Ferrari N.V. Common Shares

Thank you, Roberto, and welcome to everyone who is joining us. Today, we plan to cover the Group Q2 2023 operating results, and 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 Piccapicon. All relevant materials are available in the investor section of the Ferrari corporate website, and at the end of the presentation, we will be available to answer your questions. Before we begin, let me remind you that any forward-looking statements we might make during today's call are subject to the risks and uncertainties mentioned in the safe harbor statement included on page two of today's presentation, and the call will be governed by this language. With that said, I'd like to turn the call over to Benedetto.

Thank you, Nicoletta. Thank you, everyone, for joining us today. I would like to start by thanking told the women and men at Ferrari for their passion, dedication, and sense of belonging. Without them, without their agility and nimbleness, the exceptional result of the past quarter would not have been possible. Grazie. Definitely, Q2 was a quarter dense of many positive milestones on all fronts. Four. Four are the key messages of this call that Antoni and I intend to pass to you. One. record high exceptional results driven by product mix and personalizations. Stronger than expected personalization lead us to increase the full year guidance on all fronts. Two, our order book remain stunningly high across all geographies and the full product range thanks to robust order intake. Three, the geographical pattern of our shipment in the last quarter, as in all the other quarters, reflects our deliberate allocation plans along the controlled growth trajectory and are not at all correlated with the respective market track. In the first semesters, our shipments grew by 4% year over year, with all regions up. A remarkable 14% up of mainland China, Hong Kong and Taiwan, a 7% up of the Americas. Fourth, we are on track with our product strategy and carbon neutrality journey. So now let's start from our exceptional second quarter earnings. And I'm very pleased to highlight the following three key data, revenues, at nearly 1.5 billion euro, up 14% versus the prior years. Even more remarkable in light of shipments substantially flat year over year. Adjusted EBITDA is about 590 million euro with a 40% margin. Industrial free cash flow generation at approximately 140 million euro. Interesting to note that it took us only six months to surpass the €1 billion EBITDA threshold, while it took the entire 2017 to pass that same level. A result that everyone at Ferrari contributed to reach. Beyond these strong financial results, in the quarter there were other important milestones which deserve to take the spotlight. Racing world first. Sunday afternoon, June 11, 2023, was an unforgettable day for Ferrari. 58 years after our last participation, we returned to victory in the top class of the WEC with the podium at Le Mans on the centenary of the world's most famous endurance race. A few days later, we were paraded through the streets of the city here in Maranello and in our factory, we celebrated the victory with the 499P team, all Ferrari colleagues, our partners, and our enlarged community. Why is it so important for all of us to celebrate this victory? Because once again, it testifies to the effort and the willingness to always push the boundaries of technology and innovation. Racing is our heritage, and more than ever, It is a stimulus to further innovate. It's the will to progress that we always need to keep alive. It's the inheritance of our founders that we need to nurture constantly with confident humility. With the same spirit, we started a few months ago the F1 Championship, but with a competitiveness level below our expectation. In some recent races, such as the last one of last weekend in Spa-Francorchamps, we saw some sign of improvement. Clearly, we want to keep improving and we are working day and night to make our cars more competitive. Now, let's talk about sports cars and in particular about our newly born Special Limited Series SF90 XX Stradale and Spyder. Derived from SF90, They have more than 1,000 horsepower, are amazingly beautiful, embed the recently patented extra boost vehicle dynamic feature directly derived from Formula One, and they use radical new aerodynamic solution, including a fixed rear spoiler. The last time we saw it on a Ferrari was in the mid-90s with the F50 supercars. Apart from these unique technical features, I also like to underline the strong client traction, and in fact, both of them were already sold out to our most loyal clients prior the official unveil. The extremely positive reaction to these two launches is the most recent signal to the strong desirability of our brand. Further indicators to that are, firstly, the enthusiastic reception to our exceptional product offering led by the Roma spiders, and Puro Sangue, which commenced delivery in June as planned. Secondly, the very robust order book in all geographies, further consolidating the visibility that we continue to enjoy well into 2025. Thirdly, the overall persisting dynamism of the Ferrari pre-owned market, which translates into sound residual values. And last but not least, the impressive attendance level to the world of Ferrari experiences, where, as we said during last Capital Market Day, we want to focus our attention more and more in the future. Indeed, in the quarter, we organized the three highly engaging activities with our community to further strengthen the bonds. The tribute to Le Mans in France, Universo Ferrari in South Korea, and the cavalcade in Italy. The Tribute to Le Mans took place with 40 crews together with Casa Ferrari, a dedicated and exclusive hospitality which saw over 500 clients, dealers, and partners enjoy the race over the long weekend. It was also the stage for the launch of the Hyper Club. What is it? It's a three-year program limited to 100 memberships already sold out that gives privileged access to the 24 hours of Le Mans, its on-track facilities, and the 499P race team. This is the first time we launched such a club, and this successful reception is a confirmation of the goodness of our strategy to enrich the experience we are offering to our clients. And now, Universo Ferrari. Universo Ferrari is an immersive exhibition showcasing the world of Ferrari. In June, beginning of June, we brought Maranello to Seoul. It was the first time it opened its doors in Korea, hosting more than 3,000 people, spanning from clients to fans. I attended it, and I could experience personally the desirability of our brand in a country where we increased our deliveries three times in the last five years and where the average age of our client is well below 40 years. For the cavalcade, instead, approximately 120 Ferraris come from all over the world to Rome. The event ended with a charity auction for initiatives to educate young people, one of the pillars of Ferrari's ESG activities. All the proceeds from the auction will go to Save the Children to support educational projects in a local school. It's very important for us to thank the local communities that host our events. We also continue tirelessly to improve the efficiency of all our processes. In Q2, we wanted to play our part in inspiring a wider change with three additional steps aiming to reach carbon neutrality by 2030 as we committed during last capital market day. The first one Since May, we have the first engine built from 100% recycled aluminum in our foundry, a prototype that we are currently testing. The second, we are on track with the construction of the building. We are completing the walls, and we are ready to start to install the equipment in September to be up and running in June 24th. as committed during the Capital Market Day of June 2022. In two years, the entire building will run on renewable energy. Last but not least, we hosted over 60 sponsors and partners at our first sustainability workshop, a chance to discuss carbon reduction projects acting as a catalyst for change. And now, switching gears to the lifestyle, I like to underline that we continued to execute against our strategy with a nimble approach and we saw encouraging a sign to award our vision. Le Mans was the perfect stage for a Ferrari shop in the fun zone with an enthusiastic response from client In Le Mans, we also recorded an increase in average tickets at our corner boutique in Casa Ferrari as we saw in Rome with our cavalcade clients. Lastly, our museum performed extremely well with a plus 34% year-over-year traffic presence increase in the first six months. And now I will leave the stage to Antonio to enter into the earning details.

Thank you, Benedetto, and good morning or afternoon to everyone joining us today. Starting on page four, we present the highlights of the second quarter results, which show a robust progress of the year. In fact, as we guided last time we spoke, the second quarter of 2023 was very strong, sustained by a continuing remarkable business performance with a rich product mix and highly personalized products. There were also positive timing effects and other occurrences which contain our net operating expenses in the quarter and brought to the exceptionally high percentage margins that we report. Therefore, with shipments basically flat versus the prior year, revenues were up more than 14% and adjusted EBDA increased roughly 32%. adjusted EBITDA and EBIT margins reached 40% and 29.7% respectively, leading to an adjusted net profit margin of 22.7%. On this basis, we have decided to upgrade our guidance for the year on all metrics, as we'll discuss in a few minutes. On page five, you can see the details of the Q2 2023 shipments. As mentioned by Benedetto, in the quarter, we continue to serve a very high order book with deliveries which rebalance the first semester and in line with our volume, geographic, and product mix strategy for the year. Thus, we draw EMEA up double digit versus the prior year, while deliveries in Americas, mainland China, Hong Kong, and Taiwan, and the rest of APAC ended up being lower compared to Q2 2022. Shipments in the quarter were mainly driven by the 296 GTB, the Roma, and the Portofino M, while the 296 GTS and the A12 Competizione were in ramp-up phase. The allocations of the Daitrona SP3 continued as planned, and we commenced the first deliveries of the Puro Sangue. As we continue to execute on our electrification journey, the hybrid weight on total deliveries has further improved, reaching 43% more than doubled compared to last year. On page six, you can see the walk of our group net revenues, growing 12.8% at cost and currency. The growth in cars and spare parts was driven by a richer product mix sustained by the Daytona SP3 and the A12 Competizione family, as well as a continuing very strong contribution from personalizations and pricing. Personalizations mainly sustained by carbon look and liveries offering, 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, new sponsorships, and the contribution from lifestyle activities mainly led by entertainment and retail. Engines revenues declined in line with the reduction of supplies to Maserati as the agreement gets closer to its maturity. Currency has a positive impact, mainly following the US dollar dynamics. Moving to page 7, the change in adjusted EBIT is explained by the following variances. Volume flat and reflecting the quarterly allocations plan. Mix and price strongly positive for 94 million euro, driven by the richer product mix sustained by the Daytona SPT and the A12 Competizione and the SF90 families, the increased contribution from personalization and pricing. Industrial and R&D expenses grew 36 million euro, mainly due to higher depreciation and amortization. And once again, I want to flag it, continuing cost inflation, partially offset by quarterly specific lower Formula One expenses, neither of technology related government incentives. As G&A were negative for 15 million euro, mainly reflecting the company's digital infrastructure and organizational development, as well as marketing activities. Other was positive for 54 million euro, mainly reflecting the combined effect of higher commercial revenues from better prior year Formula One ranking, and the lower cost due to the revised Formula One in-season ranking assumptions. New sponsorships, higher contribution from lifestyle activities, and a positive adjustment to car environmental provisions due to market conditions. The total net impact of currency was positive for €20 million. Based on the just listed items, we reached an exceptional EBITDA margin of 40%. Excluding the mentioned timing and other positive effects, the EBITDA margin in the quarter would have been anyhow the highest of the year and slightly above our full year guidance. Turning to page 8, our industrial pre-cash flow generation for the quarter was solid at €138 million, reflecting the increased profitability, partially offset by a negative change in working capital, provisions and other, mainly linked to the increased inventory value, both in relation to the yearly production planning and to the richer product mix. As flagged in the previous quarter, our inventories will remain high throughout the year, to preserve our agility to manage the steel complex dynamics of our supply chain. Capital expenditure for 198 million euro in line with our product and infrastructure development and consistent with a full year target of approximately 850 million euro. Net industrial debt at the end of June was 331 million euro higher compared to March 23. reflecting our capital allocation strategy. We paid €328 million in dividend, in line with our increased dividend policy, and €83 million of share purchases in the quarter, €359 million since the 2022 Capital Market Day. To conclude, on page 9, we upgrade the 2023 guidance as thereby described. This is essentially driven by the trend of personalizations that we are confident will continue stronger than originally anticipated and higher raising revenues from sponsorships and commercial, albeit to a lesser extent. We consider all of this net of the inflationary pressure that I mentioned also for the quarter and which leads us to confirm our percentage margins for the full year. The very robust results we presented today, together with the continuous strong momentum we are enjoying, truly give us further confidence in the execution of our business plan. With that said, I turn the call over to Nicoletta. Thank you.