Ferrari N.V. Common Shares

Good day and thank you for standing by. Welcome to the February 2024 full year results conference call. At this time, all participants are in a 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 1 on your telephone. You will then hear an automated message advising your hand is raised. To withdraw your question, please press star 1 1 again. Please be advised that today's conference is being recorded. I would now like to hand the conference over to your speaker today, Nicoletta Russo, Head of Investor Relations. Please go ahead.

Thank you, Sandra, and welcome to everyone who is joining us. Today we plan to cover the Group's full year 2024 operating results and 2025 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 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 risk 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 good morning and afternoon everyone. 24 has been another remarkable year for Ferrari, full of milestones, unforgettable memories, and the continued growth of our brand across each of its three souls, racing, sports cars, and lifestyle. Over the last years, we successfully continued to execute our business plan. We did significant progress in both the development of our infrastructure and our product offering. On the infrastructures, the E-Building, inaugurated last June, is up and running, and we also accelerated the construction of the new paint shop for additional personalizations. On product offering, we are fully in line with our business plan. We launched the three models in 2024. Our supercar, F80, and the two 12-cylinder coupe and Spyder. Our new supercar perfectly embodies our relentless will to progress, and it showcases the significant technology transfer from our racing experience to our sports cars. Indeed, the F80 is equipped with our most powerful engine, a V6 hybrid powertrain directly derived from the 499P that won in Le Mans for two consecutive years. The F80 will be produced in a limited series of 799 examples already fully allocated to our collectors. And it represents the eighth model launched out of the 15 we promised to all of you at the 2022 Capital Market Day. But F80 is not only the pinnacle of our innovation. it also represents a major advancement in our electrification journey now we can claim that our battery modules our electric axles our inverters and electric engines are developed and and crafted in maranello as we told you a couple of years ago the internalization of this know-how represents a big step forward all of this All of this is done in our new e-building, a state-of-the-art infrastructure that grants us forward production flexibility. And flexibility is more crucial than ever in today's current context, and is made even more achievable thanks to the strong relations we have with our suppliers. 2024 has seen excellent financial results with record full-year figures across all metrics. Revenues. Revenues at approximately 6.7 billion euro with double digit growth versus the previous year. Double digit growth also in profitability supported by an extraordinary demand for personalization and favorable product mix with a net profit reaching 1.5 billion euro. And then industrial free cash flow. industrial leakage flow generation surpassing the 1 billion euro threshold for the first time. Everything I've mentioned so far, including the record financial results, has been made possible thanks to the passion, the dedication of all my colleagues, the loyalty of our clients, and the steadfast support from our partners. Grazie to all. The strength of our business is also confirmed by the order book on current models, which is evolved as expected and covers the entire 26 with the Dodici Cilindri coupé and spiders guiding the order intake. The residual values remain sound with different dynamics throughout the region and models. Clearly, we are closely monitoring their trends, and in this respect, on one side, we continue with a wise allocation strategy, and on the other side, we continue to devise even more exclusive Ferrari experiences to further engage our clients. These experiences span from racing days to test drives, from regional premieres to exclusive driving events. This year, we also brought together our three souls, racing, sport car and lifestyle in a series of unforgettable events in Miami during the Grand Prix. Why all of this? Because owning a Ferrari is much more than just owning a car. It's about being part of an exclusive community united by shared passion. The loyalty of our client is testified once again by few interesting data. In 2024, We sold approximately 81% of our new cars to existing Ferrari clients and 48% to clients who currently own more than one Ferrari. The passion is also shared by our wider community and is testified by museums' visitors, which is a new record in 2024. More than 850,000 visitors coming in Maranello and in Modena in our museums. now let's move forward what to expect for this year for 2025 in racing we compete at the top in both formula one and endurance championship we will reinforce the team in the clear winning in sport cars we will further enrich our product offering with six six new model launches Don't ask me anything about the Electrica, the Ferrari model that we will announce in a unique, innovative way, and this will happen in Q4. And throughout the years, we will continue to enhance our client experiences and accelerate the development of our paint shop. And in lifestyle, 2025 will be a year of progress with an array of activities designed to build scale and expand our visibility. All of this All of this is an investment with the ultimate goal being to continue to nurture and elevate our brand. Among our priorities, we will continue to focus on our carbon neutrality goal by 2030. Farber progress was made in 2024 with the shutdown of our highly efficient three-generation plant several months ahead of our initial projection of last capital market day. Since September 24, we are no longer burning methane gas for electricity production and relying increasingly on renewable sources. Thus, in 2025, we expect to reduce by approximately factor three our scope one and scope two emissions compared to the 2021 base years. This again was made possible thanks to the commitment and dedication of all our colleagues, of all Ferrari people. And to reward their achievement in line with the company's strong performance indicators, I'm pleased to announce the yearly competitive award of up to approximately €14,400 for our employees, as well as the confirmation of the Global Equal Service Certification and the newly achieved Italian Certification on Gender Equality. We remain constantly looking forward and before I leave the stage to Antonio, I would like to underline three things about this year. One, 2025 will be another step forward in the execution of our business plan, allowing us to look to the future with stronger confidence since we are even better positioned compared to our initial trajectory. Two, we look ahead with a united focused and well-grounded team ready to embrace the future with enthusiasm and exciting challenges that lie ahead of us. 2025 will also be a great occasion to come together here in Maranello on October 9 for the launch of the Ferrari full electric and to share with you what we envision for our futures. And now I leave Antonio with the results and the guidance for this year.

Thank you. Thank you Benedetto and good morning or afternoon to everyone joining us today. I start on page eight with a quick overview of the highlights of the full year. Twenty twenty four has been a very strong year with all metrics exceeding our expectations and reaching remarkable results. I stand with Benedetto in congratulating the team on their outstanding performance and exceptional work. Revenues and profitability grew double digits, and this with shipments only slightly higher than last year. Product mix and personalizations continued to strengthen. This was combined with a favorable country mix and resulted in an EBDA margin of 38.3%, despite continued inflationary pressure, higher rating expenses, and brand investments. Further leverage on the DNA, in line with the phase-out of several models, enabled us to expand the EBIT margin to 28.3%. Let me also highlight the net profit that reached €1.5 billion and corresponded to a diluted EPS of €8.46, up 22.6% versus the prior year. Such an improvement encompassed nil financial charges and a tax rate of 19.2%, supported by the temporary coexistence of two patent box regimes. The industrial free cash flow generation was very strong and above one billion euro for the first time. This achievement is even more remarkable if we consider that in twenty twenty four our capital expenditure peaked at around nine hundred and ninety million euro. On page nine, we analyzed our shipment for twenty twenty four, which increased by eighty nine units. We had significant changes in our portfolio throughout the year. The shipments of the Puro Sangue, Roma Spider, and 296 GTS grew compared to the prior year, as well as those of the Daytona SP3. We commenced deliveries of the SF90XX family and the dodici cilindri in line with our plans. On the other side, five models phased out. Portofino M, SF90 Stradale, A12 GTS, A12 Competizione and Roma. The hybrid share reached 51% in line with product plans and was mainly driven by the 296 GTS. As customary, the geographic breakdown reflects the different product cycles as well as the company allocation strategy adopted to preserve land exclusivity. As a result, EMEA and Americas were up versus the prior year, representing close to 75% of our total shipments. The rest of IAPAC was almost flat at 17%, and mainland China, Hong Kong, and Taiwan reduced their share to 9% in line with our long-term ambition for this region. On page 10, you can see the net revenues bridge, which shows a 13.4% growth versus the prior year at cost and currency. The increase in cars and spare parts was driven by the richer product and country mix, as well as higher personalizations. Personalizations continue to strengthen and exceeded once again our expectations reaching approximately 20% of total revenues from cars and spare parts, mainly supported by the Puro Sangue and the Daytona SP3. Sponsorship, commercial, and brand increased thanks to the new sponsorship for our racing activities, among which HP as the new title sponsor of Scuderia Ferrari, as well as higher contribution from lifestyle activities. Currencies, net of edges in place, had a negative net impact in the year. Moving to page 11, the change in adjusted EBIT is explained by the following variances. Mix and price, strongly positive thanks to the enriched product mix sustained by the delivery of Daytona and the 13 units of the 499P modificata. The increased contributions from personalizations and a positive country mix, supported by the Americas. Higher industrial and R&D expenses, largely driven by racing and innovation activities. And NSG&A increase, reflecting the continuous initiatives in software and digital infrastructure, organizational development, as well as brand investment. Other was strongly positive thanks to new sponsorship and lifestyle activities, partially offset by higher costs due to the better 2024 Formula One season ranking. Lastly, even in this case, we had a negative net impact from currency. The EBITDA margin was 38.3%, while the EBIT margin reached 28.3% and benefited from the already mentioned Fletish DNA. Turning to page 12, our industrial free cash flow generation for the year was 1 billion and 27 million euro. The tailwind from the strong increase in profitability was partially offset by a negative contribution from networking capital provisions and others, albeit improved versus 2023, primarily driven by an increase in inventory value, mainly due to a mixed and higher trade receivables. higher tax payments, and capital expenditures of 989 million euro, a peak within the current business plan, in line with the advancements in product development and the accelerated spending on the new paint shop. I'd like to highlight that an amount of more than 1 billion euro, very close to the industrial free cash flow generation, was also returned to our shareholders through a combination of dividends and share purchases throughout the year. Finally, the net industrial debt was €180 million at the end of December 2024. Let's move to page 13, where we present our targets as well as the drivers for 2025. Please note that this target sets the floor we aim to achieve. On sports cars, product and country mix will continue to be positive, improving from an already rich 2024 baseline. While the contribution of the Daytona is expected to gradually decrease over the year, the mix will be supported by special series and range models, along with few initial deliveries of the F80 towards its end. Personalizations are expected to grow in absolute terms, though stable around 20% of cars and spare parts revenues. Raising revenues from sponsors and the commercial right holder are expected to grow thanks to the new sponsorship already signed, the full contribution of Title Partner HP, and the better ranking achieved in Formula One in 2024 compared to 2023. Lifestyle activities will continue to increase their support to the top line, accelerating their growth rate while investing a larger share of resources to speed up the pace of development and the expansion of the retailing network. Continuous brand investment, higher racing and digital transformation expenses, as well as higher costs implied by the ongoing supply chain challenges allow us to develop our activities, resulting in a gradual progression of our percentage margins. Given the above, the first half of 2025 is expected to be stronger than the second half in line with the development of the product mix. As for the bottom line, we estimate the effective tax rate to be higher at around 22.5% as we keep on benefiting from the new patent box regime while the previous one has come to an end. The industrial pre-cash flow generation will be sustained by our profitability partially upset by a still negative change in working capital, with new deposits from clients partly upset by the reversal of previous year's advances, tax payments proportional to the development of our income, and capex of approximately 900 million euro, substantially lower than last year. The underlying assumption on the US dollar exchange rate is that it will fluctuate around 105, that would be rather neutral compared to 2024, including edges. And please note that what I've just mentioned relies on the assumption that applicable custom duties stay unchanged. To sum up, today's very strong set of results marks another significant step in our growth trajectory, which we aim at continuing in 2025. Despite the ongoing uncertainty in global scenario, Our unique business model gives us strong visibility, flexibility, and confidence in our future. And we look forward to sharing our long-term vision and strategy at our capital market day on October 9th.

Thank you for your attention and I'll turn the call off. Thank you, Antonio. We are now ready to start the Q&A session.

Thank you. Thank you. As a reminder, to ask a question, please press star, one, one on your telephone and wait for your name to be announced. To answer your question, please press star, one, and one again. We will now take the first question. From the line of Susie Tibaldi from UBS, please go ahead.

Hi, good afternoon. Thanks for taking my questions. I have two. The first one, regarding your model rollout, six new models in 2025. I was wondering, so you are anticipating your guidance by one year. Is that purely on the financial side or also operationally? Because, you know, if you add six models, you get to 14 and you are going to launch 15 by 2026. So it would imply only one in 2026. So on clarification on that and linked to that, do you have any concern that maybe you're launching too many in one year? Because is it not confusing maybe for the customer if we suddenly get so many new models in terms of positioning? And is your focus then in 2026 on reaching new customers again or still to focus on existing customers? So that will be the first question. And then the second question, can you explain how exactly your mix flows through to your P&L? And the reason I'm asking is that in 2023, we saw obviously a big jump in your EBITDA margin, helped by the very strong mix. But arguably in 2024, your mix was also equally, almost equally as good. But the profitability improvement was significantly smaller. So can you give us some clarity on what are really the key drivers of your margin expansion that we should focus on going forward? Thanks.

Okay, Susie, thank you. I take the first one, and then Antonio will go through the mix. So number one, we are always pushing for new clients, okay? And this is true either for, let's say, thermal cars, ICE, or for hybrid cars. You may notice that In 2024 is the first year, if you want, where we had 51% of our cars were hybrid. So we are taking care of the collectors, of the repeaters, but also of the new clients. The second, the doubt that you had about too many models and confusion. Well, we are talking about different kinds of cars. There are cars that are special versions, that are limited, that are cars You may remember that we are doing two kinds of cars, one more for pilots, okay, and one for sport car drivers. So they are clearly positioned according to different kinds of clients we have. Consider that since the beginning, we said we are pushing a strategically an horizontal strategy in terms of, let me say, model we propose. We don't want to do a few model with a lot of volumes because we believe this is a little bit against the desirability and could not, is not compliant if you want with our strategy to become and to be always to become more and more luxury brand. So we said 15, you did well the math, we will reach 14. There is something else left for next year. Next year, we'll update what we are planning to do for the end of the decade in October. So we are talking about new client, existing client. So this is the picture. For the mix, I would like Antonio.

Hi, Susie. When we speak about the mix, we are referring to product mix, including the special series and the strictly limited products. cars in volume, meaning the Icona for the time being, and next the F80, the supercar, then the country mix, and finally the contribution of personalization and pricing overall. So what we have been going through in the last couple of years has been an increasing contribution by all of these categories. As far as product mix is concerned, Clearly, we reached a new baseline this year with the full deployment of the deliveries of the Daytona throughout the entire year, which in 2025 is not as strong as in 2024 because the Daytona will come to its end by the end of the third quarter. Then the country mix is also relevant since we have flagged a number of times now. I don't know if the countries are adding the same in terms of contribution margin. And in this respect, the fact that we're moving the majority of our deliveries to North America and Europe helped compared to the previous situation where China was more relevant. The third one is pricing. Pricing has been particularly visible in 2023 and in 2024 to a lesser extent, since it has been mostly upset by the increasing cost that we have been registering. And in 2025 will be very, very limited and mostly related to some models in some specific countries or some components of our revenues related to the cars, but not entirely affecting the model price. Finally, personalization. Personalization has been the real big new contributor to our P&L. It has been going through a progressive increase in weight from 18% or before 2022 to 19%, 19.5, 23, 24, and now 20%. So that's the real element of news that has been surprising and positively throughout these years. And we expect this to continue in 2025, as I mentioned before. Does it help?

Yes, it does. I guess a lot of these factors that you mentioned on the positive side of tailwinds well, I mean, they were there in 2024, right, as well as 2023. Just the magnitude of the profitability improvement in 23 versus 24 was very different. But I suppose that you answered that by mentioning the cost inflation, the underlying inflation, which was not offset by price in the same extent in 2024.

Yeah, correct.

Understood.

Thank you. We will now take the next question. From the line of Stephen Reitman from Bernstein, please go ahead.

Yes, good afternoon. Thank you. I have a question on pricing first. I took note of your comment that pricing would not have a significant impact in 2025, but I want to focus, apart from on specific models, and one model I want to focus on is the Pura Sangwe. I understand that is actually having some quite significant price increases from the beginning of 2025. Could you confirm that? And secondly, could you talk about also about the 12 cylinder in terms of how you're seeing the customer profile on that vehicle? Is it attracting new customers or is it actually going a lot again to your collectors and people who have more than one Ferrari already? Thank you very much.

Thank you, Stephen, for this question. One, the pricing. Thanks, because you're right. January 1st this year, there is a price increase on Puro Sangue. This was already planned. It was already communicated to you. So there is a, when we said no pricing increase, we said no new price increase. But the price increase of Puro Sangue is planned and is there. Okay, so appreciate it. When it comes to the 12-cylinder, well, we are having good traction on coupe and spiders. I would say today that the order intake is more or less 50-50 on the two models. And there is also a strong trend from new client, prospect and mono buyers. I would say that 40-45%, 40%. 45% is, let me say, sorry, 40, 45 years is the average age of the new client. In how many are the new client percentage-wise, we are talking around something in the range of 20%. So that's very interesting. Also, I want to share with you the age. That is pretty interesting because we see, and I have in mind several of them,

young people as well as new clients that are particularly interested on the 12-cylinder thank you if i could also ask you just have you got any updates on the kind of warranty program you've been offering on the battery that you told us about last year particularly in terms of improving guaranteeing the sort of longevity or the usefulness of the battery in the plug-in hybrid and obviously you'll do something similar on the bv

Another interesting question, Steven. Yes, we launched this warranty in basically September. So in the last four months, we see around 350 people that are buying our additional insurance for a peace of mind. We have different kind of... considers for everyone that this is a warranty that is touching only the hybrid cars. This was talking about high-voltage battery. So we are talking about, as I said, a 350 contract signed more or less in four months. And the reason why they like it is because this is providing them a peace of mind because there is no problem, let me say, in the expiration date of the chemistry of the cell of the battery. It is having good traction, and we will keep monitoring it.

Thank you very much.

Thank you.

Thank you. We will now take the next question from the line of Michael Vinetti from Evercore ISI. Please go ahead.

Hey, guys. Congrats on a great end to the year. My congrats there. Just a quick one. Would you mind telling us how many Daytonas shipped in fourth quarter? And then I wanted to kind of ask you about the shape of that a little bit.

Mike, Antonio is... Yeah, let me check.

Just a second. Well, in the meantime, if you may ask something else, I'm going to retrieve the information.

Okay. I mean, if we assume the Daytonas were... So... Sorry.

Oh, sorry. The number of Daytona is 46. One every two days. One every two days.

I didn't get mine yet. I didn't get mine yet. So at 46, I think if we exclude the Daytona, it's probably the rest of the fleet, the ASP or the car revenues per unit, we're probably up low double digits, maybe 10%. Is that You know, I was interested in your comment, Antonio, that the first half will be stronger than the second half. I think that's a little bit counterintuitive how we were thinking about it. It seems like the ASPs on the rest of the fleet besides Daytona's were up pretty strongly. Is that something we should expect to continue in the first half? And that's what's driving your comment that first half will be higher. And then I guess separately, is there any way you could contextualize how many F80s you'll ship in the fourth quarter year? I know it's the first quarter and it'll be ramping up, but it seems like when you say the first half is stronger than the second half, it'll be very few F80s in the fourth quarter. Is that the right way to think about it?

Listen, I would model it this way. You should assume that Daytona is slightly lower every single quarter from Q1 to Q3. They're going to be down to nearly in Q4. And then the swap between the S90XX Coupe and Spyder with the A12 Competizione is going to grow in the second. It's going to be positive and provide an accretion from Q3 onwards, but not offsetting the negative from losing the Daytona. And the F80 is kicking in in the last quarter, but just a few units. That explains widely the strength of the first half compared to the second.

Okay. Okay. And then if I could just follow up, Benedetto, if you see, you know, concerns about residual values of hybrids around the world across brands dropping a little bit as you guys are on the eve of launching your first EV, does that change your view of what the Ferrari market full electric customer will value the most? You're seeing differences in how consumers more broadly think about those cars going forward?

Thank you for the question, Mike. I think that I like to say in this way, there are electric cars and electric cars. I think that we, since the beginning, let's say when we announced our strategy in June last 2022 we had the clear in mind that when you do something when you use a new technology you have to make a unique way and that's what we are we are doing and we are looking at all the dimensions as we said at that time i don't want to comment on the reason why other electric car may be accepted or not what i can tell you that our electric car as we said will be unique in the sense that we are looking at the different dimensions, the style, the performance, and the driving trails. And we are looking at all the dimensions that are below, that are sustaining the driving trails. So if you want to know more detail, you have to come here to eat the tortellini and to see the electric car in October.

All right. I'll be there. Congrats on a great fourth quarter, guys.

Thank you, Mike. Thanks.

Thank you. We will now take the next question from the line of Monica Bosio from Intesa San Paolo. Please go ahead.

Good afternoon, everyone. I hope you can hear me. I have three questions. One is for Benedetto. It's on the order book in China. I remind that in occasion of the third quarter, you said that the order book in China was at around five quarters. I'm just wondering how is the situation now and if you are willing to change a little bit the strategy also on the back of the tariff environment. In this context, I'm also wondering if we can expect some acceleration in deliveries towards Americas in the very first part of the year. Then the second question is on the residual values. That's something that has to do also with the seven years warranty on the batteries. Can you give us just an update on the residual values trend on the hybrids model? And the very third question is on the R&D for the current year. If you can share with us some indication, Antonio. Thank you very much.

Thank you, Monica. So one order book in China, you remember well, we said the five quarters and we stayed today five quarters. And we do not intend to do any acceleration of sales to U.S. or wherever because of duties or what. So we go ahead with our plan without no acceleration. Two, residual values. The trend of residual values is different from the different regions. and different models. What we are doing is that where there are some countries like UK, for example, where we are limiting the shipment of the cash and where we see that the warranty that Stephen was asking about is being used.

So this is the first question. For R&D? On R&D, Monica, it's going to be around 8% of revenues. pretty much in line with 2024. So not a big change there.

Okay. Thank you very much. It may just follow up. It's just a housekeeping question. The first alpha will be stronger than the second alpha. The price mix will change between the first and the second part of the year. I can imagine that volumes will keep low double digits. Can I imagine a different... a different trend in volumes between the first and the second part of the year, or should be more or less as the previous year?

Thank you, Monica. Pretty much equally distributed in terms of volume. And in terms of the main driver for H1 being stronger than H2, I just mentioned, so I don't think there is anything else significant to flag.

Okay, thank you very much. Thank you.

Thank you.

Thank you. We will now take the next question from the line of Anthony Dick from OdoBHF. Please go ahead.

Yes, good afternoon. Thanks for taking the question. A couple on my side. The first is on the DNA. Your guidance seems to suggest that DNA will be lower in 2025 versus 2024. So could you maybe confirm this or not and explain kind of the reasons behind that? I think you mentioned some model phase-outs having an impact on DNA. So just wondering if that was also expected this year. And then my second question is on the F80. So you mentioned in a presentation that it's been fully allocated, but there's also been various reports saying that there's been some cancellations from clients on the car. So maybe could you address that question, confirm whether or not there have been some cancellations and just, you know, whether you've just been able to replace these cancellations or, you know, and maybe where the order book stands for the SAT. Thank you very much.

Thank you, Anthony. I think the second one, the DNA, Antonio, will guide you. Thanks also for this question. Another interesting one, because it's also true that on Internet you may read whatever you want. We rely on the contract that our clients are signing. And also, if you won't allow me to say that there are more people than the 799 cars that we are aiming to do. uh unfortunately we cannot show you the contract but i think you've seen also after the blog was popped up i think was when was it uh mid-january because i remember i was on the phone with nicoletta there has been a correction and the the blog itself has been correcting the uh the news you know what what i can tell you instead of disclosing let's say something that we cannot i would like to tell you that the order intake on the supercash has been faster than the order intake on the i on the two previous iconas so i would not uh is not relevant this news uh what you read on internet the second one with respect to the dna i mentioned the plugin in 2024 the overall level of the dna was essentially flat

We moved quite a few millions. When we look at 2025, this is driven by the model phase in, phase out. We started having DNA from the start of production of the new models. So what is implicit in our guidance follows the fact that some of the models we currently have are going to be phased out, and new ones will kick in. There is little else to comment very honestly in this. In addition, we have the impact of the new e-building that started its production at the end of 2024. And this is it.

Okay, thank you. So could you maybe just clarify what are your expectations for DNA in 2025?

The difference between the 600 and 650.

Okay. Thank you very much.

Thank you. We will now take the next question from the line of Henning Kosman from Barclays. Please go ahead.

Hi. Good afternoon, everyone. Thanks for taking the question. The first one is really on pricing power ultimately. We have this very stubborn residual value debate. So I was just thinking, could you maybe reassure us a little bit? You're having these six launches in 2025. Could you just reassure us a bit about your expected ability to take these markups versus predecessor? The Dodechi Chilean view was obviously quite successful in terms of how you priced it and I suppose how you anticipated the demand. I think it would be helpful if you could maybe reassure us a little bit that you think you'll still be able to execute good pricing power as you're looking at these six launches in 2025. Just looking for a bit of color there. And the second question would be, again, in the direction of the hybrids. You've obviously indicated... Sorry, sorry.

The second is in the direction of hybrids, what you said.

That's right. In the direction of the plug-in hybrids, you've obviously given us in the industrial plan an indication of the number of models you were going to do in terms of hybrids, right? So I'm just wondering if there's anything at all that would make you revisit the plan as to how many of your models would be plug-in hybrids in the context of perhaps a little bit more muted reception on part of your customers, more in favor of combustion engines. Thank you very much.

Thank you. Sorry, the line was a little bit disturbed, but I start from the second one. And we confirm the plan that we had in mind two years ago. We said, let's say we were going to, three years ago, sorry, in 22, we said that we were having, let's say, the hybrid, the thermal, and the electric. So we are executing our plan according to our initial product plan. There is no change over there. Considering the story of pricing power, I would like to say in this way, we have a lot of launches this year, because this is what we were planning to do since time zero, because in light of respecting the client, different clients, there are clients that are aiming to have a pilot car, clients that have a sport car, so we want to offer all of them a new selection. of products so that we stay coherent with our strategy that was different Ferrari for different Ferrarista and different Ferrari for different moments. So we confirm our product strategy and our marketing strategy as shared two years and a half ago.

And we can expect the typical pattern of markups versus predecessor, right? We shouldn't think that there's going to be any deviation from the

the recent trend where you're able to take good markups versus predecessor, price increase versus... I don't want to, I wouldn't like to comment about the features of the new cars, either from a technical point of view or pricing point of view. Let's make them. You will see, we will start to roll out. I mean, you can make up your model. We will start pretty soon, let's say. And then you will see what we have in the pipeline. So you have to be a little bit patient, Enning.

Okay. So if I can just squeeze a final one on the topic of pricing. So you said you're not accelerating your plans in forwarding or front-loading deliveries into the U.S. So can I then assume that you think if there were tariffs, that you're quite confident that you'd fully pass them on as you typically do?

What I can tell you in this direction, one, as I said, we do not accelerate. Two, in this game, there are three players. There is Ferrari. There are the dealers. There is the client. When the detail will be disclosed in terms of timing, in terms of amount, we'll see how to manage properly. Today, there is a lot of things on Internet. on social app, whatever, but there is not yet any fact. So we like to do two things. One, we like to do to keep our promise, and two, we like to work on fact. When the fact will get out, we'll see how to manage. Thank you, Benedetto. Thank you, Henning.

Thank you. We will now take the next question from the line of Thomas Vesson from Kepler-Chevre. Please go ahead.

Thank you very much. I have three questions, please. Firstly, I'd like to come back to the improved average chain prices in Q4 versus Q3. I'd like you to give us a bit more details, please, beyond the increased personalization that you said has been the driver. Could you explain why effectively we saw a clear increase? Is it linked to the higher share of hybrids in Q4? Then I'd like to ask a second question about what you anticipate for the hybrid share in your volumes in 2025. I know it's probably a bit difficult to answer because you don't want to tell us too much about the six new models, but do you think it will increase power or do you think we're going to see a stabilization of hybrid share? And then I have a really long time.

Sorry, sorry, Thomas. The second question, you think it will increase power?

I'm asking if we're going to see a plateau in hybrid share in 2025 or if it will increase further. And then I have a last long-term question. you're going to be launching the most expensive product ever with the FAT in four units at the end of the year. We can assume, therefore, you're going to have very, very strong 26, 27 average selling prices. Can you tell us just one word about the post-FAT plan to be able to offset the departure of that car in 28 or 29, please?

Okay. To see what will happen in 28, 29, you will come here in October. Sorry. I will be there. Toma, you have to come, you will see, and we will disclose. If we tell you everything now, you don't come anymore here. So for sure, I mean, we have a plan that we'll disclose with you and all the colleagues in the call. And I mean, there is a plan that is supporting our ambition. We share with you what we were going to do in this time. And we executed what we committed to execute.

In terms of the hybrid share, the second was on the hybrid share for 2025. We expect to be slightly lower compared to 2024, having the delivery of the 12-cylinder. And in terms of the mixed price impact in Q4 compared to Q3, I think it's mostly related to the development of the SF90XX.

And also some personalization because they were using, there was an increased percentage of carbon finish parts. I mean, the carbon finish, as we said, also in other conference call is becoming more and more appealing. And as a matter of fact, you may remember, Thomas, that we increased also our capability, I mean, our supply chain capability to provide this kind of personalization.

And the last element is probably a bit of a country mix, which is also positive in Q4, more than Q3.

Thank you very much.

Thank you, Thomas.

Thank you. We will now take the next question from the last line of George Galliers from Goldman Sachs. Please go ahead.

Yeah, good afternoon, and thank you for taking my questions. The first question I had was just a bit of a housekeeping question with respect to the number of specials shipped in the fourth quarter. I think if we just do the basic math based off what you showed for Q1, 2, and 3, and then what you showed for the full year, it would imply that the specials were somewhere in the region of 7% to 8% of deliveries in Q4. I was wondering if you might be able to confirm that The second question I had was just on the depreciation and amortization. Obviously, at around 650 million for this year, there is quite a large delta to where the capex has been in recent years. Over time, is it fair and logical to expect the DNA to get close to the 900 plus million level of capex that we have been seeing? Or does the lifetime assumptions for the DNA mean that that annual DNA number will always be materially lower than the capex has been at these elevated levels? And then just finally, with respect to the order book, obviously sold out for the next two years, which is phenomenally strong. And that would equate to something in the region of around 28,000 cars. As we think about those orders, What is the average number of orders per customer? Can you give any insights into that? Thank you.

So the first one I will reply is 6%. You said the number of special Q4, 6%. The last one, yes, we are covered until 2026. And you said orders?

Orders per client? Per client, exactly.

We don't have this match. I think, let me put it this way, the distribution of order for sure is not Gaussian. It's pretty scattered, as I can tell you. There are, I can tell you, there are client, what I can tell you is that there are client that want only one kind of cars, the pilot, some client that want only the one for, you know, sport car drivers, and other people that are taking both. Depends a little bit. It is, you know, this kind of average is a little bit meaningless because it depends on the country and also consider that there are also, you know, the top VIP client that are taking our car also in different places. So we don't see this parameter because it's not representative. The second one, the DNA.

Yeah, the DNA. It's CapEx to DNA. I think we discussed it already when we had the Capital Market Day in 2022. And I think we said by the end of 2026, it would have expected to be around 1.2, so it's not one-to-one. For the next five years, please wait until the next capital market day and we'll be more specific. Clearly, what we are witnessing in this year is a wave of investment which is made of significant addition, the electrical that we were talking before, and the infrastructure and investment that are also reshaping our Maranello plant. Going forward, subject to the development, the definition of the new product plan, there are chances for a reduction and therefore for an equalization, a trend towards the equalization.

Understood. Thank you.

Thank you. We will now take the next question. From the line of Adam Jonas from Morgan Stanley, please go ahead.

Hi, thanks everybody. I'm looking forward to the tortellini as well. It's divine. Benedetto, you mentioned 81% of last year's sales were to existing customers. It was 74% the prior year. That's a big jump. I'm curious what drove that, what your long-term natural level is. And just to clarify within that question, I think you said that Did you say 40%, 4-0% of sales were to customers that owned one Ferrari already in the garage, or was it 14? I couldn't tell if it was 40 or 14, and then I have a follow-up.

4-0, sorry for my English. Thank you.

That makes more sense. No, it's me. It's my American ears.

No, no, it's okay. It's always good to learn. No problem. Thanks. Sorry.

Yeah, on the 81%, just curious a little color around that. It's a big jump, and I don't know if that could go higher. Your order book, based on what you see, would that remain around 81% or rise, or is that a high watermark?

I think, Adam, just consider the case of a 12-cylinder. The 12-cylinder is a car that is ICE, 12-cylinder, and you have 20% of the clients that are new. Okay. And also consider the average age. Average age is also around 45 years. The graph, if you take the 12-cylinder coop and spiders, yeah, the coop, to be precise, average age is 45.2 years, and the spider is 44.4 years. So it's easy to remember, three-fourths. So allow me to say, If I go to compare this also with the average age of the hybrid cars, more or less it's the same for the new client, for the new client. And in terms of another data point, it can be interesting if I go to see the new client percentage-wise, the order from new client is in the same ballpark.

Okay. All right. That would suggest stability there. Thanks, Benedetto. Just my follow-up. On the personalization, just another angle, you had acknowledged, again, some of the residual weakness in recent periods was maybe a little bit of over-personalization or different combinations that may not have achieved the same residual value retention in the second-hand market. And I'm wondering, even though you've guided clearly on personalization level remaining around 20%, more flat year-on-year, Has your team made any changes to the character or the type of personalization? You mentioned carbon fiber, but in addition to that, that you would make available to your clients or somehow disincentivize so that you don't have, you know, the rainbow-colored paint with the brown interior and, you know, making sure that it's more in – a Ferrari clientele pedigree. Does that make sense? I don't know if there were things you could do to encourage or discourage the type.

Thanks. Yeah, I think I understand what you mean. First of all, a few data points to give you more color because I think this is the last question. So I would like to share a little bit more color with all of you. So which are the personalization that are most common in our car? For sure, we have the carbon finish. Okay, different kind of finish. let's say accessories or things. Then there is also the painting. And then there is, when it comes to painting, there are different levers. Now, the question is, you have a client, and I have several in mind, that they come here with their idea of personalization, and they let them guide by our expertise. So, for example, some people are telling, I came to Maranello, I went to New York with an idea, and then your colleague suggested me not to go so extreme or to do something so strange. So they follow. Some other client said they come here and they take what they want. We cannot advise, but end of story, we cannot force them. So clearly, if there is, allow me to say, if there are some combination, they may not be pleased or liked or loved by the second client. potential buyers. We have been thinking internally about, just to tell you, we have been thinking internally maybe to make some predefined combinations. Well, and just fresh, last week, last two weeks, there are some places in the world, okay, where they like to have quote unquote a set menu. There are other places where they want a la carte. They don't like set menu, and they want to be free to select what they want. Some people are saying, look, I understand, I may lose on the residual value, but when I drive it, I want to enjoy it the way I want. Okay, so it's a choice. You have maybe on your shirt, AJ. I would not take yours. I would not appreciate it without the BV. So we have to pay attention because We cannot limit. We have to defend the values of the brand, the identity of the brand, no doubt. We will not make a strange car for sure. But if the people like the combination, we cannot say no because we cannot advise. I understand. Adam, the best way, you become our client and you can live this experience in first person.

Well, look, if I can get seconds on the tortellini because it's so billowy. It's billowy. It's so delicious. I'll get you an AJ shirt. Thanks very much. Bye-bye. Ciao.

Ciao. Thank you. We will now take the last question from the line of Tom Narayan from RBC. Please go ahead.

Hi, thanks for taking the question. Looking forward to October, praying for good weather. So my questions are, you know, first is on this whole residual value thing with that blog, which is, I guess, fake news. One thing that I think can help people understand this better is, I don't know if we've tracked this, but what is the percentage of your owners that might be looking at their Ferrari as potentially as an asset, maybe, you know, as an investor, just asking because, you know, the demand of these customers theoretically would be at most risk if residual values come down. That's the first one. Then I noticed on the slides on the 2025 guidance, you mentioned supply chain issues and challenges So just curious if there's any details there, if that's anything for us to really be worried about or anything. And then lastly, on the eBuilding, since we were there last year, it was a big empty room. Just curious, if we looked at it today, what would we see that's different? What specific things are you utilizing it for now? Maybe it's different than what we saw before. Thank you.

Okay, start from the last one. If you come here, you will see that out of this building there are puro sangue and, yes, hybrid cars getting out. Okay? There are cars that are done and getting out of the doors of that building. If you come here and you go to the, we say in Italy, first floor, in the US you say second floor, you have equipment that are managing, let's say, batteries, engine, inverter, axles. So this is about the e-building. Second, congratulations for having spotting out to this point that Antonio was clear. What does it mean supply chain challenge? It's very simple. There are some suppliers in the automotive industry that because of the lower demand of the big OEM are having some troubles. That's the meaning. So how do we cope with that? Number one, we are dispatching our people there to make sure that we do not stop our production. Number two, we are leveraging the second sourcing option that we have in place. So that's the meaning. It is funny because in the past we thought that the supplier depending less on us, if you want, At the more differentiated business, they could be more stronger. As a matter of fact, today, you have several suppliers in the Western world that are suffering because of lower demand of Western world OEM. Then you said the first one, F80, how many clients maybe you can comment through the F80?

Yeah, I would make a reference to what you already mentioned a couple of times in the description. We've been going through a statistical analysis of the receivables and the range cards, and the fact that the range cards in one year lose around 20% is pretty much a fact.

I mean, it's known historically. And this is under revaluation. So I think that is true. It's true that we have a very wide amount of receivables on the line and that's a fact.

those are usually appreciating over time very soon having said that it's very difficult sorry just to finish having said that is very difficult to to tell you what is the number of people who look at the car as an asset. I would be tempted to consider that collectors also have an investor's view, but not necessarily all. Most of them are simply passionate about that. And certainly clients who decide to buy one car only, a range car, should consider that it happens simply normally, that there is a reduction in value for the car. So that's part of the equation.

Got it. Understood. Thank you so much. Thank you. Thank you, Tom. Well, I would like, before the conclusion of this call, I would like really to thank all of you for the time today, but also for the attention you dedicate to us. Thanks for your questions. They helped us, me and Antonio, to clarify better. Thanks a lot. I would like also to thank all the stakeholders because what we did the last years and what we are going to do this year, it's only because we have a lot of people with great determination and passion. So the strong 2024 result and the continuing desirability of our brand is that. that is fueling our confidence for the year ahead and also for the future. So, having said that, thanks again, and I wish all of you a good morning, good afternoon, good evening, wherever you are on the globe. And meet you in person, 9 October here, and we'll take care also of the weather. It should be better. Worse cannot be. Thank you.

This concludes today's conference call. Thank you for participating. You may now disconnect.