Ferrari N.V. Common Shares

Good day and thank you for standing by. Welcome to the Ferrari 2021 Q2 results conference call. At this time, all participants are in listen-only mode. After the speaker's presentation, there will be a question and answer session. To ask a question during the session, you will need to press star and 1 on the telephone keypad. Please be advised that today's conference is being recorded today, Monday, the 2nd of August, 2021. For any further assistance, please press star and 0. I would like to hand the conference over to our first speaker of the day, Nicoletta Russo. Please go ahead.

Thank you, Gino, and welcome to everyone who is joining us. We plan to cover today the group's second quarter 2021 operating results. In light of this, the duration of the call is expected to be around 60 minutes. Today's call will be hosted by the group's chairman and acting CEO, Mr. John Elkin, and group CFO, Mr. Antonio Picapicon. 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. Since our team today is connecting from different countries, please forgive us if there are moments of silence during the call while we manage the transition between speakers. With that said, I'd like to turn the call over to Mr. John Elkin.

Thank you, Nicoletta, and thank you, everyone, for joining us today. The very strong numbers we're reporting are once again an expression of the extraordinary skills relentless endeavors and passionate dedication of all the men and women of Maranello. But most of all, they are testimony to the unique and enduring power of Ferrari to inspire the dreams of our loyal owners all around the world and the ones of our new customers. June was our record order collection month ever, which is a big achievement for us driven by a large number of Ferrari soon-to-be first-time owners. Strong guarantee for our future. In the second quarter, we delivered a strong set of results across all metrics above pre-pandemic levels with an EBITDA margin of 37% thanks to the particularly rich mix of this part of the year. boosted by the SF90 Stradale and Ferrari Monza. The mix will normalize in the second half, leading us to confirm our guidance on all metrics. Whilst for the industrial free cash flow, thanks to working capital, we now project to approach 450 million euros in 2021 versus our original guidance of 350 million. Today's call is the third and final one I will host as Ferrari's CEO, following our announcement in June of the appointment of Benedetto Vigna as our new CEO, commencing on September 1st. Benedetto joins Ferrari from STMicroelectronics, where he has been responsible for creating building and leading that company's largest and most profitable business. His proven leadership qualities, his impressive track record as an entrepreneur and innovator, his absolute fluencies in the technologies that are shaping our industry fit strongly with the ambitious plans we have for our future. I'd also like to take the opportunity today to share with you some of additional perspectives I have gained over these months in my role as CEO, during which time I've had the privilege of working more closely than ever with my Ferrari colleagues. Most importantly, these months have allowed me to live more intensively the uniqueness of Ferrari. I have seen up close the total commitment and passion in every corner of our company to ensuring that Ferrari is and always will be the very epitome of pure luxury, an expression of exclusivity that is imitated but can never be reproduced elsewhere. That is why everything we do will always focus on being distinctively Ferrari, which the opportunity set of electrification, electronics, and other technologies that are coming available will allow us to make even more distinct and unique products. This is why every day we're finding new ways to excite existing Ferrari owners whose loyalty as repeat customers reflects the unique relationship they have developed with our company and we with them. And just as importantly, we are building new strong bonds with the next generations of Ferrari owners. And I'm pleased to tell you that new to Ferrari customers accounted for 60% of the orders for our entry models in the first half of this year. The average owner's age is also coming down, and we have doubled the number of women owners in the last years. with China leading the way with one out of five buyers being a woman. In Q2, we brought you three new model launches, the 812 Competizione and the 812 Competizione Aperta, our special series V12, exclusively limited to our most loyal and committed customers, which already sold out at launch. And then the Ferrari 296 GTB, our first V6 hybrid road car with the Ferrari badge, targeting a new and younger Ferrari owner. Since the unveiling in late June, orders are flowing fast. The Ferrari 296 GTB is the third hybrid car in our range, following on from the SF90 Stradale and Spyder. But while the latter are our range supercar, the new 296 GTB is the most fun-to-drive car for drivers of all levels. But what I would like to highlight most is not just the increasing pace of our electrification plants, but our ability to use and invent technologies in a way that is uncompromisingly and distinctively Ferrari. In this last quarter, we have also shared with you a taste of our exciting future in a different dimension. In addition to unveiling the latest additions to our richest and most complete model lineup ever, we staged our first runway event to showcase our men's and women's fashion collection and reopened the historic Cavalino restaurant in Maranello, both to great acclaim. These generated 100 million reaches with very strong demographics, both in terms of gender, 45% women and 55% men, while 85% of them being in the 18 to 34 age range. These positive reactions we received are early indications, not only of the strength of Ferrari with new audiences, but also of the ability to execute in a way that is true to our history, our values, for our future. Moving into new areas in a considered way and always relentlessly focus on excellence. A further example of this is our launch on the Fortnite platform, combining virtual and physical and our car product with our capsule collections. further strengthening our reach, both in terms of audiences, but also entering new geographies and demographics. At the same time, we are more focused than ever on the importance of our motor racing roots. In Formula One, our young and exciting driver pairing has brought new energy to the entire Formula One team. We are also working intensively on our return to the hypercar class, and in particular to the Le Mans 24 Hours race in 2023. Success at the very highest level of motor racing is in our blood, as we have proven with our victory at the 24 Hours Spa Francorchamps in the Endurance Cup of GT World Challenge this weekend. Working even more closely in these months with our racing teams has only sharpened my and our determination to deliver victory on the track and to ensure that we capitalize even more on the opportunities for technology transfer from our motor racing activities to our road car programs. Just as an example, the V6 hybrid is common to our different racing activities, but also to the new car we just launched. We will share much more about the ambitious plans we have for every aspect of our business at our next Capital Markets Day, when we also be celebrating the 75th anniversary of the founding of our company by Enso Ferrari. This will set out the path we will take during this decade, but it will be much more than this. It will provide the foundations on which we will build the continuing long-term success of Ferrari as the world's most distinctive and most innovative luxury brand, moving swiftly to create continuing growth opportunities from the changes of a fast-transforming world. but never compromising on our commitment to be the unmatched expression of Italian excellence. Benedetto, our colleagues and I look forward to welcoming you to our Capital Markets Day in Maranello, which is now set to take place on June 16 next year, when we will take you deeply into our plans for the coming years. In the meantime, we continue to be laser-focused on our performance in the second half of this current year. It has been a unique privilege for me to lead Ferrari as its CEO since the end of last year, and the insights it has given me leave me even more excited about our future. It is one in which the opportunities for Ferrari to create emotion and value are stronger than ever. And I look forward very much to working closely with Benedetto and his team to take Ferrari to new levels in every way. I would like also in concluding, tell you how proud I am that in June 30th, we have been awarded the three stars of FIA, S-I-A, Environmental Accreditation Program. And on July 12th, we have been confirmed equal salary company, and that confirmation also came in North America. This is very important and something that we're very proud in Ferrari of, because it shows how our commitment to ESG is a true commitment. I would now like to hand over to Antonio, who will take you through the details of a great second quarter, to which I'd like to thank him and all the Ferrari colleagues for what they've done. Thank you.