Ferrari N.V. Common Shares

for a discussion on their contribution to sustainable innovation, which is increasingly central to our supply chain. And then a weekend was dedicated to Ferrari's employees, their families and friends, A record presence of more than 30,000 people visiting our factory. Such a great emotion. I spent there the full Saturday, and it was for me the first time. And I will never forget this beautiful, unique experience. And during that intense week, we also inaugurated the new E building, where E stands for energy, evolution, and environment. And based on the concept of technological neutrality and flexibility, this new facility will house the development and production of ICE hybrid and full electric models. Here, let me remark once again our belief. We believe that there is no single solution to future automotive powertrains. And this is particularly true during the current technology transition. Technological neutrality is a key principle for us, and consistent with our strategy, and we continue to invest in the three power trains. In telecombustion engine, hybrid, and full electric, to provide our client with maximum freedom of choice. In V-building, we will also engineer and handcraft the strategic electrical components that are highly relevant to differentiating Ferrari's technology and performance. high-voltage batteries, electric motors, and axles. Indeed, the full electric Ferrari requires new technologies, new components and processes, and e-building will enable us to keep our critical know-how in-house and maintain our competitive advantage in the years to come. The advantages of new e-building do not end here. It will also enable us to decouple, people-wise, the production of limited edition cast, such as Daikona, from the development of new models. And this will allow us to place the research and development team closer to manufacturing, shortening the product development phase and time to market. And here, I would like to be very clear on one point. We did not realize the building with the aim of growing our volumes. our ethos remains the same quality quality of revenues over quantity on june 21 we completed the skeleton rebuilding and installed the equipments now we are focusing on testing the processes and debugging the lines to start production of hybrid and ice models from the beginning of 2025. for this achievement a special thanks goes to all the colleagues We've been able to maintain the building schedule despite all the difficulties that we experienced during these times. It has been not easy, but they made it happen by acting nimbly with focus and determination. During the quarter, we made further progress both in racing and lifestyle, creating stronger cohesion across our company's three souls. Let's start with the racing world. In our second season in the top class of the World Endurance Championship, we achieved an extraordinary success with our 499P at the 24 hours of Le Mans. And this is the second Le Mans victory for our repercussions. This outstanding result deserves huge praise and is a testament to the exceptional teamwork of all colleagues and their perseverance. The same spirit and will to progress is vivid among our Formula One team. Scuderia Ferrari HP approached the 2024 Formula One season with the aim of always fighting at the front. We entered the summer break with encouraging signs. We scored two wins versus zero last year and 50% more points per race compared to last year. The team remains focused and united and is pushing hard to continue to improve the performance of the cars. Our recent racing and sports car events have also been the perfect stage to gather our most loyal clients and showcase our lifestyle dimension. And this brings me on to my last point for today. We have recently been much more deliberate about including our lifestyle collections at our exclusive events and sharing our latest creations with our community. The successful activation in Pebble Beach and Las Vegas last year were a first step. This year, at the beginning of May, we took a further step forward. We organized a series of engaging and unique experiences in Miami for our community. These encapsulated the elegance of our sports cars, the allure of Ferrari lifestyle, and the excitement of racing. This was more than just hosting events. It created a coherent, coordinated, and inclusive narrative across each of our three souls. A similar approach was also taken during the most iconic endurance race at Le Mans, with the creation of a pop-up store at Tower Casa Ferrari, which received very positive feedback from clients, resulting in improved sales and encouraging signs for the future. We are aware that Ferrari is an incredible, powerful, and unique brand, being extremely exclusive on one side when you think of our sports cars, at the same time being very inclusive. If you think of our racing DNA and the millions of T4C and brand enthusiasts that we inspire all over the world. Among them, during the Formula One Grand Prix at Imola, two Ferrari enthusiasts had a once-in-a-lifetime opportunity to spend the night inside our iconic museum in Maranello, which was the setting for a unique Airbnb stay and experience not usually available to the public. We were able to create this activation by leveraging our existing assets our museums in maranello in modena and here for the first time we passed we passed the threshold of 100 000 visitors in may alone the fiorano restaurant and our historic cavallino restaurant to conclude this second quarter of 2024 has been full of significant milestones And I believe this achievement marked the continuation of our journey as we are driven on by our will to progress and the drive for excellence in everything we do. Always, always keeping four wheels on the ground. And on this note, I hand over to Antonio to review the Q2 2024 financial results.

Please, Antonio. Thank you, Benedetto. And good morning or afternoon to everyone joining us today. I'll start on page six, where we present the highlights of the second quarter. Continuing the trends from the first quarter, the growth rate of revenues and profitability outpaced that of our deliveries, mainly thanks to the enriched product mix and increased personalizations. Therefore, while shipments grew by less than 3%, revenues were up 16%, adjusted EBIT up 17% with a 29.9% margin, adjusted EBITDA increased 14% with a 39.1% margin, and such economic results led to a remarkable industrial free cash flow generation, despite higher capital expenditure and tax payments. Moving to page seven, We review our shipments for the second quarter, which increased by 92 units. As already mentioned by Benedetto, we leverage our order book visibility and production flexibility to design our product allocation across the different regions consistently with the developments observed in each respective market. As a result, deliveries increased in EMEA, Americas, and the rest of APAC, while decreased by roughly 60 units in mainland China, Hong Kong, and Taiwan. The increase in deliveries was driven by the Puro Sangue, the Roma Spider, and the 296 GTS. Additionally, we commenced the first deliveries of ESF90XX Stradale, the special series hybrid with a limited production run of 799 units. The allocation of the Daytona SP3 grew in the quarter compared to the prior year, but were lower than in Q1, in line with our plans. The shipments of the Roma and the Special Series A12 Competizione decreased, approaching the end of their life cycle, while the SF90 Stradale and the A12 GTS phased out. In the quarter, the hybrid share reached 48% in line with product cadence and mainly driven by the 296 GTS. On page 8, you can see the net revenues bridge, which shows a 19% growth versus prior year at constant currency. The increase in cars and spare parts was the most relevant contributor, driven by the richer product mix and country mix, as well as higher personalizations. In the quarter, personalization further strengthened at almost 20% of total revenues from cars and spare parts, mainly supported by the Puro Sangue and Daytona SP3. Sponsorship, commercial, and brand increased thanks to new sponsorships related to our racing activities and improvement in lifestyle. The increasing sponsorships reflect the latest sponsor's additions, including HP, as the new title sponsor of Scuderia Ferrari in F1. Other revenues were almost flat, with the improved contribution from financial services activities substantially offset by the Maserati contract expiration. Currency, net of edges in place, has a negative net impact, mainly due to the adverse dynamics of the US dollar, the Japanese yen, and the Chinese yuan versus the euro. Moving to page nine, the change in adjusted EBIT is explained by the following variances. Volume, positive and reflecting the unit's increase versus the prior year. Mix and price strongly positive thanks to the robust product mix sustained by the Daytona SP3 and the few 499P modificata saved, the increased contribution from personalizations, and the positive country mix mainly supported by the increased weight of the Americas. Industrial and energy expenses were almost flat in the quarter. As DNA increased and reflected marketing and brand investment and the ongoing development of our digital infrastructure and organization. The events we held in Miami and Le Mans exemplify our brand investments perfectly integrating the sports car, lifestyle, and racing souls. HADER was almost flat in the quarter. The increased contribution of a new sponsorship and a new release of car environmental provisions worth approximately 10 million euros were mostly offset by higher costs for racing, also due to better Formula 1 in-season rankings. Lastly, the total net impact of currency was negative for 35 million euros. As a result, the EBITDA margin stood at 39.1%. As a reminder, the exceptional ABDA margin of 40% in Q2 2023 was supported by certain timing and other positive effects, which in part took place also this quarter. The EBIT margin reached 29.9% and benefited from flat-ish depreciation and amortization compared to the prior year as a result of the production cadence of current models. Turning to page 10, In the second quarter, our industrial free cash flow generation was 121 million euro, reflecting the increase in profitability, partially offset by capital expenditure that are higher than last year and in line with the pace of development of our product, as well as of the new infrastructure in Maranello. As previously mentioned, capital expenditure this year are progressing more linearly compared to our usual cadence, due to advanced development of the product pipeline and the ongoing spending for the new paint shop. Tax payments and an increase in networking capital provisions and other, primarily driven by higher inventory, which reflects both our production plans and the enriched product mix. And the end of June, the company was in a net industrial debt position for 441 million euro, since the dividend payment and the share repurchases occurred in the quarter more than offset the positive industrial pre-cash flow. Moving to page 11, we revised upward the 2024 guidance, mainly to reflect the improved visibility on stronger personalization, following the very solid results of the first six months. We are also projecting higher and the expenses for racing and other innovation activities as well as for marketing and brand initiatives for the rest of the year. This leads us to confirm the EBITDA margin target for the year while upgrading the EBIT margin to reflect the operating leverage on DNA. The improved EPS also reflects the new estimate on the tax rate for 2024, now in the region of 19.5%, which benefits from the temporary coexistence of the two different patent box regimes. The strong profitability also turns into higher industrial free cash flow, notwithstanding the increased phase of our capital expenditure above the initial 950 million euro target. also reflecting the updated timeline for the new paint shop, which has been accelerated compared to our plans as per the last capital market day. To sum up and focus on the second half of the year, we therefore expect a positive product mix, even though to a lesser extent compared to the first half, given the lower Daytona deliveries in line with our plans, the mentioned increase in R&D OPEX and SG&A, and IRDNA in line with the start of production of new models and the digital infrastructure. With respect to the quarterly pace, we confirmed the already flagged software Q3, intentionally designed in terms of volume, model, and country mix allocation to ease the whole company in its transition to the new ERP, the enterprise resource planning software for order collection, production, and sale management that will go live at the end of August. To conclude, the financial results that we present today underscore the solid fundamentals of our business and a flawless execution. Such results and the visibility that we enjoy give us renewed confidence to sustain this positive momentum and keep on delivering on our commitment. I thank you for your attention, and I now turn the call over to Aldo.

Thank you, Antonio. Ivan, we are now ready to start the Q&A session.