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spk04: Good day and thank you for standing by. Welcome to the Ferrari 2021 Q3 results conference call. At this time, all participants are in a 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 your telephone. Please be advised that today's conference has been recorded. If you require any further assistance, please press star zero. I would now like to hand the conference over to your speaker today, Nicoletta Russo.
spk01: Please go ahead. Thank you, Sara, and welcome to everyone who is joining us. Today, we plan to cover our group's Q3 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 CEO, Mr. Benedetto Vigna, 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 risk and uncertainties mentioned in the Safe Harbour Statement included on page 2 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 Mr. Benedetto Vigna.
spk09: Thank you, Nicoletta. Thank you so much. And thank you, everyone, for joining us today. First of all, I would like to say that it is a great honor for me to be here today for the first time as Ferrari CEO. and even a great honor to take you through the latest results of this wonderful company. Before joining this team, I have always had a huge admiration for Ferrari, for its people, its achievements, and of course for its incredible cars and racing expertise, all brought together under a legendary brand that's known and respected all around the world. Now that I am in the privileged position of being on the inside, leading this unique company, my admiration is so much greater. But before we talk about the last quarter, I'd like to share with you a little bit of my experience here in Ferrari during the first weeks since I arrived in Maranello. First and foremost, I've been getting to know our highly motivated and skilled team. And I've been very much impressed by their dedication to every detail, by their knowledge, and by their skill. But most of all, by their openness to learning and improving everything we do, every step of the way. They all want to take Ferrari to new, even greater levels. They have made me feel very much at home from day one, so I'd like to take this opportunity to thank everyone in the company for their warm welcome. We've no doubt we have many exciting and rewarding times ahead of us, in which our opportunities have never been greater. And what convinces me of this more than ever, are the following three key factors that I've seen so clearly expressed by my colleague in my first weeks. I refer to passion, I refer to excellence, and I refer to innovation. First of all, passion. You may have heard this word many times, since it is often very used, but I believe Here in Ferrari, it finds its true meaning. Everyone who has any connection with Ferrari, whether they be colleagues, partners, Tifosi and of course our customers, all express a sense of belonging, a belief and a love for our brand which is quite unlike anything I have known. Second, excellence. In Ferrari, we craft timeless icons that are not only beautiful to look at, but also deliver a unique experience. Most of all, they are known for being fun to drive, and this is something I can testify to myself. And third, innovation. And by innovation, I don't just mean the ability to exploit technology to the maximum. but also the way we express visibility through the special collaboration between our teams in the constant drive to perfect what we do and the creative inspiration we bring to our craft the sf90 stradale is a testament to this as are also the sf90 spiders and the 296 gtb all solid steps ahead in the implementation of our electrification plans that are part of our path towards new technology in the distinctive Ferrari way. Of course, this relentless dedication to our craft for our customers is also dedicated to our investors who place their trust in us and to you, to all of you who follow us. Having shared my initial experience in Ferrari, let's focus on the result of this last quarter. And here, I would like to highlight the following three things that are all first. Revenues, cash flow, and order intake. Revenue first. This is the first time in our history that in Q3 we crossed the 1 billion euro revenue threshold. Now, cash flow. We have delivered the strong Q3 in our history in terms of industrial free cash flow generation. And last but not least, order intake. This is the highest ever quarter of order intake across all models and regions, with mainland China and U.S. being particularly strong. But how did we achieve all of this? How was it possible? well i'd like to point to the following three factors first of all we have capitalized through focus and discipline on a strong economic climate as evidenced also by the solid performance of our pre-owned business second we have the most beautiful most innovative and widest product range in our history the 296 gtb with its hybrid v6 which we launched in June, has been received with huge enthusiasm, with orders flowing in even before customers have had the opportunity to drive the cars. And of course, last but not least, we have to thank our incredible customers, both existing and new. Speaking of our customers, it has been really liberating to be able to start arranging events with them again in september in sicily i was delighted to attend the 10th anniversary of the cavalcade a truly memorable event in every sense in fact for the first time over 120 historic and contemporary ferraris joined a single parade if you had been able to join me in Sicily, you would have been surrounded by a selection of truly beautiful cars, Ferrari at its finest, from the Monza to the Portofino, from the hybrid power of the Ferrari and SF90 Stradale to the historic Testarossa and F50. But more than anything, this occasion truly emphasized that owning a Ferrari is so much more than just owning a car. It is the experience of being a member of the unique Ferrari family. And so, I am really proud to announce today to all our loyal Ferrari family members that a new surprise is coming soon with the unveiling in the middle of this month of our second Icona model. it will be another very special occasion. Just be patient for a few more days. Now, after the Q3 highlight, let's have a quick look together at the future. My first two months in Maranello confirmed to me that we are very strongly positioned to capitalize on the many opportunities we have in our hands today and the ones that lie ahead of us. I believe a Ferrari, as it has always done, will distinguish itself yet again through its creativity and ability to apply and interpret the vast array of future technologies and always with our uncompromising and distinctive style. This will happen while always remaining disciplined in our approach to investment. To achieve this result, our people are the key. They really are the key. Through our special close collaboration, working with commitment and dedication for a common goal, we will deliver enduring success together. This has been the source of our unique success in the past, and it will also power our future, both within the company and outside the company. working with all of our partners, present and future. This is exactly the kind of innovative and open approach you can expect under my leadership here, as demonstrated also by the recent exciting collaboration we announced with Labfrom. We are also making excellent progress with our brand diversification strategy to further enhance the vibrancy and vitality of our brand. We have unveiled the first fashion collection, we have renovated our flagship stores in Maranello, Milano and Los Angeles, and we reopened the iconic Cavallino restaurant here next to our home. We are making important progress also in our motor racing activities. Indeed, just a few weeks ago, in August, Our 488 GT Evo won at Le Mans, a circuit we will return to in 2023 to compete at highest level with our hypercar. In Formula 1, in the most recent races, we have seen some positive signs of progress as well. Competition. Competition on the track has been deep in Ferrari's DNA through our history. So it is today, so it will be in the future. There are many, many projects under development in our company, but there are three areas I would like to highlight today. Our brand, our product, and carbon neutrality. Our brand first. Relentlessly, we will continue to nurture and evolve our brand by enhancing an already engaging, immersive and authentic experience for all our customers, current and new ones. Whenever and wherever they get in touch with us, when they drive the car, attend a Ferrari event or enter our stores, In the real world, or in the digital dimension, we are fully committed to make this an extraordinary emotional experience. We are fully aware of this enormous responsibility, especially in a world rapidly changing like today. Now, after brand the product, we will continue the disciplined extension of our product range. through the launch of the Puro Sangue, which we will unveil next year. We will work to capture all the possibilities offered by technologies in a unique and distinctive way, always preserving our exclusivity and luxury positioning as we have done throughout our history. And finally, carbon neutrality. We will continue our focused journey toward carbon neutrality by 2030, a key priority for my tenure and for our business. And to be clear, in addition to our electrification journey, we are committed to addressing both direct and indirect emissions with a focus on energy and materials. At our next Capital Market Day, we will provide you with plenty of detail and colors about our future plans and the path to delivery. And we look forward to hosting you in Maranello on June 16th. Let me conclude these opening words by again thanking all my Ferrari colleagues for their warm welcome and for all their amazing work. I am deeply honored to be leading them into the next phase of our extraordinary journey. And, of course, my thanks go also to our Board and to our Chairman for their support and confidence, and also to you, to all of you, for your precise and dedicated interest in everything we do. I would now like to hand over to Antonio to present in detail the Q3 2021 earnings.
spk08: Grazie, Benedetto, and good morning or afternoon to everyone who is joining us today. The warmest welcome to you, Benedetto, also by me and the whole team here, and the promise of our tireless commitment to drive Ferrari towards even brighter achievements will be at your side. Now let's come to our quarter. Starting on page four, you can see the highlights of the Q3 2021 earnings. A very solid set of results across all metrics and exceptionally strong on industrial free cash flow generation. Our shipments were 2,750 units, up 18.9% versus the prior year and up 11.2% versus the third quarter of 2019. Group net revenues were €1.5 billion, increased by 18.6% versus prior year, and up 15.1% versus 2019, driven mainly by volume and stronger product mix. EBITDA came in at €371 million, up 12.4% versus the third quarter of 2020, and up 19.6% versus Q3 2019. As already mentioned in previous earnings call, the EBITDA margin decreased compared to H1-21 level of 37.3% as entry-level models were ramping up as expected and OPEX grew in line with our programs. Compared to Q3 2020, the EBITDA margin was also down since in such quarter of last year, the estimates of the F1 sponsorship and commercial revenues were revised upward, and the impact of cost containment measures undertaken to react to the pandemic became fully visible. EBIT was 270 million euro, up 21.8%, versus Q3 2020, and up 19.2% versus Q3 2019. Net profit was 207 million euro, up 20.8% versus the third quarter of 2020, and up 22.4% versus Q3 2019, resulting in diluted EPS of one euro and 11 cents, up 20.7% versus prior year. Industrial free cash flow for the quarter was exceptionally strong at €242 million, supported mainly by the collection of the advances for the A12 competizione. Turning to page 5, you can see the details of the shipments of the third quarter 2021, up 18.9% versus the third quarter of 2020. sales of eight cylinder were up 39.4 percent while 12 cylinders were down 35.1 percent mainly due to the reduced volumes of the a12 superfast there are not yet sales for the v6 range represented by the 296 gtb The shipments of Q3 were driven by the range models in the portfolio, with the first deliveries of the SF90 Stradale beginning in the quarter and the Ferrari Portofino M entering the ramp-up phase. Shipments of the Ferrari Monza SP1 and SP2 continued in line with planning. All geographies contributed positively. As a result, EMEA was up 1.6% compared to a third quarter of 2020 when the region grew by 12.7%. Americas increased 40.1% after losing 34.7% in Q3 2020. Mainland China, Hong Kong, and Taiwan doubled thanks to the arrival of new models. in particular the Ferrari Roma and the SF90 Stradale. Last year, the region had lost 25.2%. Finally, the rest of APAC was up 21.1% from being almost flat in Q3 2020. Moving to page 6, you can see here displayed the walk of our group net revenues for the third quarter. up 20.7% at constant currency. The increasing revenues from cars and spare parts, up 23.5% at constant currency, was supported by higher volumes and positive product mix, along with personalizations. Personalizations were up versus the prior year in absolute terms, sustained by volumes, while in line with historical average, in proportion to revenues from cars and spare parts at around 17 percent engines revenues were up 24.8 percent the improvement is related to higher shipments to maserati and to a lesser extent to the rental of engines to other formula one racing teams The increase in sponsorship, commercial and brand was attributable mainly to brand related activities. As already mentioned, in Q3 2020, our revenue accrual for F1 sponsorship and commercial was based on full year estimates updated in such quarter and improved compared to first half of 2020. Currency, including translation and transaction impact, as well as foreign currency edges, had a negative contribution of 15 million euro, mostly related to edges. Moving to page 7, let me review the change in our EBIT bridge, explained by the following variances. Volume was positive for €39 million, reflecting the shipment's increase. Mixed price variance was also positive for €41 million, thanks to the strong contribution of the SF90 family and the Ferrari Monza SP1 and SP2, along with personalizations, partially offset by the Ferrari Roma ramp-up and the reduced contribution of the A12 Superfast. Industrial and R&D expenses increased €12 million, mainly due to product innovation and start-up costs, including Formula 1. SG&A were negative by €4 million, mainly reflecting communication and marketing activities following the gradual restart of our events. Other decreased mainly due to higher costs related to the assumption of better F1 in-season ranking and no recurring charges impacting other supporting activities. The total net impact of currency was negative for 14 million euro. As a result of what I just mentioned, EBIT reached 270 million euro, up 21.10% compared to the prior year and with an EBIT margin of 25.7%. Turning to page 8, industrial free cash flow generation for the quarter was 242 million euro. This exceptional performance for the quarter led us to beat our full year guidance in 9 months only. Cash flow was mainly sustained by EBITDA and the collection of advances on the A12 competizione, whose inflow was faster than initially anticipated. The working capital dynamics were also neutral for the quarter, which was unusual compared to our typical seasonality, mainly due to timing of our expenditures. These will be at least partly reabsorbed in Q4. All of the above was partially upset by €199 million of investments that are progressing in line with plans. The capitalization ratio was approximately 39% for the quarter, decreased versus prior year, essentially due to the increased weight of product innovation activities. net industrial debt as of the end of september was 368 million euro versus 552 as of the end of june decreased thanks to the robust industrial free cash flow generation of the quarter on page nine we revise upward our 2021 guidance across all metrics on the back of the strong trading performance recorded so far, and the confidence on positive development for the core business in the last part of the year, coupled with improved targets for our operating expenditures. The overall full-year contribution of Formula One commercial revenues is still uncertain. However, opportunities may arise in addition to this improved outlook. Industrial free cash flow generation is now projected to be greater than €550 million, reflecting improved profitability, savings on capex compared to our previous estimates, now seen closer to €750 million, and continuing support from net working capital thanks to the collection of advances in our special series, and capital expenditures being weighted over the last month of the year. Our guidance still relies on the assumption that trading conditions remain unaffected by risk of recrudescence of the COVID-19 pandemic and continuing scarcity of electronic components. However, the dynamics of current market demand, never so vibrant before, support our confidence for the year and well beyond. With that said, I turn the call over to Nicoletta.
spk01: Thank you, Antonio. We are now ready to start the Q&A session. Over to you, Sara. Thank you.
spk04: Thank you. As a reminder, you will need to press the star and one on your to ask a question. Please press the ask key. Once again, it is a start and one to ask a question. We will now take our first question from the line of Thomas Besson . Please go ahead. Your line is open.
spk12: Thank you very much. I'll have a couple of questions, please.
spk01: I'm sorry, Thomas. We have some difficulty hearing you. Could you kindly speak closer to the microphone, please?
spk11: Yes. Sorry for that, Nicoletta. Is it better now?
spk01: Definitely. Thank you very much.
spk11: Thank you. So it's Thomas. I have a couple of questions. The first one may be quite unusual, but it's the first time we have a chance to speak with you, Benedetto. Could you please tell us about your hiring process and what you believe have been the key qualities you bring in that have made you the one selected to run this company?
spk09: Hi, Thomas. Nice meeting you. Thanks for your question. Pretty interesting. What I believe I can bring in Ferrari is three things. I think I can bring the experience that I've been able to navigate in the previous company through times when in an environment that is changing pretty fast. So I think this is one thing I can bring. The second is I have been able and I've been exposed to pretty much international world. So I think this is also another contribution I can bring to the team. And the last, I think, is about the leadership style that helped me to drive the team in the previous company to achieve the result that I think you have seen from the other company a few days ago. So these are the three things, international experience, leadership style and ability to manage situation in a changing time.
spk11: Great. Thank you very much. My second question is more classic for a learning school. It will relate to the comments you may eventually make on CAPEX for requirements for Ferrari for this year. I think for the future you'll probably want to wait until June to give us more details. You've talked about CapEx being essentially in the last month of the year. Can we still expect the previous guidance to hold, or are you going to be able to spend slightly less on plan for this year?
spk08: On this year, I just explained we are revising our estimates towards 750 million euro, and this is just better spending and skewed towards the end of the year with no delays. With respect to the future years, I think it's important that we wait for the call as of the end of this year. We'll provide you with indication on 2022, and then, of course, we'll have the capital market day, and we'll outline the future there.
spk11: Thank you.
spk04: We will now take our next question from the line of Monica Bosio at Intesa San Paolo. Please go ahead. Your line is open.
spk05: Good afternoon everyone and thanks for taking my question and welcome to Benedetto. I have two questions. The first one, if you can give us a flavor on the waiting list and if you had some supply chain problem that could have affected the waiting list. And if yes, if the company is going to implement some action or to revise the general philosophy of the waiting list if they are too long. And the second question is on the order intake. I don't know if you can give us some colors, but I would really appreciate some colors from a country-level standpoint. Thank you very much.
spk09: Ciao Monica, thanks for the warm welcome. I hope to see you also in person, maybe here in Maranello. So I will start from the supply chain. The supply chain, I have to say that the team here, the team in Ferrari, with also the support of suppliers, have been able to manage properly this situation that many players are facing all over the world. I have to express really a kind word for the team here and also for the supplier that have been supporting us. This is about the supply chain. About the net order, I mean intake, as I said also in my part, there is for sure there are some new models like the 296 GTB, for example, that is doing pretty well, that's what I said. But there is also a strong positive trend across all the market and all the segments. So this is very, very, very positive. For the waiting list, I don't know, Antonio, if you want to add something.
spk08: Yeah, hi, Monica. As usual, we are above one year coverage for all models.
spk05: and some of them are already sold out oh okay thank you so no problem from the waiting list the ad for the supply chain everything is under control is it okay yes this is correct okay thank you very much thank you we will now take our next question from the line of julio pescatore at exam please go ahead
spk14: Thanks for taking my question and benvenuto, Benedetto. The first one, I would like to go back to a comment that was made by your predecessor. I mean, he said in the past that he never saw, he didn't see Ferrari becoming completely electric in the foreseeable future. I know you want to wait for next year to give us more color on this, but maybe can you just express your thinking around the electrification issue?
spk09: Ciao, Giulio. I think that in general technologies are needed to address needs of the customer to delight them what i would like to say is that we as a company started our electrification electrification path already a few years ago it was the case of la ferrari and then it is the case now with the sf90 stradale we will continue And as our chairman said in the previous call, we will unveil the full electric car in 2025. And I will be more delighted to show you the full plan when we meet here on June 16.
spk14: next year okay uh fair enough and uh just maybe one question on a comment you made you said that the company will continue to follow a disciplined approach to investment uh can maybe elaborate a bit on this statement you made yeah i think this is important point i in my in all my careers i have always optimized the use of the capital to reach some goal so
spk09: I believe that the beauty of our work is to make sure that we reach the goal of optimizing the use of the capital. That's what I did in the previous company. That's what I intend to do here with the team. Capital discipline is very important. Otherwise, let me say it this way, innovation would be too easy if you don't have any boundary constraint.
spk14: Okay. And maybe one last one. on more short term if we think about the the new icon you're presenting in mid-november um should the deposits for this model follow the the same pattern that uh that the deposits for the monster follow so very strong influence in maybe q1 q2 next year hi giulio antonio speaking uh yes we expected to follow a similar path it will not impact 2021 though we'll start from 2022. perfect thank you very much and good luck
spk04: We will now take our next question from the line of Susie Tibaldi at UBS. Please go ahead, your line is open.
spk06: Hi, thank you for taking my question and good to hear from you, Benedetto. So one question, to just go back to the waiting list, I wanted to ask what's your view, your personal view on retaining the exclusivity of the brand? And at the same time, you have these order books that continue to expand, and you will eventually reach a point where consumers either have to wait too long or you'll be in a position to choose either to prioritize the price, so maybe increase the price mix a little bit more aggressively, or having to increase the volume production. So in a philosophical way, what's your view on this scenario, which obviously is not a good place to be in, but it will be interesting to see how you approach this.
spk09: Nice to see. Clearly, I mean, the waiting list, as Antonio said, is in a good position. And I think that's also already what we started. There is a way to manage it properly, playing with the price. And in fact, we already started to increase the price so that we can manage it properly. uh this situation but we have also to say that usually what we see and is that customer that want Ferrari they also are willing to wait a little bit because when you drive a Ferrari you don't drive a car you drive a Ferrari car and I think the unique experience you get over there are memorable so On one side, we are increasing price. On the other side, we believe that the Ferrari experience saw that the people are going to stay and willing to wait.
spk06: Understood. And in terms of the full-year guidance that you upgraded today, if we look at what this implies for the fourth quarter in terms of EBITDA, it's only a low to mid-single-digit increase year over year. And given all the strength that you're seeing in the order book and the great lineup that you have, it does feel a little bit conservative, and I wanted to check if there is any – Any operational reason for it? Or if it's your way of managing the business, the growth?
spk08: I'm still Antonio answering. Hi, Susie. I think I made a comment in my speech already in the previous two calls. We have two elements that are impacting the end of the year. One is mixed, which is a bit less strong compared to the first nine months and the previous ones particularly. The second one is OPEX that are growing and a bit unusually compared to the previous years, and this is also in relation with F1. To the opposite, we see opportunities. related to an uncertain element, which are revenues from the F1 commercial right holders, that we do not put into the numbers. So the result is what we outline now as a guidance.
spk06: Perfect. Thanks a lot.
spk04: We will now take our next question from the line of Michael Binetti at Credit Suisse. Please go ahead. Your line is open.
spk07: Hey, thanks, guys, for taking our question. Benedetto, let me add my welcome to you. I look very, very forward to working with you on the story here over the next few years. I know there's a lot of questions on guidance and everything today, but just backing up very simply, what do you think is the EV opportunity for a pinnacle luxury car company over the next five to ten years? And then on Formula One, Since the business has a lot of overlap there, they've been very clear in the direction of their future power units, sustainable fuels, and hybrid engines they've talked about in the media quite a lot. How do you see the historical strategy for Ferrari of transferring Formula One technology into new road cars evolving over the next five to ten years?
spk09: Hi, Michael. I would start to talk about your first question, how do you see the EV opportunity? I would turn this in, how do you see the opportunity that the new technologies offer to us? Because I believe, and I don't want to repeat myself, but it's really a profound belief I have. I believe that the technologies are really a way to make some unique, distinctive products that delight the customers. So now we are talking about different propulsion scheme that are using, let's say, electrical engine. And this is something for sure is an opportunity for us. And that's the reason why we have been sharing with you partially, not in detail, not yet in detail, our electrification plan. What I would like also to say is that when under the same umbrella, you have also the possibility to take technologies that are made for racing, I think there is a unique opportunity in this sense. And I have to say that in these two months, I have gone, I spent some time with the colleague in the laboratories, and I have seen really something interesting, really something interesting. I'm sorry I cannot say too much, but 16th of June, we will provide more color on this, Mikel.
spk07: And, well, thank you for that. And I guess Let me ask you, what would you say to those in the financial markets early on, since we still have a ways to go until June, that are concerned about a small company's ability to pivot to technologies that have required a lot of investment in other areas like electric vehicle and other non-petro-engine technologies, and the levels of investment it might take for a small car company like this to capitalize on those opportunities?
spk09: I would say only one thing, Michael. I would say that... The solution is to go through partnership. On one side is true we are small. On the other side is also true that we have a stronger brand. In general, and this is also what I did in the other company, I think it's important to leverage at the best the partnership. So it's important that you select the areas where you want to excel, and on the others you work with partners. This is what I believe. is important for financial market to keep in mind. Clearly, if you want to do everything by yourself, it's going to be a challenge. You have to select what you do by yourself and what you do with partners. That's the answer, Michael.
spk07: Okay, thank you very much. Look forward to seeing the new Icona. We'll talk soon.
spk04: We will now take our next question from the line of Philippe Hucqua at Jefferies. This line is open.
spk01: Philippe, we cannot hear you. Maybe you are muted.
spk13: Do you hear me now?
spk01: Yes, now we can. Thank you, Philippe.
spk13: Apologies for that. And welcome to you, Benedetto. Look forward to hearing what you tell us in June. I have two questions. Maybe one, Antonio, can help. There's a discussion around China and this prosperity politics, and every carmaker, expensive cars or cheap cars, tells me no problem. I know you had record deliveries in China again. But do you see on the ground any risk to your business plan in China? Not selling cars, but maybe the upside you were expecting in China over the next few years to be reduced as a result of this shift in politics. And the second question for you, Benedetto, maybe is on kind of building a bit on what Thomas asked at the beginning in your selection process and what your roadmap, your brief is from John Elkann at Ferrari. I look back on Ferrari, it's the ultimate compounding business. And your predecessors have always talked about being custodians of the brand. And I'm just wondering, in your discussion with John, how much of your job is to be a custodian and how much of it is to be a disruptor, you know, within the limits, of course, of the fact you need to keep building on the history. But I'm trying to kind of understand your roadmap and how much of a rupture I'm waiting for from you in Ferrari.
spk09: okay i take this one philip thank you i take the last one and then for china uh antonio will uh will reply so i like to say the following my my leadership style has been always i would say on the transformational side with a strong focus on the result i think that being a custodian of the brand and being, let me say, innovator on the product side are strictly linked. If you want, as I said in my opening, if you want to develop and if you want to evolve the brand itself over the time, you have to... If you want to be a true guardian of the brand, then you have to follow, to adapt... the product to keep it unique to go through innovation so i think that the two dimensions go go hand in hand and again to be custodian of the brand the guardian of the brand you have to read to interpret the technologies the offer of the technology in a unique distinctive way like ferrarities antony if you want to comment about
spk08: Hi, Philip. On China, for the time being, the orders intake is surprisingly strong. Looking to the future, I think back in 2018, the capital market day, we stated we are not betting on a significant change in or significant development there. So at least for the time being and comparing with our target, Whatever happens there should not be a material drag. All what could come from China compared to what we are used to should be a positive if there is an upside. Thank you very much.
spk04: We will now take our next question from the line of George Collier at Goldman Sachs. Please go ahead, your line is open.
spk02: Thank you for taking my question, and Benedetto, welcome from me as well. I just wanted to come back to the unveilings for this year and also as we complete this five-year business plan. At the beginning of the year, you mentioned there would be three unveilings in 2021, and at Q2, you said you had brought three new models to the market during the quarter with the 296. the 812 Competizione and the 812 Competizione Aperta. So I'm just trying to understand if it was always planned to unveil the next generation Icona this year or whether there's been a pull forward. And also with respect to the 15 new launches between 2019 and 2022, is that still very much what you plan or could that now be 23? On the same tact, you also, back at the 2018 planning stage, said that you expected your hybrid mix for next year to be around 60%. Is that still your best estimate, or are we looking at something lower than that, given the products you've presently launched? Thank you.
spk09: Okay, coming to the first question is, did you plan for this launch of Dicona? I think... Here the answer is very simple. We decided during the year to launch the Icona in November, mostly because we saw a strong willingness and need. I would say the customers were so eager to get a new Icona, so we felt the responsibility. in front of them to satisfy, to accommodate their request. So that's the reason why we pushed, we anticipated, let's say, this fourth launch. This is about it. Coming to the percentage, the split by proportion, I would avoid to give any split, how much is hybrid, how much is ICE. What I can tell you is that we are proceeding according to the plan. While for the future, for the year to come, we will present a very clear path forward with all the color and the detail during our next Capital Market Day.
spk02: Great. Thank you. And very much looking forward to that event next year. Thank you.
spk09: Thank you, George.
spk04: We will now take our next question from the line of Martino de Ambrogio, Equitasim. Please go ahead, Alanis, open.
spk10: Thank you. Good afternoon, everybody. Also, from my side, welcome, Benedetto. And the first question is for you. So what's your feeling, your opinion? What is the maximum level of volumes in order to preserve the exclusivity of Ferrari? And the second, because I heard a lot of opportunities around, I agree, but what are the main risks you perceive apart from capital spending, capex spending, which is for sure a big issue going forward? And the last question is on the down payment. Just to know what's your assumption in the current free cash flow guidance for the current year? concerning the down payment for the A12 Competizione and could the down payment become a habit for more models of what you used to have in the past, so also for mid-range instead of just super luxury cars?
spk09: So, Martino, I will leave the down payment of this to Antonio, and I will comment later about the volumes and opportunity risk.
spk08: Very quickly, the down payments on the A12 Competizione are close to what we expected for the year, and as I said, they came in faster than we anticipated. Close to 80% of the Total working capital positive change in Q3 was due to the advances on the A12 Competizione. We remain with a bid for Q4. As to whether this may become usual for the future, still early days to say. So far it has been for some special series and it was significant as you witnessed for the Icona and is now visible for the A12. We are obviously from time to time reviewing our policy in respect of collections from our customers and dealers. So we'll get back to that in the future.
spk09: So coming back to your question of volume and opportunities, for the volumes I would like to underline again, Martino, that we have been and we will be profit-driven, not volume-driven. Clearly, I mean, we will continue to make unique, to develop unique and distinctive Ferrari in a way that we can justify and we can also have a clear path forward. When it comes to opportunity and risk, yes, I said several times in the opening speech that I see a lot of opportunities. that depend on different technologies. And I really believe it. Clearly, when you have opportunities, there are also some risks. But I would say that this is the beauty when you are on the leading edge to do something unique, something new. And there is also a way, let me say, to manage some risk because you can, let's say, or through partnership, as I said before, or also avoiding to go along multiple paths, okay? So the risk, managing the risk when you have different opportunities is, I would say, is an art that you learn just by doing, and I think here I can contribute with my personal experience and with all the experience the team has. Okay, thank you, Benedetto.
spk04: We will now take our next question from the line of Steven Reitman, Associate General. Please go ahead, the line is open.
spk00: Yes, thank you, and also welcome, Benedetto. I have two questions. I guess, first of all, to Benedetto, given your background, what is your assessment of the technical competence of Ferrari in technology, electronics and the like, that obviously you're very well-versed in? My second question regards the issue of the A12 Superfast. You mentioned that the V12 mix was down because of lower sales of the A12 Superfast. Does that reflect the lifecycle? I mean, obviously, you launched the competition version. Or is it also maybe switching some customers to the SF90 family? Thank you.
spk09: Thank you, Stephen. I take the first part. uh i would like to share to reply this question sharing my experience here that is more i think it much giving much more color than say just sentences i have clearly one of the first laboratory i've seen with the the technical team has been the laboratory where new innovation are used and i have to say that Maybe the best adjective I can use is to say that I've been impressed by the knowledge the team has on the technical side, but also, as I said before, by the passion to make things happen, and also by the excellence in the way they want to push ahead the things. I can tell you that, as you can imagine, I have a pretty deep network in this field, and I remember some practical cases where I was opening some channel late in the evening, and the day after in the morning, the team was already on top of it and was able to keep the discussion with this top leader I put in touch with at a very high level. So the competence assessment that I have with this team is very high because of what they know, but also because of the passion and the excellence They want to push. So it's very positive, Stephen.
spk08: On your question in respect of the A12 superfast, your assumption is correct. We are approaching the end of life cycle. Not yet there, but volumes are clearly going down in line with our plans for that model.
spk01: Thank you, Sara. I think now this ends our questions. And I'll now hand over to Benedetto for his final remarks. Thank you very much.
spk09: So thank you. Thank all of you for all your time, for all your questions. Really appreciate and also for your warm welcome. Let me just close by repeating again the words I used in my opening speech. That is passion, excellence and innovation. every day and in everything we do this is ferrari nothing less than that i believe that when you will come here you will really brief ferrari and i look forward in futures to many more occasions to talk with you and also to to meet and to share our progress to get your question and for you to experience in person what we are creating here good afternoon everyone and thank you again
spk04: This concludes today's conference call. Thank you for participating. You may all disconnect.
spk00: We're in the greatest, probably most challenging energy crisis we've been in in 50 years.
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