Ferrari N.V. Common Shares

and thank you for standing by. Welcome to the Ferrari Q3 2025 results conference call and webcast. 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, please 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 have a conference over to your speaker, Nicoletta Russo, Head of Investor Relations. Please go ahead.

Thank you, Radja, and welcome to everyone who is joining us. Today we plan to cover the Group Third Quarter 2025 operating results, and the duration of the call is expected to be around 45 minutes. Today's call will be hosted by the Group CEO, Mr. Benedetto Vigna, All relevant materials are available in the ambassador section of the Ferrari corporate website. And at the end of the presentation, you 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 2 of today's presentation. and the call will be covered by this language. With that said, I would like to turn the call over to Benedetto. Grazie, Nicolette.

Thank you, everyone, for joining us today. The past few months have been rich of important milestones for our company, among which the launch of the Ferrari Amati, the 849 Terrasa family, the first step of the build of the Ferrari Elettrica, and the capital market space. Let's start from the capital mapping day. On October 9, in Maranello, we gathered together and we shared our ambitions and plans for the future with investors, journalists and the entire world. In this current uncertain world, we shared an ambitious financial floor for the end of the decade. 9 billion euros of revenues, 40% EBITDA margin and 30% EBITMA. What did we say? What did we say at the Capital Market Day, exactly? Two things. We highlighted that Ferrari is a unique company which combines three dimensions, heritage, technology and racing. It has a dual identity, both inclusive and exclusive, capable to engage with people, Ferrari and brand lovers across generations and geographies. We accept ambitions for each show with the unwavering goal to keep our brand strong for the longer term, well beyond 2030. In racing, we aim to win, we want to continue to be successful in endurance and come back to victory in Formula 1. We owe this to our people here, to fuel the passion and the inclusive side of our brand. In Sport Cars, we continue to focus on managing and crafting the exclusivity of our products through an horizontal product diversification strategy, which ensures scarcity for each single model. We confirm our innovation pace. We will continue to offer our clients an average of 4 new models per year between 2026 and 2030, across the three different powertrains, ICE, Hybrid and Electric, to address different clients' and different clients' needs. In 2022, we told you that the 2030 breakdown of powertrain offerings would have been 20% ICE, 40% Hybrid and 40% Electric. Our plans were based on the environment in 2022 and our expectations about its evolution. Today, in 2025, we have deliberately recalibrated our power train offer to be 40% IC, 40% dihedral and 20% electric. Why did we decide this? Two are the main reasons. One, market dynamics. We have always believed in electrification as an addition, not as a transition. Overall market adoption of electric technology has been more gradual than anticipated in 2022. At the same time, demand for thermal and hybrid models has been more sustained. Two, client integrity. We put our clients always at the center of what we do. We are very flexible and agile to adapt our product plans to the evolving environment, developing and offering models that best address our client needs and meet their preferences. Regardless of the power trade, we will keep on harnessing each technology in a unique and distinctive way, enhancing the driving emotions and staying true to our belief that we have to be innovative, adapting to the changing times. That is what our founder did since 1947, when he dared to develop our first 12-cylinder engine, although not only built in it. It's our responsibility. It's our responsibility to keep alive this will to progress. This technology neutrality approach is something we have chosen, we have planned for and invested in, also from an infrastructure point of view. The eBuilding, our new facility in Maranello, capable to manufacture the three powertrains, is the perfect example of this flexible approach. Our research and development efforts will not only focus on powertrain performance, but also on vehicle dynamics, experience on board and on new materials, all of which make our product unique. Moving to clients, we will continue to grow our Ferrari family, which today counts 90,000 active clients, and to foster their sense of belonging in community through an ecosystem of unique experiences from truck to road to brand. Lastly, LIFESTYLE. This is the soul that is instrumental to enrich the client experience and to widen our audience beyond our defaults and favoritism. I personally believe the team did a great job in bringing brand consistency. We then translated everything I just said With the help of Antonio, let me underline a couple of elements. One, we continue to grow our business to new heights in an organic and consistent way. We look at the 2030 target as a floor of our ambitions, all impacting in the long-term interest of our brand, safeguarding exclusivity above all. The macroeconomic environment remains uncertain, and extremely volatile. However, the receivability and solubility of our business model allowed us to commit to an ambitious plan of six years of growth, which we will execute with focus and discipline as we did for the previous one. We will continue to deliver on our promises. And then we concluded the capital market day with our renewed decarbonization commitment. We have already achieved approximately 30% reduction in our scope 1 and scope 2 emissions and approximately 10% reduction per car in scope 3 emissions in 2024 versus 2021. We will capitalize on this achievement with the clear target to reduce our Scope 1 and Scope 2 emissions by 10 times in 2030 versus 21, and to decrease by 25% the absolute Scope 3 emissions in 2030 versus the past year, 2024. Moreover, the day before the Capital Market Day, we unveiled the technology hub of our Ferrari electric car. This represents the first step of the reveal, which will be followed by the look and feel of the interior design concept in Q1-26 and the complete cast in Q2-26. As a leader, Ferrari as a leader takes its innovation responsibility very seriously. The Ferrari Elettrica is a new opportunity to reaffirm our will to progress. As it has happened many times in the past, with the introduction of innovative concepts such as turbo engines, electric power trains and most recently with the Puro Sangue, there is great anticipation to experience the driving emotion of the ELECTRICA. After the capital market day, I met several clients in USA, in Korea, in China and in Italy. And all of them appreciated the way we presented the model. This is what they told me. Electric cars are generally heavy as elephants and not fun to drive. You did well to invest in active electronic systems to transform the elephant in a horse and to engage the drivers with peg-door shift, like in old Ferrari. We are looking forward to driving it. We can continue to be innovative if we keep the pace of change and leaving the three power trains in our portfolio is a clear advantage, especially in front of younger generations. With the first step of the review of the Ferrari Elettrica and unveiling in September of the 849 Testarossa Coupe and Spyder, we have concluded the six launches we had announced one year ago for the entire 25. I met many clients in Europe, in the USA and in China who are in love with Castarossa. Last week in China, I met a young female client, younger than 40 years old, and she told me Testa Rossa is the perfect harmonious blend of design and engineering, elegance and craftsmanship. I am eager to own one and drive it. In the past few months, almost all range models in production were substantially sold out. The launches of the Testa Rossa February and the Amalfi and their great traction among clients are, initially, contributing to the order intake. Indeed, the order book extends well into 2027. Over the next few quarters, we will have significant changeovers of models. Indeed, in January 2025, only 15% of our line-up was in ramp-up phase of production, while we will close the years with 35% of the line-up in ramp-up phase, and this is the result of all the activities of development that we did in the past years. Moving to the quarters, Q3-05 saw continued growth, just a few key numbers to highlight. 1. Total revenues reached approximately €128 billion at 7.4% growth year-over-year with fair deliveries. 2. Strong profitability, with Egypt for over €500 million. And, last but not least, industrial leakage flow at €365 million. These are solid business performance. These solid business performance allowed us to revise upward the 2025 guidance during the Capital Amateur Day in October. Our revised guidance exceeds the profitability target we had originally set for 2006 in the previous business plan, one year in advance. Moreover, the decision to complete the current sales and purchase program within these years, once again one year earlier than planned, also reflects such progress and strong confidence that we have in the future. And now I will leave the stage to Antonio to explain the quarter in more depth.

Thank you, Benedetto, and good morning or afternoon to everyone joining us today. Starting on page 4, we provide the highlights of the third quarter, which once again delivers consistent growth and demonstrates solid progress. Product mix and standardization, along with rising revenue, were the main drivers of revenue and profitability growth, with shipments in line with the previous year. This resulted in a strong industrial precursor generation in the field. Let me underline that such results were accomplished notwithstanding the impact of the incremental US import strike, which became visible in Q3, a greater foreign exchange rate headwind, and lower deliveries of the Daytona ST3, which was phased out in the quarter. On page 5, we deep dive into our achievements. They were driven by the 296 GTS, the Puro Sangre, the Godish Cylinder family, which continued its ramp-up phase, and the Roma Piler. The SF90 Express family increased its contribution. The 296 GDB decreased, approaching the end of its ride cycle, and the SF90 Piler phased out. Deliveries of the Dicona SP3 were lower than the prior years and concluded their limited series run. As anticipated by Benedetto, in the quarter we started a significant changeover of models, which will be also visible in the next quarter. The SF90 family and the Roma were already phased out and the 296 family is approaching the end of its life cycle. Indeed, those models will be progressively replaced starting from next year by the 849 Zsaroffa family, the Amalfi and the 296 Special Series respectively, a record number of new models introduced at the same time. On page 6, the next revenue brief shows a 9.3% growth versus the prior year's constant currency. This translates into a 7.4% growth, including the hedging from currency, mainly related to the US dollar dynamics. The increase in cars and spare parts was driven by the richer product mix, as well as higher personalizations, despite the lower delivery to Zytona SP3, which followed our plan. Personalizations accounted for approximately 20% of total revenues from cars and spare parts and were particularly relevant for the M90XX family and the Puro Sangue, also supported by the adoption of carbon and special paint. Sponsorship, commercial and brand also increased thanks to higher sponsorships and the improved performance of the lifestyle activities, as well as higher commercial revenues linked to the better prior year Formula 1 rankings. Moving to page 7, the change in EBIT is explained by the following variances. Mix and price was positive thanks to the enriched product mix. Indeed, despite the phase-out to the Daytona SP3, the product mix was sustained by the higher end of our product offering, namely the SF90-SX and the 12-inch ring refineries. The mix was also supported by the increased contribution from personalization. Please note that the impacts from incremental US import tariffs, as well as from the update of our commercial policy in response, are included in the mixed price variance. This resulted in a margin dilution at stock and currency, particularly visible in the third quarter, since the majority of our shipments in the United States were represented by models whose prices were protected under the updated policy. Industrial costs and G&A were lowered year over year, in line with model life cycles, partially upset by higher development costs for racing. SG&A were also higher reflecting rating expenses and brand investments. Other was positive mainly thanks to racing and lifestyle activities. Percentage margin continues to be strong in the quarter despite the dilution from the increase in import uses with EBITDA margin at 37.9% and EBIT margin at 28.4%. Turning to page 8, our industrial free cash flow generation for the quarter was strong at €365 million and reflected the increase in profitability, partially offset by capital expenditures which were mainly focused on product development and the progress in the new paint shop construction. And the negative change in working capital, provisions and others, mainly due to the reversal of the advances collected in previous quarters. Net industrial debt was €116 million at the end of September, also reflecting the share purchase program executed in the quarter, which is approaching its completion by year-end, as reminded by Benedetto, one year in advance compared to our plan as announced in June 2022. Moving to page 9, we confirm our 2025 guidance, which was revised afterwards during the Capital Market Day on October 9th, on the back of the Soyuz business performance and reflecting improved sport car revenues, including personalization, aligned as an expected cost base, despite a greater hand-win from foreign exchange rates and increased use times. And with this in mind, for Q4, we project lower delivery year-over-year, as we already told you in the second quarter call, and this is in connection with the changeover of models that I mentioned earlier on. A positive product mix, although sequentially tighter, in line with the phase-out with Zytora and the first units of TF80. Higher SG&A and additional step-up in rating R&D expenses, as well as higher DNA dictated by the stats of productions of the models. Looking at 2026 and beyond, let me remind you that the introduction of the F80 will be gradual. As usual, it will take a couple of quarters to run past the production and the life cycle is expected to be around three years. The current of the FAT and the model changeover will imply a more back-end loaded 2026 and will shape the product and company mix throughout the year. Such developments are consistent with our plan to deliver in the years to come a smooth and as linear as possible expansion of our profitability in absolute terms. We are sure that we continue to execute on this plan with discipline and focus and today's strong results provide once again the evidence for our continued commitment. Thanks for your attention and I turn the call over to Nicoletta.

Thank you Antonio and Andrea, we are now ready to take the questions. Please go ahead.

Thank you. As a reminder to ask a question, please press star 1 and 1 on your telephone and wait for your name to be announced. To withdraw your question, please press star 1 and 1 again. Once again, please press star 1 and 1 on your telephone and wait for your name to be announced. To withdraw your question, please press star 1 and 1 again. Please stand by while we compile the Q&A roster. This will take a few moments. Thank you. Once again, please press star 1 and 1 on your telephone and wait . Thank you. We are now going to proceed with our first question. And the questions come from the line of Michael Binetti from . Please ask your question.

Hey, guys. Thanks for taking our question here. Just a couple for me. Antonio, I think you're saying that the MIX impact in the second half will be a little bit better than what you anticipated. I saw that, you know, Mix added about $25 million in the quarter. I think last call you said Mix would be neutral for the second half. So can you just help us think of, you know, what's driving a little bit of that upside and maybe how much we can think about in fourth quarter from Mix relative to the third quarter? And then I guess just as we think about the personalization comments you made about 20% now, you got to do it. personalization being closer to 19% longer term. It's a little counterintuitive to us with the new tailor-made studios and the paint shop coming online next year. Can you just walk us through, you know, what drives the moderation there?

Yeah. Thank you, Michael. On the first question, yes, the mixing... Can you hear well, Michael?

I'm sorry, what was that, Mangetta?

I was saying, can you hear well?

not not very well now this is why i asked you because we understood that someone was not able to listen that we hear well i don't know this is that right okay i'll try and answer i hope i hope you can hear me yes the mid impact in the second half of the year has been slightly better than anticipated so i remember i answered you in the second quarter call that we would have expected the mix more neutral in the second half. Now this is slightly improved, at least based on the third quarter results. And this is mainly due to personalization that remain very, very strong. With respect to your second quarter, second question, we said we have prepared the plan on the basis of a 19% longer term penetration of personalization. In this respect, the contribution of tailor-made, and particularly the tailor-made center, very much has been taken into consideration mostly to come closer to our clients. So the overall consideration on the penetration of personalization takes that into account with a view to be close to our clients also in countries where such tailor-made personalization are particularly relevant, especially in Japan and the western coast of the USA.

Okay. And can I just ask you one clarifying comment? You said the F80 will roll out over three years. Am I wrong, or is that a little longer than the normal cadence for one of the strictly limited or supercar models like this? And is there a strategy behind stretching that out a little longer? I would think normally it would You'd see the bulk of those shipments in maybe eight or ten quarters.

Taking offline what we've been doing on the Iconas recently, considering the overall number of cars involved and the startup phase that is entailed in order to get to a run rate of production.

Thanks, guys. I appreciate it.

Thank you. We are now going to proceed with our next question. The next questions come from the line of Steven Reitman from Bernstein. Please ask your question. Hello, Steven. Your line is open. You may ask your question. Can you hear us? Your phone might be on mute. The line is open if you may ask a question. Okay. It looks like the person is not just disconnected. We are now going to proceed with our next question. And the next question comes from the line of Flavio Cereda from GAM. Please ask a question.

Yeah. Hi. Good afternoon. My question is, I'm taking you back to the capital markets day and your projections of top line growth to 2030. So a very simple question, volume, price, mix. Volume, you've got to control it, mix to a point. And I was just wondering, on price, your pricing power, given all that's been done and the great results that we've seen in recent years, Benedetto, where do you think you stand on this? Do you think you're coming to an end here, or do you think there's more to come?

Thank you, Claudio, for the question. It's not at all at an end. Actually, we feel confident that with all the innovation that we have to delight our clients, we do not see any weakening in our pricing powers. We will continue to offer, Claudio, cars with different positionings, all of them will benefit of the pricing power because this pricing power, just to be clear, is not coming because we will just increase the price for the same, let me say, product as it is. No, we will make richer and richer, innovative, more and more innovative with the product so that by delighting the client, we are confident that we will keep our pricing power. And this is what we are working on and this is a The goal of all the money that you invest in R&D, in innovation, we want the team here.

So aligned to more models, fewer volumes.

Yeah.

Okay.

Perfect. Thank you. Ciao. Thank you, Claudio.

Thank you. We are now going to proceed with our next question. And the questions come from the line of Thomas Besson from Kepler Silver. Please ask your question.

Thank you very much. I have two questions, please. First, on hybrids, I think the share was lost in a couple of years. Is it linked with the changeover of product or is it driven by a willingness to reduce overall hybrid share to eventually address excess deliveries in certain markets and residual values? but for the first question and the second. Could you give us the delivery figures, please, for the Q3 data now and how many F80 you're already going to launch in Q4, please?

Okay, so the first one, Tomas, depends on the offers that we have on the line-up we are offering to our clients. The number of hybrid cars that we're offering is... is reducing because there is a change in the model. So there is no, if you want, there is no surprise over there. It's a consequence of the way we launched the cars. No, that's it. Don't extrapolate any trend over there, okay? And it's not related to the propulsion. The second is how many F80s you're planning to launch, to sell?

Just the initial few units, not its numbers. Thank you very much.

Thank you.

Thank you. We are now going to proceed with our next question. And the next questions come from the line of Steven from . Please ask a question. Your line is opened.

Yes, good afternoon. Apologies. I had a problem with connection. And I apologize also if the question's been asked before because I was cut off, so I had to re-dial in again. So thank you for your comments about the contribution of the 849 extending the coverage of your order book into 2027. I'd like to know if demand is similar for both the Coop and for the Spider. And I know you don't comment on the order intake on a model-by-model basis, but could you talk about the level of interest you're seeing in the Amalfi? Is demand strong for the entry products as it is for your higher-end products? And my second question is regarding also on the hybrids. You've given us some detail in the past about the penetration rates you're seeing for your extended warranty program, for the battery program and the like. And I think the last figure we had was running at about 15% to 20%. Obviously, that's a very good way of improving the residual values of these vehicles and making these Ferraris last, being cast last forever, as is your intention. So could you update us on where you are with that program? How well is it understood? Thank you.

Thank you, Stephen, and I understand that electronics is not always working well before. That is why we manage carefully electronics in our cash. Having said that, how is going the Amalfi? I think Amalfi is better than the previous model. So this is very encouraging. The second point I can tell you is that I saw, I was in China the 21st of October, and I saw the first two Amalfi sold over there. to the new client, the youngest, then 40 years old. I can also share with you that in order book, more than 60% of the new client, sorry, 40% of the people that want to buy the Amati are coming into the brand. And this is, let's say, we are pleased because one of the objectives of this car was to bring on board new to the brand. So that's the comment on Amalfi. The story of hybrid, the hybrid warranty, I think that is picking up, continues to pick up, is more than 20%. But we see one simple thing. We have dealers that are able to explain it well, while we still see some dealers that have not yet explained it properly. So we are in the process. to retrain some of our dealers because some of them are not able to explain properly the advantage of this warranty scheme. So we see improvement, but I think there is more if all the dealers are able to explain properly. Thank you. Thank you, Susan. Thank you.

Thank you. We are now going to proceed with our next question. And the questions come from . Please ask your question.

Thank you. I think I've already asked my question, so I think you can pass on to the next speaker.

In fact, I was surprised.

Yeah, me too, but thank you.

We are now going to proceed with our next question. And the next questions come from the line of Robert Kraskowski from UBS. Please ask your question.

Hello. Just two questions for me, please. And just maybe starting with the Q3, like I think we're expecting that it's going to be the weakest quarter in the year. So obviously something went better and maybe we heard that it was personalization, but maybe if you could talk specifically about the U.S. Back in Q2, you mentioned that there is some change in consumer behavior because of the tariffs. Have you seen it normalizing right now? after we have more clarity on tires. And maybe the second one also related to the U.S. Obviously, there is a lot of conversation about residuals, and there is some kind of concern about potential increasing order cancellations. Have you seen any unusual or any pickup in orders cancellation in the U.S. as consumers are a bit worried about potential change in residual values in the market? Thanks.

I'll take this question, Robert. So, one, in U.S., the business proceeds as usual, number one. Number two, the only difference we see in the US, that if you compare today versus the previous call, at that time the tariffs were still at 25%, now they are at 15%. Now it's carved out in the stone, it's 15%. So that's the only difference we see. And we have been, you remember last time we told you when it will become how can I say, directed by papers, then we will update the commercial policy and that's what we did. That's what we did before. We said the price increase up to 10% when the tariffs were 25% and now we say price increase up to 5%. That's the only difference in the US. Then the business proceeds as usual.

And with respect to Q3 being originally thought as the weakest quarter in the year, I think the reason is simple. The level of personalization was higher than we were expecting, so that adds to the top line. And in terms of the cost basis, a point that I highlighted when we revised the guidance afterwards, the cost basis actually ended up being lower compared to our initial expectations.

Thank you. We are now going to proceed with our next question. And the questions come from the line of Tom Narayan from RBC. Please ask your question.

Hey, thanks for taking the questions. My first one, Antonio, I think I didn't hear it, and you said it, but could you review the bridge again from Q3 to Q4? I know the The Daytonas are zeroed out, but then maybe review the R&D and SG&A, and then I have a follow-up.

Yes. With respect to Q4, Tom, I said there will be lower deliveries year over year. That's a point that we already mentioned today. This is to be right in connection with the changeover of models that we discussed. Then I said there will be a positive product mix. Although we expect it's sequentially lighter in line with the phase-out of the Dysona and the first unit of the F80. And the last point is that we expect higher DNA and a seasonal step-up in racing expenses for development of the applications for the car, as well as higher DNA that are dictated by the start of production of the new models.

Got it. Okay, that's very helpful. And then I have a kind of high-level question. I think in the past you've said that when there's a new kind of form factor, like Pura Sangue was a very different vehicle than you had ever made in the past, that initially, obviously, there is a, I don't know, like a margin headwind or relative to if it was a standard product that you've done before at the same price point. How do we think about the Electrica from this standpoint, given that it's a completely different form factor? Is it safe to say that there's a similar kind of margin headwind there, relative to models that you make at a much larger volume, requiring less incremental new spend? Is that a safe assumption to make?

Thanks. I think, Tom, you have a good memory. That's what we said about ProSignWare. But we said it when everything was announced that everything was certified. So I don't want to look like I'm polite, but if you are patient a little bit, then we will be more precise on that. Got it. You remember, we told you everything when the shape was visible and not only the shape. Thank you. Understood. Thank you.

Thank you. We are now going to proceed with our next question. And the questions come from the line of James from Jefferies International. Please ask your question.

Yes, buona regia, Benedetto, Antonio and team. I guess I have really a philosophical question for Benedetto, just to follow up on Flavio's. I think, Benedetto, you've made it very clear that you expect a higher rate of innovation to continue to really support your pricing power for the brand. But when I consider your 2030 plan, you seem to assume that that lever, that price mix lever, is going to be much less important than in the past. Should we be thinking that the rate of innovation in the next five years reduces to go hand-in-hand with that price mix lever being less important than in the past four years? Thank you.

No, I think that innovation rate does not slow down, honestly. I think we have several innovations in the pocket that we plan to apply to the different cars, each one for its own positioning. And if we would sit on innovation, I don't think we would be calling Ferrari. So the reason why I was very clear in the answer to the question of Flavio Cereda, is because we have several levers of innovation that go beyond the traction, that is the vehicle dynamics, that is the user interface, that is architecture, that is the driving trails. We feel confident that once we apply this to the different models, we will be able to delight the client and thus to use properly the pricing power. Because we are not, I would like to maybe underline one point. We are not a company that is increasing the price of the same object just because time goes on. No. We increase the price of what we do because we put something more innovative in it and because this innovation is going to delight our clients. I think this is important. If you see also the way we increase the price in the past years, well, Ferrari has been unique in the sense that we have not increased the price of the same object, but we have a put the innovation in the product, and that, because of high degree of innovation, high degree of delightment of the client, we exerted properly the pricing power. That is B, and that's going to be in this way. James. That's very clear. Thank you. Thank you.

Thank you. We are now going to proceed with our next question. And the questions come from the line of Jose Asumendi from J.T. Morgan. Please ask your question.

Thank you very much. Thank you, Renato. Just one question, please. I guess I shouldn't ask the question after the Capital Markets Day with regards to having a very exciting future, having bright products that you're launching to the market. But it also requires some investments, such as the launch of the Eletrica. I think some necessary investments, like the paint shop, I know I think all the great facilities we saw during the Capital Markets Day. The question is, to create a stability of margins in the business model, how can we think about the offsetting elements, the positive contributions you're going to have in the medium term to create that margin stability? And there may be some doubts in the market about the margin stability of the business model. How can we think about that balance between investments and then the opportunities you have to maintain and create that margin stability that you've shown, I think, in the past years? Thank you.

Let me see, because there was some noise, just to make sure that I understood properly, Jose. I think that if you want this question for me, the answer is available to the previous one. The only way, first of all, we are living in a certain time, yes. There is no difference also, if you want, to many other cases in the history. The only things we can do is to make sure that we keep innovating, so to offer something that is unique to our client. Unique in the performance, in engineering. Unique in the design. Unique in the way we do it. Because, you know, why are we doing the paint shop? Why did we do the e-building? Because we want to be unique in the way we manufacture our cars, whatever they are. I see hybrid and green electric. Why we are showing in a multi-step way the innovation of electrical? Because we want to ensure that all the work done by the engineers, well, it's not going to be lost. Because there are so many new things in this car, as well as in the other cars, that we will make sure that innovation is properly implemented. that they explained it to our client. We noticed, let's put it this way, we noticed that for some cars in the past, there was a lot of innovation content, or there were several innovation content that were not properly explained. And this is another improvement we have. When we do something new, even on technology, on design, on engineering, we have the responsibility to explain well to the world. Because beyond that, there is the work of many people, blue-collar and white-collar. So this is, you know, the philosophical question or the goal of this question, of this company, is to make sure that on the innovation side, whatever we do, is unique. And this is, if you want, the best guarantee of the long-term sustainability of what we do. That's it. Only if you are unique, you know, we can do something that guarantees the long-term sustainability. That's the reason why we gave you a floor for the end of this decade, and we feel confident for that, because of the uniqueness of what we do.

Thank you. We are now going to proceed with our next question. And the questions come from the line of Michael Tindall from HSBC. Please ask your question.

Yes, good afternoon. Thank you very much. Two questions, if I can. One for Antonio. Can we talk about the F1 budget for next year? So headline number, if I'm not wrong, is US$215 from current US$135. From where you're sitting, is that just an incremental US$18 million of cost, or is Does the scope change mean that actually the impact on your P&L is considerably lower than that headline number? And then the second one is just around, can you talk a bit about FX on the order backlog? What scope do you have and how much do you really want to push in terms of trying to offset what's going on with currencies on a backlog that now runs into 2027? Thanks.

Thank you, Michael. The first one really is a fuel cost increase. That's an element we need to take into account. If we have one budget growth, this goes into our cost and it is to be taken as a cost increase. On the effect on the order backlog, based on the agreement that we have with dealers, in principle, we could change pricing with a 90-day anticipation, I guess.

um so that's something that in principle is possible we decide on our country-by-country basis and depending also on the movement in terms of the exchange rate on the side of the move got it got it thank you welcome thank you given the time constraint this concludes the question and answer session i will now hand back to Benenetto Vigna CEO for closing remarks

Thanks for your time today and also for all your interesting questions. Thanks a lot. We remain focused on executing our plans throughout the rest of these years. And also, with confidence, we begin to build the next phase of our new business plan. It's a business plan, it is ambitious, and we are highly confident that this is going to happen. We'll deliver on our promises as we already did so far. And this, after this, I wish you a good morning or afternoon. And I thank you again for your attention and your questions. Thank you.

This concludes today's conference call. Thank you all for participating. You may now disconnect your lines. Thank you and have a good rest of your day.