Ferrari N.V. Common Shares

thank you sandra and welcome to everyone who is joining us today we plan to cover the group's q1 2023 operating results and the duration of the call is expected to be around 60 minutes to this call will be hosted by the group ceo mr benedetto vina 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. With that said, I'd like to turn the call over to Benedetto.

Thank you, Nicoletta. Thank you everyone for joining us today. I would like to start by thanking all the women and men at Ferrari for their passion and dedication, which have been essential in navigating the first months of this year. Without the tireless effort of all of them, from first to last, the strong result we present today wouldn't have been possible. I have no doubt. The current technology transition is creating a continuously evolving landscape. From my experience and having managed some technology transformation in the past, I have learned that being agile and nimble is key to success. These two qualities underpin our strategic plan and the progress we are making are perfectly on track with respect to what we presented at the Capital Market Day almost one year ago. In particular, I would like to comment on two elements extremely important for our future growth. The building, the e-building, and our differentiated product offering. Let's start with the e-building. It grows taller and taller every day we come to office. This will be the home of our internally developed strategic electric components and it will grant us a higher degree of production flexibility for our hybrid and full electric models. And now, the differentiated product offering. Today, it includes ICE and hybrids whose deliveries weight doubled in the quarter, reaching 35%. Moreover, in line with plans, we will soon add to the family our full electric model tailored to address our current client needs. As we have done throughout our history, we will exploit new technologies to the utmost to enhance our sport cars' driving skills. And we will do it in our own distinctly uncompromising way. We want to give our clients greater freedom to choose the right type of power strain. So we welcome the commitment at European Union level to allow the adoption of e-fuels. We believe that ICE still has an important role to play also in a carbon neutral world. And together with our partners, we are studying and evaluating solutions that will contribute to decreasing CO2 emissions. As Ferrari, moreover, We have a unique advantage because in 2026, our Formula One cars will begin to use 100% sustainable fuel. And this means that we will continue to develop technologies on track and later move them to road. E-fuels can already power our current internal combustion engines. While the production of E-fuels will receive a boost from the recent European Union decision, I see many questions and doubts about their cost and availability. Although I can understand this question, I'm a firm believer in the power of technology innovation. I have learned from experience how initial difficulties in a new technology can be overcome as you learn how to optimize the process. This will be true for both electrification and e-fuels. We will therefore continue to execute our product strategy detailed during the Capital Market Day with the highest determination. As we move towards our objective to reach carbon neutrality by the end of this decade, we also want to play our part in setting an example and inspiring wider change in the energy landscape. While we continue to improve the efficiency of our manufacturing processes and increase the share of solar energy use, we work also beyond the walls of our plant. As such, we recently announced the creation of a photovoltaic plant serving the newly created renewable energy community of Fiorano and Maranello, which is the first one in Italy ever promoted and supported by a company for the benefit of its local territory. It will bring a positive environmental and socio-economic impact. Firstly, sharing zero mile renewable energy reduces CO2 emission and thus we can avoid energy losses during the distribution. Secondly, the energy community will grant a tangible saving in energy bills for its members being citizen, institution, commercial activities and factories. And the Renewable Energy Community Initiative is complemented with the introduction of fossil-free, hydro-treated vegetable oil on the tracks of our most relevant logistic partners in Europe, substituting the use of diesel and abating up to 80% the CO2 emissions. Now, let's talk about our strong first quarter results that I'm sure you have already noticed on the projected chart. I'm very pleased to highlight the following three key data. Revenues at €1.4 billion, up 20.5% versus the prior year. Adjusted EBITDA at nearly €540 million, with a 37.6% margin. industrial free cash flow generation at approximately 270 million euro our order book already extends into 2025 on the back of a continuously strong demand we have just opened the order collection for the newly launched ferrari roma spiders and today we are also pleased to announce the long awaited reopening for the Puro Sangue with deliveries due in 2026. Far more testament to the strength of demand for our cars is the continued dynamism of the Ferrari pre-owned market, which translates into sound residual values. The enthusiasm of our clients is also expressed by their attendance level at all our events. In March, the Ferrari cavalcade attracted over 80 Ferrari vehicles, and this on a 1,000-kilometer adventure through Morocco, culminating in the unveiling of the Ferrari Roma Spider. This latest model from Maranello is a timelessly elegant, high-performance car with a contemporary take on the chic, pleasure-seeking Italian lifestyle of the 50s and 60s. What makes it so striking is the adoption of a soft top, a solution making a welcome return to the prancing horse range on a front-engined car 54 years after the launch of the 365 GTS4 in 1969 that many of us have seen several times in the Miami Vice TV series. I'm also proud to state that Ferrari has won three prestigious awards. The first one related to Puro Sangue. It has been named the Red Dot Best of the Best in the Product Design category. The second for Ferrari Vision Gran Turismo voted the Red Dot Best of the Best in the Innovative Product category. And the third one is the Red Dot for the 296 GTS, Maranello's first Spyder powered by a plug-in hybrid V6 engines. And what about motorsports? The racing year has just begun with mixed results so far. 2023 will be the Formula One longest ever season. And as we did in the first four races, we will continue to fight race by race with ambition and humility. Attention to details, focus and continuous learning will be key as the season unfolds. In October 22, we unveiled the 499P, our Le Mans hypercar. And this March, at 1,000 miles of Sebring, it led Ferrari's return, after 50 years, to the top class of the FIA World Endurance Championship. The three podiums we won in Sebring, Portimao, and Spa-Francorchamps are confirming we are competitive. And with humility, we will continue to learn race by race. We all eagerly await our return to Le Mans in June, a milestone for endurance racing and an experience we will share with our clients and our fans. But before leaving motorsport, I would like to remember that Spa-Francorchamps has been a special race for us because The Ferrari team that won with our 488 GTE was composed by two men and one woman. Lilou joined us a few months ago, and it has been the first time in FIA World Golf Championship that the women won a race. And this, together with our equal salary certification and the Girls on Track program, underlines our strong commitment on the diversity and inclusion side. But 2022 was important for the increased expression of our brand into lifestyle, which we are continuing to nurture with the fourth fashion show that took place in February during the Milan Fashion Week. It generated a strong positive coverage from the press and key opinion leaders. I like also to underline the incredible reception of the brand new exhibition, Game Changers, that is on display since February 18 at the Museo Enzo Ferrari here in Modena, that together with the one in Maranello, registered record level of visitor attendance in the first quarter. More than 100,000 people, more than 1,000 people per day. Also, our thematic parks are experiencing record levels of visitor attendance sustained by the introduction in January of Mission Ferrari, the world's most immersive mega-coaster and the last addition to the Ferrari World Abu Dhabi. Before handing over to Antonio to review Q123 earnings in all the detail, I'd like to conclude saying that these first months of 2023 have been another significant step on a journey during which we will continue to execute our strategy with commitment, focus, and determination. Antonio, please, the stage is yours.

Thank you, Benedetto, and good morning or afternoon to everyone joining us today. Starting on page four, we show the highlights of the first quarter results, which represent a very strong start to the year. with revenues up more than 20% versus the prior year, and adjusted EBIT, adjusted EBITDA, adjusted diluted EPS growing more than 25%. In particular, revenues came in at 1 billion and 429 million euro, adjusted EBITDA at 537 million euro, and adjusted EBIT at 385 million euro. with remarkable percentage margins at 37.6 and 26.9 respectively. Adjusted net profit at 297 million euro with an adjusted net profit margin of 21%. And finally, strong industrial pre-cash flow of €269 million, slightly lower compared to the prior year, which was sustained by the advances collected on the Daytona ST3 and the A12 Competizione A. Turning to page five, you can see the details of the Q1 23 shipments, which were up 9.7% compared to the prior year. The increase was mainly driven by the Ferrari Portofino M, the 296 GTB, and the A12 Competizione. In the quarter, we commenced the deliveries of the 296 GTS and the A12 Competizione A, while the F8 Tributo reached the end of its lifecycle. The Daytona SP3 was in ramp up in the quarter, with lower deliveries compared to the Monza SP1 and SP2 last year. As already highlighted by Benedetto, you see that in Q1, we doubled the hybrid versus last year, reaching 35% of total deliveries as we roll out the allocation of our four hybrid models. As customary, the geographical allocation was deliberate and reflected the pace of introduction of new models. As such, American and mainland China, Hong Kong, and Taiwan posted double-digit growth versus the prior year. On page six, you can see the walk of our group net revenues growing 18% at cost and currency. The growth in cars and spare parts was driven by higher volumes, a richer product and country mix, a strong contribution from personalization, as well as the price increase on selected models and markets that we communicated last year. Personalizations were widely spread among the portfolio, and stood at 18% in proportion to revenues from cars and spare parts. Sponsorship commercial and brand reflected the better prior year Formula One ranking and the contribution from lifestyle activities mainly led by museums, visitors, and retail. Engines revenues declined in line with the reduction of supplies to Maserati as the supply agreement gets closer to its maturity. Currency has a positive impact, mainly following the US dollar dynamic. Moving to page seven, the change in adjusted EBIT bridge is explained by the following variances. First volume, positive for 28 million euro, reflecting the shipments increase versus the prior year. Mix and price, strongly positive for 85 million euro, driven by higher personalizations whose contribution exceeded our projections. The richer product mix compared to the prior year, led by the A12 Competizione and the SF90 families, as well as the decreased weight of the F8 family. Positive country mix in absolute terms, sustained by Americas and mainland China, Hong Kong and Taiwan. as well as the already mentioned price increases. Industrial and R&D expenses grew 47 million euro, mainly due to higher depreciation and amortization and raw material cost inflation, which is visible. The latter, together with the larger share of shipments to China, is containing our percentage gross margin, which anyway remains slightly above 50%. SG&A were negative by 22 million euros, reflecting marketing and lifestyle activities, obviously centered around the Roma Spider unveiling in Marrakech and the fashion show in Milan, as well as our organizational development. Other was almost in line, mainly reflecting the better prior year Formula One ranking and the higher contribution from lifestyle activities. the total net impact of currency was positive for 28 million euro. Turning to page 8, our industrial pre-cash flow generation for the quarter was strong at €269 million, reflecting the increased profitability, partially offset by a negative change in working capital provisions and others, mainly linked to the increase in inventory value, both in relation to the running volumes and the richer product mix. Our inventories will remain high throughout the year, also to preserve our agility in a context where the fluidity of the supply chain is not yet fully restored. Capital expenditure for 150 million euro in line with our product and infrastructure development and consistent with the full year guidance to end up higher compared to last year, up to 850 million euro. In the quarter, the capitalization ratio of our development expenses was 43%, increased versus the prior year as we entered the development phase on a number of future models and per effect of the budget caps imposed on the spending in Formula 1. Net industrial debt at the end of March was 53 million euros, decreased compared to December 2022, reflecting the solid industrial free cash flow generation, net of the share purchase program. It is also worth mentioning that during the quarter, we completed the refinancing through new bank loans of the bond maturing for 390 million euros. And this allows to successfully diversify sources and tenors while keeping a stable and safe level of total liquidity. To conclude, on page nine, we confirm the 2023 guidance, which targets solid growth and consistent progress in profitability. Looking at the development of the year, as we see today, we directionally expect a strong Q2, followed by a softer tail in H2, and particularly Q4, in line with our planned product cadence. In essence, and to conclude, we keep on executing flawlessly according to our strategy, thanks to the passion and enthusiasm of everyone here in Ferrari and with all of our partners. With that said, I turn the call over to Nicoletta.