Ferrari N.V. Common Shares

Good day and thank you for standing by. Welcome to the Ferrari 2023 Full Year Results Conference Call and Webcast. At this time, all participants are in listen-only mode. After the speaker's presentation, there will be a question and answer session. To ask a question during the session, you will need to press star 1 and 1 on your telephone. You will then hear an automated message advising your hand is raised. To withdraw your question, please press star 1 and 1 again. Please note that today's conference is being recorded. I would now like to hand the conference over to your speaker, Nicoletta Russo, Head of Investor Relations. Please go ahead.

Thank you, and welcome to everyone who is joining us. Today, we plan to cover the Group's full year 2023 operating results and 2024 guidance, 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 Piccapiccon. 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, and thank you, everyone, for joining us today. 2023 will be remembered as a year in which we accomplished many achievements and we strengthened our brand across each of its three souls, racing, sport cars, and lifestyle. For this, I would like to thank all the women and men of Ferrari for their outstanding work, all our clients for their continuous trust in our brand, and all our partners, suppliers, dealers, and sponsors with whom we have continued to strengthen our relations. Among the many achievements realized in 2023, I'd like to mention three. The first, the historic victory at Le Mans. The second is the five new model launches, further enriching our beautiful product offering, together with a variety of new clients' engagement experiences. And last but not least, the new iconic bag, a Maranello clutch, that stands out to the cooperation between colleagues in Maranello, belongs to Sport Car Team, and those in Milan of our lifestyle department. These achievements are reflected in our record full-year financial results across all metrics. So let's start reviewing together a few key numbers of year 2023. Revenues were at approximately 6 billion euro. EBITDA at 2.28 billion euro with record yearly EBITDA margin of 38.2%. Net profit, first in our history, well over one billion euro threshold with a remarkable net profit margin of 21%. And industrial free cash flow generation of approximately 930 million euro, of which about 800 million euro distributed to shareholders between dividends and share by debt. And now, after the numbers, let's deep dive into our racing activities. Winning the 24-hour early months was an unforgettable day for our history. I was there. I will never forget June 11 afternoon because it saw our victorious return to the top class of the World Endurance Championship on the centenary of this legendary 24-hour race. The Ferrari 499 piece win was a true team effort. Every area, every area of our company worked together to contribute to our hypercar success. And I'm really proud of everyone. As we say, we are and we act as one Ferrari. In Formula One, we fought till the very last race, even though the last season has been a difficult one, often short on satisfaction. We know we must continue to work tirelessly to return to the level that our T4C rightly expect of us and we look forward to it. The continuous will to progress and strive for excellence in racing and everything we do, testify our effort and our willingness to always push the boundaries of technology and innovation audaciously. This leads me to the achievements we reached in our sports cars. In 2023, we unveiled five new models out of the 15 models announced at 2022 Capital Market Day. Three models for the road, the Roma Spider, the SF90XX Stradale, and the SF90XX Spider. They all raised the bar of technology and design still far to meet and exceed the desires of our clients. And two models for the track, During the Finale Mondiale at the Mugello Circuit last quarter, we unveiled the 296 Challenge and the 499P Modificata, both of which will set new benchmarks in tracks driving trails for our most passionate racing clients. Consistently and coherently, we follow our strategy of different Ferrari for different moments, different Ferrari for different Ferrari states. These years, we continued to engage with our clients with many experiences on the road and on the track. I refer to unique and truly engaging locations, such as the Finale Mondiale, our cavalcades, the legacy tours, our legacy tours, to mention just a few of them. These are all experiences which continue to bond our community even further and evoke a true sense of belonging. These exclusive events enable our clients, our tifosi, and enthusiasts to interact with the brand and live experiences together. 2023 has been a year of learning for our lifestyle activities, which have shown positive indicators, among which improved retail performances, successful activation in conjunction And this is really key in conjunction with racing and brand events and record museums visitors. In fact, 740,000 brand lovers visited our museums in Maranello and Modena in the years. Almost 20% more people than one year ago, confirming the strength of the brand and the passion of our community. Throughout all the years, Throughout 2023, we have also done relevant progress in our carbon neutrality journey. Indeed, we reduced our scope one and scope two emission by 7% in 2023 and by 16% versus 2021. We built our first prototype engine from recycled aluminum. We also installed solar panels providing an extra 2.4 megawatt peak power compared to last year an additional one megawatt peak power will become available in the coming months from the renewable energy community the first ever energy community in italy to be baked by an industrial company for the benefit of its local area and this is only this is only one demonstration of the moral obligation we feel to give back to local community. All of these developments, as well as the record result, have been possible thanks to the passion and dedication of all my colleagues. And to reward their achievement in line with the company's strong performance indicators, I am pleased to announce the yearly competitive award of up to nearly €13,500 for all our employees. We are also proud to mention the additional four welfare initiatives that we have announced at the last November 13th. A broad-based shared ownership plan for our 5,000 plus employees, the extension of health checkups, the parenting support, as well as the 250 new eyes. On top, we have also received the Equal Salary Certification on a global level for the first time. A result we can all be proud of. 2023 was characterized by global tensions, geopolitical conflicts, supply chain disruption, and cost inflation, all challenges we have learned a lot from. Our flexibility, our agility, together with the constant support of our clients and partners, allow us to look at 2024 with confidence. Such confidence also derives from the positive momentum that we continue to experience. Notwithstanding the current challenging macroeconomic environment, the vitality of our business is once again confirmed by the order book on current models, which remain strong across all geographies and covers the entire 2025. During last month, I've been visiting several dealerships. in Europe, USA, and different countries in Asia. And I can tell you that the traction of our brand is really strong. You can really breath it. When you meet our clients into the dealership and you see how they interact with our dealers, you can easily understand their strong attachment to our brand. Our dealerships are a great point of aggregation for our clients and events organized by our dealers help to give a boost to the spontaneous aggregation of our loyal clients. The residual values remain sound, with different dynamics in the region and normalizing from the peaks registered in the post-pandemic period when a lack of new product boosted them. The visibility granted by the order book gives us the confidence to look at the future, but at the same time, we need to keep always four wheels on the ground. Confident humility and will to progress have been, are, and will be our North Star during the execution of our business plan. Following an initial phase of our business plan characterized by revenues and profitability expansion, in 2024, we continue to grow our top line while consolidating percentage margins, which we expect to further expand toward the end of the current business plan. The record result of 2023, the exceptional visibility on our order book and the extraordinary performance of our business allow us to look at the high end of the 2026 target with strongest confidence. But beyond the cold numbers, what to expect in 2024 from us? In race day, Power D&A, we will compete at the top in Formula 1 and Endurance. We have recently confirmed the World Endurance Championship team, and in Formula 1, we have reinforced the technical team and expanded the manufacturing area, which is already up and running. And during the last weekend, we won 24 hours of Daytona in GTD Pro Class with our 296 GT3 cars. Definitely a great start to the 2.96 career. On top, we've just announced that we are expanding our presence in the racing world with the intention of setting records also by racing on the seas of the entire world. In sports cars, we will inaugurate the eBuilding in June, exactly two years later than the last Capital Market Day. We will further enrich the product offering with three new model launches, and we will continue to enhance our client experiences, both on track and on road, not only on brand new cars, but also taking care of Ferrari's pre-owned models with tailored events. In our history, we crafted about 250 different models of Ferrari, and for us, they are all equally important. They are all our kids. Lifesize in 2024 will be the year of progress with an array of activities designed to build the scale while elevating and expanding its ability. Among our priorities, we continue to focus on our carbon neutrality journey, which is further boosted by the ultimate goal to shut down the three generators within the next 18 months. We look ahead at 2024 with energy, agility, and confident humility, but above all, with enthusiasm for the new exciting challenges in front of us. And now I hand over to Antonio to review the 2023 results and 2024 guidance.