprint from cradle to grave, or more accurately, from the mine to the effective end of use, across our entire activities, including Formula One. This allows us to focus on the critical elements that compose our footprint, which in all honesty have led to some surprising findings, not least with regard to the impact of specialty metals and battery components on our overall footprint. It is my sincere hope that prior to the end of next year, we will be in a position to publish a third party certified Ferrari carbon footprint and a clear plan to meet our ambitions to ultimately become carbon neutral through actions taken directly and indirectly. Although it represents a very small part of our footprint, this plan will also include Formula One as we work with all the interested parties on the power unit of the future currently slated to come into vigor in 2026. Before I hand over the call to Antonio, I need to correct a statement I made just in case. 81% of our dealers are open, not shut. Sorry about that. So now I'll hand it over to Antonio, who will review our quarterly results and guidance for the full year.
Antonio
Thank you, Louis. And good morning or afternoon to everyone who is joining us today. Starting on page four, the third quarter of 2020 witnessed the resilience of our core business, leading to a very solid set of results across all metrics. which compares well with peers in the luxury domain. The core business, excluding Formula One, brand-related activities, and engines for Maserati, performed in line with our plans, and our margins were enhanced by the full deployment of the cost containment measures adopted since last March. We also benefited from the improved forecast of F1 revenues received from the commercial right holder, which nevertheless remained significantly down compared to last year. Our shipments in the third quarter were 2,313 units, 6.5% less than into 2019. Group net revenues were 888 million euro, down 3% compared to prior year, outstripping our shipment variance, thanks to the deliveries of the Ferrari Monzas SP1 and SP2, which enriched our mix. EBITDA, and please note that in this quarter all adjusting metrics coincide with the reported ones, since there were no unusual items, came in at €330 million, up 6.4%, with a robust margin of 37.2%. EBIT was €222 million, essentially in line with prior year, embedding higher DNA. Net profit was €171 million, slightly increased versus Q3 2019, and resulting in a diluted EPS of €0.92 compared to €0.90 of prior year. industrial free cash flow for the quarter was back into positive territory, totalling 77 million euro. Moving to page five, you can see the details of the third quarter 2020 shipments, which decreased 6.5%, driven by the cadence of the company's full year production plan, with some models gradually phase out and the new ones ramping up. I remind you that our full year production plan projects a recovery of 500 units out of the 2000 lost following the seven week production suspension due to the COVID-19 pandemic. This obviously assumes that our manufacturing plans will remain unaffected by measures that may be taken to combat the pandemic. Going back to the deliveries of the quarter, the V8 models were down 12.8%, and on the other end, the V12 were up 15.4%. The F8 Spyder and the A12 GTS are in the ramp-up phase, reaching mainly EMEA, gradually offsetting the 488 Pista family and the Ferrari Portofino that arrived at the end of their life cycle. The Ferrari Monza's continued to be delivered as originally scheduled. As a consequence, quarterly shipments were affected by the deliberate geographic allocation driven by the phase-in pace of individual models, resulting in EMEA increase by 12.7%, America's decline by 34.7%, mainland China, Hong Kong, and Taiwan posted a decrease of 25.2%, also considering that the third quarter of 2019 was still somewhat flattered by the anticipation of our sales before the introduction of the new emission regulations, while deliveries to rest of APAC were in line with prior year. I remind you that the SF90 Stradale and the Ferrari Roma will start the deliveries in Q4 2020. Actually, they started deliveries in Q4. Finally, within the end of the year, we will unveil an additional new model, the 8 out of the 15 planned over our planned period 2018-2022. Turning to page 6, you can see here displayed the walk of our group net revenues for the third quarter of 2020.
Louis
Prebiotics feed your gut anytime, anywhere. Nourish your gut with Benefiber.
Antonio
Revenues from cars and spare parts were up 2.4% at constant currency. Such growth, in spite of the volume decline, reflects the positive in mixed price, mainly thanks to the Ferrari Monza SP1 and SP2. This was partially offset by the phase-out of the 488 Pista family, which in turn implies a lower contribution from personalizations from a volume perspective. Also, the personalization rate on cars and spare parts revenues was slightly lower than last year. Engines revenues were substantially in line with prior year. Revenues from sponsorship, commercial, and brand were down 43 million euros, significantly impacted by the COVID-19 pandemic, resulting in a lower number of Formula One races and corresponding lower revenue accrual, as well as reduced in-store traffic and museums visitors. For the sake of clarity, our revenue accrual for F1 sponsorship and commercial was based on full year estimates updated in the third quarter and improved compared to the first half of 2020. Currency, including translation and transaction impacts, as well as foreign currency edges, had a minor positive contribution of 2 million euro, mainly the US dollar. Moving to page 7, let me review the change in our EBIT, which was 222 million euro, essentially in line with prior year, minus 2.1% or minus 4.1% at custom currency. with EBIT margin at 25%. The negative variance at constant currency remains mostly the COVID-19 impact on Formula One, partially upset by the strength of the core business. More precisely, volume drove a negative variance of 19 million euro due to reduced deliveries. Mixed price variance was positive for 46 million euro. thanks to the Ferrari Mondo SP1 and SP2, partially offset by the lower contribution from personalization programs due to the decrease of shipments and the gradual phase-out of the 488 Vista family. Industrial costs, research and development costs decreased €5 million due to the spending cadence, particularly in Formula One racing activities for the current season, partially compensated by higher depreciation and amortization as the production lines for the new models started being operated. SG&A decreased €18 million, reflecting fewer marketing initiatives as well as cost containment measures. Other was down €60 million due to the already mentioned COVID-19 impact on the F1 racing calendar, as well as lower traffic for brand-related activities. The total net positive impact of currency was €5 million year-on-year. Turning to page 8, industrial free cash flow for the quarter was €77 million positive. The improvement in the quarter was essentially driven by the EBITDA growth, partially offset by the continuous investment to fool our long-term product development with capital expenditures of 158 million euro, and the adverse working capital impact due primarily to higher raw material and component inventories, as well as the reversal of the Ferrari Monza SP1 and SP2 advances already collected in 2019. Net industrial debt of the end of September was 715 million euro, compared to 776 million euro as of June end. At the end of the third quarter 2020, total available liquidity, including unknown committed credit lines for several hundred million euro, was 1,879,000,000 euro, which compares with approximately 1,250,000,000 euro as at last end of December. Moving to page nine. On the back of the third quarter results, we are revising our guidance to the top end of the range communicated in August, assuming trading conditions remain unaffected by further restrictions or impacts from the COVID-19 pandemic that may halt the pace of production and deliveries. Net revenues greater than 3.4 billion euro. to reflect a drop in deliveries of nearly 9% compared to 2019, the positively revised assumption on the F1 Championship, the pace of restart of our blend activities, and demand for engines from Maserati. Adjusted the BDA at approximately €1,125,000,000, with percentage margin of 32.5%, Adjusted EBIT close to 700 million euro, targeting an EBIT margin of 20%, which reflects the higher DNA following the capex increase of most recent years. Adjusted diluted EPS of circa 2.8 euro per share, assuming a 20% tax rate, substantial in line with 2019. Industrial free cash flow in the region of 150 million euro, with capital expenditures of around 750 million euro.
Pista
It goes without saying that we are not immune to what happens around us.
Antonio
and you may be assured that our top priority remains to protect our people. However, barring any restrictions that would inhibit our ability to keep operating diligently as we are currently doing, we believe we are well positioned to reach the targets that I've just outlined. Targets that we consider remarkable in such a disruptive year. With that said, I turn the call over to Nicoletta.
Nicoletta Russo
Thank you, Antonio.
Operator
martin we are now ready for the q a session thank you thank you ladies and gentlemen if you wish to ask a question on this call please press star and one and wait for a name to be announced if you wish to cancel that request please press the hash key so once again it's star and one if you wish to ask a question and your first question today comes from the line of john murphy of bank of america please go ahead your line is now open
John
Good afternoon, everybody. I just want to ask a first question on product cadence because it doesn't seem like there's been any beat skipped here whatsoever on product launches. So I'm just curious if you can confirm that and if you can just remind us how the order book builds around new product launches because it seems like that's very, very important in the book building or the waitlist building.
Monza
Sorry, John. I'm not sure I understood your question. Product cadence relative to new models?
John
Yes. Given the disruption around COVID, has anything changed or been delayed on your product cadence or your product launch cadence?
Monza
In terms of actual launches, i.e. presentations, it hasn't really changed. As we said back in August, the COVID did disrupt our supply chain and the industrialization phase, particularly the year of the SF90. So that's been somewhat delayed relative to beginning of the year plans. As you know, for COVID, we've also said on at least two occasions, that we've been prudent in terms of our investments. And certain models going forward have been delayed by three months and others by nine months. So nothing really very material. There have been delays, John. I don't know if that answers your question.
John
That does. And the correlation with those launches and the waitlist appears to be relatively high. So I'm just curious. It sounds like you're getting record orders for the waitlist, but I'm just curious if that changed anything with the waitlist, where it's either shrunk or maybe grown as people are willing to wait longer.
Monza
Well, the waitlist has obviously increased, and that's something that we will need to address. particularly on the models where we have rather ambitious plans in terms of attracting new to Ferrari customers. And I think those are somewhat vulnerable to very long waiting lists as opposed to normal customers who are acclimatized to a longer waiting list. but essentially i think we enter 21 with a very strong order book and as antonio just mentioned barring any dislocations because of the pandemic we should have a pretty good year obviously of a weak base but nevertheless a pretty strong year okay that's helpful and then the second question just around the ebitda margins it's hard not to get
John
excited when we see 37.2 percent. I think that's one of the highest, if not the highest, that you guys have ever printed, at least since we have public data. I'm just curious, if you think about the puts and takes in the quarter and as we go forward, what would actually potentially not be repeatable, either on cost containment or mix, or is this something we could think about as a potential for the future on EBITDA margins?
Monza
Well, it's driven by a very strong performance in the core business, the car business, where the EBITDA margin, I'm looking at Antonio, but I believe it was above 45% in terms of the core business. So that's driven a lot by Mix and particularly by the Monza. As you know, in the fourth quarter, we will face a comparison where we had Monza's last year So that huge uplift won't be there. But it will still nevertheless be pretty strong because of the advent of the SF90, the full ramp up of the A12 GTS that is performing strongly. So we feel very good about the margin. I think from the Maserati perspective, As that becomes lower, that obviously has a favorable impact on our margin, because you can imagine that the margins on the Maserati engines are quite low. Brand margins are high. They're having a very difficult year for obvious circumstances, and hopefully next year we'll be able to really start implementing the plan that we had announced, I guess, this time last year.
John
Okay, that's pretty helpful. And then just lastly, when you talk about mix, you keep highlighting the positive mix from the Monza's, which I certainly appreciate. But when you look at the V12 versus the V8 mix with V12s up 15.4%, V8s down 12.8% on unit shipments, isn't that a significant driver of a positive mix as well? And I'm just curious why you haven't sort of stated that as part of the positive mix.
Monza
Well, because for simple reason, the Portofino and the Pista are ending their life cycles and they're being replaced by the Roma and the Portofino M. So those will be coming up and being part of our volumes. So that's why I didn't mention it. Okay. But in the quarter itself, I mean, that was, that was, it was definitely in the quarter. Absolutely. But I thought you were looking more in terms of the future.
John
Yeah, no, I'm just trying to understand because it seems like that simple, not simple, but I mean that straightforward comparison of V12 versus V8 in the quarter was very, very strong. I mean, obviously includes the Mazdas to some degree, but it wasn't highlighted as part of the significant driver of positive mix in the quarter as explicitly as the Mazdas. So I was just trying to understand if I was missing something there.
Monza
Well, because the margin on the Pista and Pista Spider in particular is pretty attractive. I think that's what you're missing in your equation.
John
Gotcha. Okay.
Monza
All right, great. Thank you very much. I appreciate it.
Operator
Thank you. Thank you. Your next question today comes from the line of Adam Jonas of Morgan Stanley. Please go ahead. Your line is now open.
Adam Jonas
Hey, Louis, I got a bit of a longer-dated strategic question for you on EVs. If I look at your COGS, cost of goods sold on a per unit basis for Ferrari, we get close to 150,000 euros per unit. I'm thinking roughly half of that could be related to the power unit, the engine, transmission, fuel delivery, exhaust, and all the supporting mechatronics and electronics. I'm thinking if this is transitioned hypothetically to 100% BEV power unit, including the battery, e-motors, charger inverters, etc., that this would be substantially less complex, less exquisite, and lower variable cost per unit compared to today's ICE powertrain. Could this create a a very large cost efficiency opportunity for Ferrari while still providing your customers with the highest performance experience that they would expect from a Ferrari. Please tell me, Louis, where I may be wrong with this logic.
Monza
I understand where you're going. I don't necessarily agree with you. I think that the way you set it less complex and less exquisite is where you potentially derail because, in fact, to achieve the objectives you just mentioned, which is to retain the Ferrari DNA, the EV will actually be significantly more complex than you are assuming. And that's clearly something that we're working on. But just to have a standard EV and put the Cavalino on it is not what we're all about. So the day we come out with an EV or what we call a BEV, it will be a pretty complex machine. And furthermore, there are a number of elements that we will have to put in which are very costly. If I look at the SF90 Stradale and the cost aspects of the electric aspects of the hybridization and the electric axles and the front axle, those are pretty expensive considerations. Having said that, over the longer term, and that's what we're talking about, you would hope that there would be cost savings. I'm not sure they would be as extravagant as you imply, but there should be cost savings longer term as battery technologies improve as well. However, my own sense is that, you know, to sort of say 100% electric that's pushing things. I really don't see Ferrari ever being at 100% EV, and certainly not in my lifetime will it reach even 50%.
Adam Jonas
That's a great color. Thanks for that. Just as a follow-up, I don't know, is Michael Leiters on the call today? No, he isn't, but ask away. You can do your best Michael Leder's imitation. How's your German accent? Yes, I can. I can. Okay. Very good. Okay. Remind us, and I know you've addressed it before, but I imagine that this is evolving, particularly as other internal combustion engine manufacturers move to EVs, not 100%, but maybe 50%. Remind us how Ferrari is thinking about the sound of a Ferrari without an exhaust system. And I didn't know if you could maybe address how you addressed it on the SF90 Stradale. I might have missed it when it's in E mode. Just to give us some things to think about, because I think in your own materials you mentioned sound. is the essence, the sexuality, the passion, the whole spirit of the brand. It starts with sound, and that's got a lot of investors' attention.
Monza
Thanks. Yes, and that's one element that we are working on. Obviously, for competitive reasons, I'm not going to give you the details, but that's something that we are quite comfortable that we can achieve. And it's really the depth of the sound and the gradation of the sound that's key. But you're right, sound is, in terms of all the consumer research we have, is one of the key elements. And clearly it is a big priority. We've done a lot of work on that and we feel comfortable that that is certainly one of the aspects that we can Thanks, Louis. Thank you.
Operator
Thank you. Your next question today comes from the line of Susie Tibaldi of UBS. Please ask your question.
Susie Tibaldi
Hi there. Thank you so much for taking my questions. So I have a few. So one clarification because you are still planning to make up for these 500 units this year. So does it mean that you're still targeting a minus 9% volume decrease for the full year, like you mentioned in the previous call? That's correct. Okay, so basically it implies that in Q4 we're going to see quite strong double-digit growth in terms of volumes, which I guess that's what it implies. Okay. When it comes to the EBITDA margin, also that is implied in your guidance, As you mentioned, clearly Q3 was a little bit of an exceptionally strong level because of the Monza. But I was also wondering if by any chance there were any one-offs maybe within OPEX that drove such strong margin expansion? And what exactly is happening then in Q4? Because the guidance is implying a margin contraction of 200, 300 bits versus last year.
Monza
Yeah, I think it was really driven by mix. As we said in the first question, MIX was very, very strong in Q3 and will continue to be pretty strong in Q4. So that's what's driving it. I don't think there's much I can add. There's no other one-timers in there that are distorting the picture in one way or another.
Susie Tibaldi
Okay. And when it comes to these lockdowns in Europe, which obviously we have very low visibility, if these lockdowns are just limited to a few markets and you say there's 80% of dealerships are open, are you able to sort of shuffle volumes within other countries in Europe? Because I suppose when it comes to Q4 and you will have the initial shipments of the Stradale and the Roma, Typically they will be directed to Europe. So if a large portion of Europe is closed, how, how would you react to that? Because I guess deliveries to us or Asia, they usually come with a at least six months lag. Um, so how do you think that you can manage the situation, um, in terms of lockdowns in Europe?
Monza
Yeah, well, it very much depends on, uh, the actual regulations. So the UK, the showrooms are closed, but deliveries continue. So in terms of deliveries per se, as rules stand today, they can continue. The showrooms, however, have an impact on the ability to drive orders, obviously. But I think as long as rules stay the way they are, and the UK probably has the most stringent at the moment, deliveries are possible. Furthermore, as you noticed in Q3, Europe's volumes were actually pretty strong, potentially in anticipation of issues in Europe. And I would say that in the fourth quarter, we'll have stronger performances in other geographic areas. So we do have some flexibility in terms of logistics and end markets, which I think was the genesis of your question.
spk00
As experts in online education, Purdue University Global gives you all the flexibility you need to balance school, work and life. Take classes 100% online to fit your schedule, your pace and your personal budget. Learn how to save on tuition and time online at Purdue Global.
Susie Tibaldi
Yeah, that's very clear. Thank you so much.
Monza
Thank you very much.
Operator
Thank you. Your next question today comes from the line of Giulio Pescatoro of Exxon. Please ask a question.
Giulio
Hi, everyone. Thank you for taking my question. Just the first one, I mean, it has a lot of change since we're all dining together in your Marnello factory in 2018. So I'm just wondering if you are willing to reconfirm the 2022 targets or if there are any changes that you might have to make to those I mean, targets on a headline basis, I guess more than on a margin basis.
Monza
Well, Giulio, as you said, a lot of things have changed since 2018, not least of which has been this very sad and destructive COVID. And we're now seeing a resurgence, as you know. I think that it's a bit early to talk about 2022 other than to say that What I said earlier, in terms of our plans, we have delayed a number of models by three months and some by nine months. So obviously that has a longer term impact going forward. But we still very much remain focused on the plan that was given, but some models will slip. uh others will be delayed by a quarter or two um but you know i mean next year we should have a strong year and i think that will form the base going forward uh and we'll give you obviously more details relative to 2021 uh at our next call uh which will be in february uh at which point we'll have a much better sense of where the world stands uh in terms of this covet which regretfully does create a lot of uncertainty.
Giulio
Okay, thank you, very clear. Then the second question on your hybrid targets, still about 2022, you had a 60% hybrid mixed target by 2022, and I think you're planning also to have a full hybrid range of mid-engine sport cars by 2021. Are those targets still valid, and what does it mean for the Tributo?
Monza
Well, again, we are pushing for hybrid. The SF90 Stradale is obviously the first one. There will be others. Some may be slightly delayed. But, you know, we're talking six to 12 months. We're not talking two or three years, Julio. But clearly, we want to... address hybridization because we think it has huge benefits. But I think also that when you see the carbon footprint, people tend to just look at emissions. We look at the entire carbon footprint. And a hybrid relative to an internal combustion engine, it's not necessarily that much more favorable. So it's something we're working on very carefully.
Giulio
Yeah, and I totally agree with you that people should be looking more at carbon footprint, but it doesn't seem to be the case, at least when we look at regulatory decisions at the local level. For example, if we look at the French Malu scheme that has basically been penalizing you with a 20,000 euros fine this year, going up to 30,000 and 40,000, 50,000 in 2022. I mean, How are these penalties affecting your sales into this market? And are you afraid of more countries kind of adopting a similar type of scheme? Because, of course, all of your cars, except for the SF90, emit more than 200 grams of CO2.
Monza
Yeah, you're right. They're adding, I guess, the sort of excise taxes. I think the whole car industry needs to really educate the regulators. Because to look at emissions and even then to look at just static emissions, I think is wrong from a scientific perspective. And the car industry needs to do a much better job at explaining the entire carbon footprint. And I think they will do that going forward. We, Ferrari, have a role in that. And we obviously have to do our job. And I think, as I said in my opening remarks, to come out with a detailed carbon footprint will form the basis to really start explaining the various aspects. Because if you take a V12 Ferrari that only runs 3,000 kilometers a year, probably has less emissions than a very small car that runs every day.
Giulio
Yeah, totally clear. Yeah, thank you very much.
Monza
Thank you.
Operator
Thank you. Your next question today comes from the line of Monica Bossio of InterSan Paolo. Please ask your question.
Monica Bossio
Yes, good afternoon. It's Monica Bossio from InterSan Paolo, and thanks for taking my question. The first one is on the personalization. Antonio told that they were a little bit lower on the quarter, Could you please quantify the level and reasonable projection for the full year and the next one? And the second is on the CAPEX. Do you still confirm 750 million of CAPEX by year end? And the second question is more in general. Could we please come back to the statement regarding the enlargement of the customer base and the fact that there is a high penetration of younger people. I would like to have more color on this, maybe also a view in three years' time if it's possible. Thank you very much.
Monica Bossio
You know Liberty Mutual customizes your car insurance, so you only pay for what you need. Like how I customized this scarf. Check out this backpack I made for Marco. Only pay for what you need.
Pista
Liberty, Liberty, Liberty, Liberty.
Antonio
Maybe I'll start first, Monica. On personalization, we were just a touch lower in percentage terms compared to last year, which was, if I remember correctly, above 20%. And in terms of capital expenditure, I said 750, more or less, approximately at this stage. What's your question in that respect? I'm sorry.
Monica Bossio
The question, the second question was on the enlargement of the customer base. I heard in the initial statement that the penetration of...
Monza
I got your question, Monica. Thank you. Clearly, one of our important strategies going forward is to attract new customers and ideally younger customers and also to expand our gender balance. So to attract women as well, which today is still a very low proportion of our sales. I think we've made progress, as I mentioned in the opening remarks, and it is something we're very much focused on. So far the numbers are moving in the right direction, and I think the various activities that are in place, predominantly in terms of digital activities, but also all the test drives, and generally the whole positioning of some of the models will attract new customers and hopefully younger customers. Roma is one example. The SF90 has attracted young customers as well. As I said, that may be linked to hybridization. We will see. But it's something we're very focused on, and there has been progress. I'm confident that we will continue to progress. And I think if you look at our market shares worldwide in the segments in which we participate, we are gaining solid share points across most geographies. So that in itself, I think, is a good sign. Does that answer your question?
Monica Bossio
Yes, perfect. Thank you very much. Thank you.
Operator
Thank you. Thank you. Your next question today comes from the line of George Gallius of Goldman Sachs. Please ask a question.
George Gallius
Thank you for taking my questions. First question I had was just with respect to the dealers being closed. And you mentioned in the UK that you can actually still deliver cars. Based on the last lockdown, do you find that your customers are happy to take delivery or indeed want to take delivery without having the full showroom experience or in general is the showroom experience part of the excitement and the thrill of collecting your brand new Ferrari. The second question I had was just on the catch-up of the 2,000 units lost this year. Obviously you've referenced the 500 but in theory and this is really hypothetical not asking if you will do but in theory If you wanted to catch up the remaining 1,500 all in 2021, are there any capacity issues that would prevent you from doing so, or is that something you could manage with incremental shifts or change in shift patterns? Thank you.
Monza
Thank you, George. I think our customers would rather have delivery than to wait. I think the whole showroom experience, certainly part of it is the delivery, but I think the real excitement is the order and all the elements of personalization, choosing the colors and all the various elements. I think the showrooms from that perspective are really part of the whole thrill of purchasing a Ferrari. I think that most people, once the car is in the dealer, they want to see it and they want to enjoy it and drive it. So certainly nobody's complaining about the fact that they're getting a delivery without seeing it in the showroom. The showroom is more to get the thrill of the order and to trigger the orders. The concern there is relative to orders going forward rather than deliveries. I don't know if that addresses one of your questions. It's always difficult to talk about hypotheticals because there are capacity constraints. And we will focus our volume very much based on the waiting lists. the mix of products on that waiting list mix in terms of both models and geography. So I don't think I could really answer in terms of total capacity. I think in terms of total capacity utilization, if there was a constraint, it's people and the time it takes to train them, especially with regard to new models. especially with things that are very complex like the SF90, which, you know, has 2,000 new components. So putting those on the production line takes a bit of time to ramp it up to full capacity. That's just one example.
George Gallius
Great. Thank you. And if I may just slip in one quick final one. Obviously, Sebastian is leaving you at the end of this season, and... I just wanted to ask, as a four times world champion, presumably he was being very well remunerated. Will that be a saving that will flow through your P&L next year, assuming that he was remunerated largely by Ferrari rather than by sponsors?
Monza
I think that's a fair assumption. And I think going back to the earlier question in terms of attracting youth to have two drivers like Charles and Carlos, I think that gives us added equity in terms of attracting young people. Having said that, Seb has done a phenomenal job for Ferrari in the past, and he'll always be part of the family.
George Gallius
Great. Thank you very much.
Monza
Thank you.
Operator
Thank you. Your next question today comes from the line of Michael Binetti of Credit Suisse. Please ask a question.
Michael Binetti
Hey, everybody. Good afternoon. Thanks for taking our questions. Just a quick near-term one for the models, and I had a follow-up. But on slide nine, you know, the DNA component in the third quarter, I guess the EBITDA margin was up a lot, over 300 basis points. EBIT was only up 25. You know, when we started the year, I think you noted a pretty meaningful step up in DNA as a hold back to the margin guidance for the year as you started to develop, or sorry, started to amortize a lot of the development of Stradale. I think earlier in the year, you thought that Stradale would start to ship in third quarter. I just, I want to look ahead to fourth quarter as you've now started to ship Stradale. Do we see, is that when you see a significant step up in the DNA impact to the margins in fourth quarter? And I guess another way to ask that is last year the mix was a significant positive. You pointed that out in fourth quarter. Stradale, is that a – could you just tell us, is that a creative to the gross margins and EBITDA margins in fourth quarter to the company?
Antonio
Maybe, Michael. Hi. It's Antonio speaking. I'm on DNA. You should not see that as correlated to the numbers of cars that we sell, but more the time since the car is introduced. It goes to the P&L linearly from then on.
Michael Binetti
Okay.
Monza
I wouldn't also just ascribe the investment to the SF90. There's a whole slew of other things related to future technology innovation that will eventually find itself or themselves in models going forward. So it's not specific to one model per se.
Michael Binetti
Gotcha. Your second question was? As we look, I know you had a big mix tailwind on the EBIT bridge in the fourth quarter last year. As Stradale comes on, that seems like the biggest year-over-year change in the fleet in fourth quarter. Is that accretive to gross and EBITDA margin in fourth quarter?
Monza
Stradale is accretive to the average, yes.
Michael Binetti
Okay. I guess then... Longer term, you know, so we have a pandemic that's obviously disrupted your path to the original 2022 plan. You talked about that a little earlier, but you also have a new Concord agreement signed that gives you visibility on part of the business there through 2025. As you look at this, is it time for another capital markets day? How are you thinking about, you know, keeping updated targets for the long term?
Monza
Well, it's something we've discussed internally as to when we'll have our next capital markets day. The time will come for us to have one. Obviously, we can't have one now because we would like to have one, which is face-to-face. So news to come, but I guess we will have one in the not-too-distant future.
Michael Binetti
Okay. If I could ask you just one last one. I know you talked a little bit about electrification, but there's been some interviews from people at FIA that have noted a Formula One shift towards synthetic fuels and biofuels as an answer to some of the environmental concerns coming up. And there's even been some that have mentioned that they expect Ferrari will be co-investing in those initiatives. I know you have one eye on electrification, but where do you see biofuels, synthetic fuels as part of the answer for the ESG
Monza
Initiatives that you talked about earlier as you look, you know over the longer term I Think they potentially have a big role to play particularly in terms of biofuels as opposed to synthetic fuels But clearly they have a role to play big-time It'll probably start with Formula One it provides now as of 2022 has to have a 10% biofuel percentage, which is the start. The FIA obviously wants to increase that. As I mentioned, there's a new power unit that has to come into vigor as of 2026. So defining that power unit is going to have to be done in the very near future. Once that's defined, we'll be able to figure out what the components will be, and particularly with regard to the fuels.
Michael Binetti
Thanks a lot, guys. Congrats on a nice quarter.
Operator
Thank you very much, Michael. Thank you. Your next question today comes from the line of Thomas Besson of Kepler Subwoo. Please ask your question.
Michael
Thank you very much. I have two very quick ones, please. First, on the mix, would you mind giving us the number of Monza deliveries in Q3 and tell us if it was the biggest quarter yet or if you've done better before? And second, on your small engine business, It was unusually strong compared with what we've seen in Q1 and Q2. Could you explain why and what we should expect in 2021, specifically for the majority parties? Are there still going to be any business left? Or whether it's linked with Formula One that has seen eventually a pickup here? Thank you.
Monza
Link2 buys shares because when you need cash for your kid's school, you want a house that's less cramped, or your brother-in-law falls for another get-rich-quick scheme, you don't need equity, you need liquidity, which is why Link2 buys shares.
Monza
In terms of Monza, there was approximately 50 units in the third quarter, yesterday 120. And in terms of Maserati, it's really a reflection of the orders we receive. We anticipate that next year the volumes will decline.
Michael
Reglio, thank you very much.
Monza
Thank you.
Operator
Thank you. And your next question today comes from the line of Stephen Reitman of Societe Generale. Please ask a question.
Stephen Reitman
Good afternoon, Louis and Antonio. I have two questions, please. First of all, I was intrigued by your comment about the high, the increase in orders you've seen on the Roma compared to the Bordofino in China. Because clearly China has not been the market for the two-seaters, but do you think that you're seeing potentially a way to crack that market even before you launch the Pura Sangue? And my second question is about the SF90 Stradale. The Assetto Fiorano option, are you limited and what percentage of sales would you be able to supply with that option and what has the demand been for that? Because obviously it's a significant upgrade in terms of cost and I suppose profitability.
Monza
Thank you. Yeah, we're very encouraged by the ROMA up to now in China. We're very encouraged by the level of orders we're receiving. and the demographics, so that's a good sign. And yes, potentially it could start the process of really penetrating the Chinese market in a more material manner than we've been able to. Obviously the 2 plus 2 is an attractive combination. So that's one. The Assetto Fiorano, yes, generates a higher margin than the SF90. We've actually been very encouraged by the level of orders on the Assetto, significantly higher than we had expected, and it's running around 40% of total orders. We do not really have capacity constraints in terms of the Assetto Furano. It takes time for our suppliers to gear up. But over time, we don't have capacity constraints on that one. It really is not an issue, I don't think.
Stephen Reitman
Does that count as personalization as well? Correct. Thank you very much. Thank you.
Operator
Thank you. There are no further questions at this time. Nicola, please go ahead.
Nicoletta Russo
Thank you, everyone, for joining us today. The IAR team will be soon available to answer all your follow-up questions. Thank you. Bye-bye.
Operator
Bye. Bye, everyone. Thank you. Bye-bye. That does conclude our conference for today. Thank you all for participating. You may now disconnect.
Disclaimer