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Operator
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.
benedetto vina
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.
Nicoletta
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.
Operator
Thank you, Antonio. Sandra, we are now ready to open for Q&A.
Antonio
Thank you. As a reminder, to ask a question, please press star 1 1 on your telephone and wait for your name to be announced. To withdraw your question, please press star 1 1 again. We will now take the first question. It comes from the line of Suzy Tibaldi from UBS. Please go ahead. Your line is open.
Suzy Tibaldi
Good afternoon. Thanks for taking my questions and congratulations for another strong quarter. um the the first question on uh just to go back to something you just mentioned if i heard correctly you said that you expect now h2 to be a bit weaker and especially q4 um i think previously you were flagging that this year was going to be a little bit more h2 weighted so can you just explain like what has changed because if we look at the mixed progression q1 definitely was weaker than what we should be expecting for the rest of the year because you're going to have a ramp up in Daytona, in the specials, and some of the higher value cars. So can you explain the moving parts there? And then my second question on the Puro Sangue, super impressive that you are already taking orders for 2026. I was wondering if you can share a bit more qualitative comments from your customers and also whether you are seeing demand from customers also for a hybrid version? Thank you.
benedetto vina
Lucy, ciao. I'll take care of the second question, the prosangue, and the first one, Antonio, will come back to you. So, the prosangue, we decided to reopen the order starting in 2026 because we see that, let's say, there was, as we told you last time, there was a collection of expression of interest from many customers. At the beginning, when we launched the cars, we were not expecting such strong, let's say, reaction from the clients. So we had to put a little bit of stop to organize ourselves so that we could reopen properly. So there is no change in our strategy to keep this Puro Sangue at always lower than 20% of our annual volume. This is very, very important to underline. What we see is that the clients are positively surprised because it's a really unique car that gives you the feeling, the people start to try it, to give the feeling of a sport car with the roominess that usually a sport car is not able to provide because it's smaller. So this is the decision we took and we wanted to share with you and the rest of the world today. because I think it's very important. And if you want, also make us a little bit proud to make something that is highly appreciated by our client. For the first one, H1, H2, relative weight, I leave it to Antonio that he can explain.
Nicoletta
Thank you, Benedetto and Susi, for the question. I think probably I was a bit imprecise back in the call of February because I said that margins would have improved during the course of the year, which is correct actually. Nothing changed compared to that. It's simply that I forgot to mention at the time that Q2 would have been the strongest quarter as it is, as we see it today. And then, of course, there are refinements of allocation by country and by product, depending throughout the various months. So there is nothing more than a better visibility or more precise planning of our product delivery during the course of the year.
Suzy Tibaldi
Okay, understood very clear. But when it comes to the mix, it's fair to assume that Q1 was, let's say, the weakest quarter, the softest quarter of the year in terms of mix. If we just think about the phasing of the models that are coming, so we've got the Daytona, you've got the Specials, and you have lower weight of F8. So in theory, the mix from here should improve.
Nicoletta
Yeah, you're right. That's definitely what we see today.
Monica
OK, thanks. Thank you. We will now take the next question.
Antonio
It comes from the line of Giulio Pescatori from BNP Paribas Exxon. Please go ahead. Your line is open.
Giulio
Hi, thanks for taking my question and good afternoon, everybody. So the first one, just I need to follow up on the guidance because it's just not clear in my head. So you had a first quarter margin, especially on the EBIT level, way above the guidance, almost 100 bps above the guidance. And now saying the Q2 will be better. I understand that there will be maybe a slowdown in Q3, Q4, even though It's not really clear in my head why that would be the case given the Daytona and Porosango. So I'm just trying to connect all the dots here. What am I missing? Why 26% EBIT margin is still the right target for this year? Then the second question on the cash buybacks, you're very close to being in a net cash position. I think in the past you clearly said that you don't want to be in a net cash position. Why not stepping up the buyback? Should we expect you to be more focused on the buyback program going forward? given that cash flow should also accelerate in the second part of the year. And then the last question, I remember in the past having too long waiting list could wait on your customer demand because some customers are not willing to wait three years to two years plus to receive delivery of the cars. So is that an issue? At what point does it become an issue? And if it does, will you be forced to accelerate the the phasing of deliveries compared to your initial plan.
benedetto vina
Giulio Benedetto taking the question and then I give the first to Antonio. The waiting list, clearly if we say we reopen the order in 26 is because there is a strong interest and I can tell you that there is no trend in order cancellations that we see from the customer. can share you with these things. Yesterday I was having a dinner. There was a guy that was 58 years old and he is planning for making himself a gift when he turns 60. So it's perfectly in line with our plan to reopen the order. So we don't see client, let me say, canceling the orders because of the time. They are considering it already. So this is the question about the waiting list. And for the other two questions, I hand over to Antonio.
Nicoletta
Thank you, Giulio. And I'll try and help you connect the dots, if possible, on the first question. First, there is not just the sports car pillar. So when looking at our, let me call it, intra-quarter seasonality, you also need to take into account the unfolding of the expenses of your businesses, which is basically what we have at R&D OPEX. That's an element, obviously, in driving the profitability in each single quarter. And then there are other elements when you look at the development of the EBIT margin, you need to take into account also the development of depreciation and amortization, which is not linear over the course of the year. but start and unfold as we start producing the model that we then deliver. So that explains this very strong Q1 EBIT margin compared to the guidance for the full year. And I think the comment I made before may help explaining why Q2 is so strong. We see it relatively stronger in relative terms. The second question with respect to cash and the fact that it might end up being and that that's positive. I would think with Capital Market Day, we clearly communicated that we have a program, a buyback program of 2 billion that has been executed in line with the generation of cash. We have an initial plan that we are going to complete soon. And then obviously, as the time unfolds, we define what to do next. Hope this helps.
Giulio
Yeah, it does. Thank you. So can I just follow up on the initial question on waiting lists and orders? If I remember correctly, at the time of the CMD, one of the assumptions you made in the targets for 2026 was that demand was going to normalize. Based on what we're seeing today, is that still a fair assumption?
benedetto vina
Yeah, I think we see this. We don't see any big variation, either in terms of execution, either in terms of assumptions we made for the capital market day.
Monica
Okay, thank you. Thank you. We will now take the next question.
Antonio
It comes from the line of Stephen Reitman from Societe Generale. Please go ahead. Your line is open.
Stephen Reitman
Yes, good afternoon. Thank you for taking my question. Again, on the first quarter, obviously, the very strong print you made on the EBIT margin. Obviously, we were kind of like guided towards this would be a weak quarter from a sort of mixed perspective. But obviously, you started now selling the 296 GTS, which has got a substantial price increase over the F8 Spyder, which it replaces. So are we beginning to see now an impact of your moves on increasing prices on your serial cars? And you started this with a 296 GTB, and obviously, the range you know, M, that it replaces as well. And secondly, just a question also about the mix, because I thought that looking at your geographic mix, it wasn't particularly helpful having China being such a big growth part of that, because obviously we know that it's high revenue, but when we take into account the taxes, I understand that the contribution it makes to the overall group margin is negative, or is a headwind. So if you could comment on that, please.
Nicoletta
Antonio, would you take? Sure, Stephen. As I think I already commented in the past, we don't look at the margin on each single model, but rather at how these models are priced in their own positioning. And obviously, we try and adjust prices on models that are newly introduced or were in advance to the time of delivery. to our clients. So it is a gradual move, this one. And then we should not disregard the fact that even the cost base is changing from time to time. Inflation has not come to an end anyway. We see it visible. And by the way, the need of our margins, that's an element of attention also for the rest of the year. So the guidance is also predicated upon this assumption. The other question was, I think, in respect of I'm sorry. Mixed. Yes. I'm sorry. The stronger mix happening on EBIT margin and China not visible. The fact is the positive element that I mentioned in my comment before is that actually personalization came in much better than we would have expected. And this almost entirely offset the negative impact of China on our percentage margin. So while when you look at the absolute margins, China is positively contributing, as I mentioned a number of times, This is not the case when we come and look at the percentage margins, but the negative impact in the quarter has been offset by the level of personalization and the margins we earn on that.
benedetto vina
This has been extremely important, Stefan. This is a part of the personalization. It's been really, really, really important. We see this trend that helps us a lot. Thank you.
Stephen Reitman
And we can expect a big pickup as well when you have your new paint shop, when you have your new paint lineup as well.
benedetto vina
Yeah, that's true. That's also what we said when we met. When we talk about personalization, we talk about painting. That is something that you do in the last step of the manufacturing. You talk about the rims. You talk about the trims in the cars. So this is very, very important. And we care a lot about personalization because it's a way to make the Ferrari more and more personal. And in our luxury industry, this is key. It's key for us. experience we deliver to the client it is also key to make this car more and more unique and let's say to to to deliver the the unique experiences that the client are looking for thank you very much thank you we will now take the next question
Antonio
It comes from the line of Martino D'Ambrogi from Equita. Please go ahead. Your line is open.
Martino D'Ambrogi
Thank you. Good afternoon, everybody. One more question on the puro sangue. You reopen the orders for the strong demand. Does it mean you could revise the volume guidance of up to 20% of total volumes? Maybe not in the short term, but in the long term. And on... the first quarter. Could you tell us the number of Daytonas you delivered and what should we expect for the ramp up of the Puro Sangue in the next few quarters? And if I may very, very last on the mix effect, because it's a mix of region, products, personalization, prices. Could you roughly split the price mix contribution very, very, very roughly? Sure.
benedetto vina
Okay, Martino, Benedetto. So thanks for this question. Let's start from the puro sangue. So we are starting, let me say, to deliver in next quarter. Clearly, there is a ramp-up phase. We will keep growing quarter over quarter, more or less at ratio two, quarter over quarter. This is the volumes that we will keep delivering in terms of increase. We do not plan to extend the life of the cars versus what was originally planned. This reopening of the order was done because, as I said, we were caught by a positive surprise for this strong interest. So we wanted to make sure that everything, we want to put a little bit the situation, if you want, under more control from an industrial point of view. So there is no extension, not at all. This is the first question. The second was about Daytona. Well, we delivered the third in Daytona. The third one that you are asking, the split between the geography product, I understand your curiosity. I would do the same question, but I would also understand if you would not reply to me with the exact split. What I can tell you is what I said to Stefan and also Antonio said, we see a positive trend in the personalization increase. I think this is in line with the trend also we see in other luxury industries that our client want to have more and more personal rich car. I mean, already our Ferrari were pretty much, if you want, each Ferrari is different from others, but now they're becoming even more different, if you want. And this is something that we experienced it. positively in the last two months of the quarter.
Nicoletta
And if I may, do not disregard the fact that keeping OPEX, meaning selling and general expenses and R&D expenses at a growth level, which is lower than revenues, obviously adds to the quality of the margins, finally. So we're very careful in these aspects.
Martino D'Ambrogi
Okay, customization was 18% last year, so in Q1 was how much?
Nicoletta
Personalization in class was 17%, right? Yes, 17. 18% this year.
Gianluca Bertuzzo
Okay, thank you.
Monica
Thank you.
Antonio
We will now take the next question. It comes from the line of Monica Bosio from Intesa San Paolo. Please go ahead. Your line is open.
Monica Bosio
Thank you and good afternoon, everyone. Once again on the personalization, just a curiosity, on which models did you see the higher requests in personalization? And should we assume that the personalization rate trend of the first quarter will keep going over the next quarters? I'm asking this along with another question. It's on the different evolution in the deliveries to China. Do you expect a different evolution across the year or the deliveries will be equally distributed across the different quarters in China? And another question is on the cost. I read on the press release that the company is running the renegotiation on the Labrador Coast. I was wondering if you just can quantify if we have some increases over this year and the next one. And the last question is more general on the batteries. In 2025, the company will launch the electrified Ferrari. Can you share with us your view on the different materials of the batteries if you are evaluating any solutions that look more suitable for Ferrari than others? Any insights would be useful. Thank you very much.
benedetto vina
Thank you, Monica, for your question. There are four questions. I will take the first and the last. I will leave Antonio to elaborate a little bit more. Okay. let's start from the last one so that it's fresher the story of the battery the battery the chemical element if you want that we are using more or less are the same is the chemistry that is a little bit more specific to our needs and what i can tell you that there are two dimensions that we are following to optimize our batteries one is the energy density another one is the power density So we don't have a single chemistry. We have a different kind of chemistry, a little bit more tailored for our needs, considering the two vectors of energy and power. And as I said at the beginning, we are on track with our plan that we shared with you the 16 June last year. The first question, which is the trend you see? We don't see any specific trend by models. We don't have also any specific trend by countries. it's a let's say really it's very much personal like i was telling you the our clients are making more and more personal the the ferrari the one they they want to drive and the one they want to to live so this is the the question to the the answer to the two question for the china split and the labor cost antonio can be a little bit more specific on this yeah
Nicoletta
Hi, Monica. On China, our deliveries to China, Hong Kong, and Shanghai, our deliveries in the course of the year are more or less a bit less than 10% of total deliveries. And in terms of distribution by quarter, the first and the third quarter are the ones that currently are a bit more loaded than the other two. Don't take it for granted because we may have slight changes in the allocation, but it's more or less directionally how this should develop over the course of the year. And the last one is labor cost. We are not engaged actually in completing the negotiation. So it's an 11% increase on a cumulative basis over 2023 and 2024, which is impacting this year in the region of 6%.
Monica
And this obviously is in the numbers. Thank you. We will now take the next question.
Antonio
It comes from the line of Thomas Besson from Kepler Chevrolet. Please go ahead. Your line is open.
Thomas Besson
Thank you very much. It's Thomas from Kepler Chevrolet. I have a few questions as well. Is it possible for you to confirm over how many quarters you plan to deliver the data now to your lucky customers? That would be the first question. Or broadly, say differently, how many units we should expect per quarter in 2023-2024? Second question, there was a bigger tailwind from Forex than I was expecting in the first quarter. Is it still the main scenario to have something broadly neutral for the year, or do you think we should now see a positive Forex boost in 2023? You mentioned e-fuels as a positive element for you over the mid-term as it gives you the opportunity to offer various kinds of power train solutions to your customers in the mid-term. Could you share with us what is the initial thinking about the long-term proportion of vehicles that could stay with that kind of
benedetto vina
portrait mode in 15 20 years time or is it still way too early to discuss okay okay Thomas so the first one the number of the tone per quarter will be more or less between 30 and 40 the second I think the third one the effects Antonio will elaborate the third one is about the fuel well last year before our capital market day we fought extensively on this on this point because we we believed already at the time that the ice can there is can can deliver still a lot of things i mean there is a lot of way to go so that is why we said if you remember that in 26 and 2030 we were always having in mind and we shared our plan what is our offering in terms of ice The recent decision of the European Union about e-fuel is very much welcomed by us. If you want, it's a confirmation of the goodness of the strategy that we shared with you last year. So we have no change. We have no change. The reason why last year we presented the debt split between the different proportions was because, based on our experience, Let's say the transition, the technology transition, especially when they touch the energy side, are not digital. It's not something that can come from one day to another. It takes time. So we are very, we welcomed a lot the decision of eFuel because this can, is a further substantiation of our strategy.
Nicoletta
Antonio, about the Fx. Yeah, on the Fx. I think, obviously, take it with the benefit of all of us living in a world of significant financial volatility. If the spot rate of US dollar to euro remains more or less where we are today, we expect this to remain to have more or less a neutral impact year over year. Obviously, it depends if the euro becomes much stronger this could be an assumption to be reviewed. Thank you very much.
Antonio
Thank you. We will now take the next question. It comes from the line of Adam Jonas from Morgan Stanley. Please go ahead. Your line is open.
Adam Jonas
This is Matthias here on behalf of Adam. So China, Hong Kong, and Taiwan hit 11% of deliveries this quarter, and we know that you got to do some front-loading of that in the region, but just curious how you see this heading into 2025 based on your forward book. Thanks. Thanks.
Nicoletta
May I take this one? Yeah, go, go. Okay, on China, I think this quarter has been rather front-loaded, meaning we had a chunk of deliveries to China which has been comparatively higher within, let me say, sort of target for the year of about 10% of total deliveries to that region. When looking at the future years, I think we stated already at the Capital Market Day that we expect our shares of deliveries to China to not exceed significantly the 10% mark.
benedetto vina
So it's a quarter that is fully in line with our strategy. Yeah.
Adam Jonas
Great. Thank you so much.
benedetto vina
Thank you.
Antonio
Thank you. We will now take the next question. It comes from the line of John Murphy from Bank of America. Please go ahead. Your line is open.
John Murphy
This is actually John Babcock on the line for John Murphy. Just one question. Could you talk about the opportunity you have to take up price on your vehicles?
benedetto vina
Opportunity to take up prices? Look, it's a good question. As we said through all the year and last year and what we are doing now, we are... we said that we were going to increase mid-single digit selected model, and that's what we are doing. So we saw this opportunity, and we are using it. So I think it's also important that we value properly what we are offering to our client and they fully understand it.
Tom Narayan
Okay. Thank you.
Monica
Thank you.
Antonio
We'll now take the next question. It comes from the end of Tom Narayan from RBCCM. Please go ahead. Your line is open.
Tom Narayan
Hi, yes, Tom Narayan, RBC. Thanks for taking the questions. So hybrids were 35% of shipments in Q1. Curious if you could talk about the demographics of these customers, you know, age or, you know, are they new to the brands? Just curious if there's any read-throughs as we can think about your electrification path ahead. And then just a quick follow-up on the Pura Sangwe relaunch in 2026. Could the pricing be raised? I know the initial pricing, given the strong demand, it would suggest you could raise it. Just curious if the pricing could be raised. And then lastly, a follow-up on e-fuels. You know, one hurdle potentially for e-fields is the infrastructure needed, right, for fueling, et cetera. Curious if you could share any comments on how you think that might develop. I know that the EUs or governments are definitely supportive of it, but certainly it would require an investment there. Thank you.
benedetto vina
Okay. So, Tom, thank you for your question. Let's start from the demographics of the hybrid. This is something that we are looking carefully because we are also interested to understand what's happening. And I can tell you that any quarter we will look at these numbers and we don't see there a specific pattern. So we have, if you want, we have the same client that is buying the hybrid and ICE. We have a client that entered the Ferrari world through the hybrid and then they buy the ICE or vice versa. And also, if you see the pattern across the continents or across the age, we don't see a real pattern. So this is a very interesting question that we are always making ourselves. We wanted to report in this quarter this important target, basically 35% of them are hybrids. We also check the average age of the clients, the bi-hybrid or the red or the yellow in the chart that Antonio was presenting. There is no difference. So this is the first question. The second question is the Purosanque. Today we said that we are reopening with deliveries in 2026. Usually we do not comment about the price increases so long in the time. You can make your own assumptions. but we do not want to disclose specific on this on this point the last one maybe i misunderstood your question but the e-fuel is something that can fit in our engines as it is we are already doing a test with different kind of fuels that are not fossil derived The infrastructure is the same. Clearly, you have to produce it, so you have to combine the CO2 of the atmosphere with the hydrogen coming from the waters. But infrastructure is the same. An area where we are working a lot together, our partners, is to make sure that in case there is a clear mandate to recognize the e-fuel, because you need to feed the e-fuel in the cars. Well, we need to work, and we are working already with partners to make sure that the e-fuel is properly recognized versus the fossil fuel. There is really no modification required in the infrastructure.
Tom Narayan
I guess I wasn't referring to your infrastructure, but more of the fueling infrastructure, you know, petrol stations, et cetera.
benedetto vina
It's the same, Tom. In the production of the fuel, there is a difference because you don't have to dig a hole in the earth to take the oil, but you have to, let's say, like fertilizers, you have to take the CO2 from the atmosphere. But there is no difference in the distribution network.
Tom Narayan
Okay. Got it. Thank you.
benedetto vina
Thank you.
Antonio
Thank you. We will now take the next question. It comes from the line of Anthony Dick from OdoBHF. Please go ahead. Your line is open.
Anthony Dick
Yes. Hi. Thanks for taking my question and correct for the great results. Just a couple of follow-ups on my side, firstly on the Daytonas. Could you actually give us the number of Daytonas that were delivered in Q1 like you did previously for the Monzas? And also when you talked about the ramp up of between 30 to 40 units, is that sort of the maximum capacity that you can produce? Is that just the way that you wanted to sequence these deliveries? And then a second question follow up on the personalization rates. Again, as we should see a ramp up in Daytona deliveries, do you expect to maintain that 80% personalization considering the much higher ASP on these cars? Thank you.
benedetto vina
Okay, so, Anthony, the first question, Daytona, we delivered in Q1. We said before it's 30. We keep staying in the quarter around 30, 40. This is, let's say, consider it in our case, the line is pretty much flexible. And this is flexible either in terms of equipment that you need to produce the cars, but also in terms of ability of our employees to manage different kinds of steps. So there is no relation with maximum capacity. And the last point, the personalization rate. Maybe here I can provide a little bit more colors that will help you and the previous colleague that made this question. One big change we need in the personalization rate is that we enriched the carbon look components that are available to our clients. So if you want, there are more options. Available for our client that are carbon look and usually if you want the carbon component are more expensive than than the others but These are the three I think you address all of them the three question you get you give us Yes, perfect.
Monica
Thanks very much. Thank you.
Antonio
Thank you We will not take the last question and It comes from the line of Gianluca Bertuzzo from Inter Monte Sim. Please go ahead, your line is open.
Gianluca Bertuzzo
Hi everybody and thank you for taking my question. I want to jump back on the price mix. On a full year basis, do you expect mix or price to be the biggest contributor in terms of growth for the average selling price? And a second one, On the Daytona, I don't want to anticipate too much, but do you expect there will be a time lag between the current Daytona and the next one, as it was the case between the SP1 and the SP3, or it will be a smoother transition? Thank you.
benedetto vina
Okay, this is the last question, so we split 50-50 between me and Antonio. Okay. So Antonio will take the price and mix. Price mix, the answer is mix. So you were very fast. No, I think, look, we gave you, I understand that you want to have all the possible detail. So as we said, 30-1, 30-40 more or less in the next quarters. we are planning this production according let me say to what is also the which are the needs of the clients also in terms of personalization okay because there are a lot of carbon look component that are very important in this in this car model and if your question was for the period
Nicoletta
after Daytona, please wait and use it all.
benedetto vina
Secrecy is important Gianluca. We have to, desirability is very important, so we have to.
Gianluca Bertuzzo
Of course. And very last one if I may, what is your assumption in terms of cost inflation for this year? Thank you.
Nicoletta
I take this one. It's difficult to mention percentage-wise. Anyway, I would say I single digit. But it's really a mix of components. Last year, we have seen energy and metals being the beginning of the year. Nowadays, these two components are not anymore the most relevant. Inflation is going through a number of commodities and products and components. And on top of that, labor cost is adjusting. That's an assumption we'll see.
benedetto vina
Last year, we saw more on energy side that is easing down. Down now, while this year, we see suppliers suffering a little bit more on the labor cost impact. That obviously has a delay of one year.
Gianluca Bertuzzo
Thank you very much, Benedetto. Thank you very much, Antonio.
Nicoletta
Thank you. Thank you.
Antonio
Thank you. I would like to hand back over to Benedetto Vigna for closing remarks.
benedetto vina
Thank you all. Thank you for the time you spent with us today, and also thank you for your interest. The first quarter of 2023 represents really another strong start to a very robust year. And we look ahead with, I think it's clear from the question and the answer, we look ahead with enthusiasm, energy, agility, and also the confident humility that I think is always required when you are in challenging times. And having said this, I wish all of you a good afternoon, and thanks a lot for your time, for your question, and for your attention, and meet you in a quarter time. Thanks.
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