- Total shipments of 2,610 units, up +22.7%
- Net revenues of Euro 940 million, up +13.1% or +11.1% at constant currency(1)
- Adj. EBITDA(2) of Euro 311 million(3), up 14.1% and reaching an EBITDA margin of 33.1% consistent with 2019 guidance
- Adj. diluted EPS(2) of Euro 0.95 (+21.8%)
- Industrial free cash flow(2) generation of Euro 282 million, including the positive cash impact from advances on the Ferrari Monza SP1 and SP2
2019 Guidance confirmed
The Group confirmed the following performance targets for 2019:
- Net revenues: > Euro 3.5 billion, over 3% growth versus 2018
- Adj. EBITDA: Euro 1.2-1.25 billion, approx. 10% growth versus 2018
- Adj. EBIT: Euro 0.85-0.9 billion, approx. 6% growth versus 2018
- Adj. diluted EPS (1): Euro 3.50-3.70 per share, approx. 6% growth versus 2018
- Industrial free cash flow: ~ Euro 0.45 billion, over 10% growth versus 2018
Maranello (Italy), May 7, 2019 – Ferrari N.V. (NYSE/MTA: RACE) (“Ferrari” or the “Company”) today announces its consolidated preliminary results(5) for the first quarter ended March 31, 2019.
Shipments(6)(7)
Shipments totaled 2,610 units in the first quarter 2019, up 482 units or +22.7% vs. prior year. This achievement was driven by a 30.6% increase in sales of our 8 cylinder models (V8), while the 12 cylinder models (V12) grew by 4.1%. The V8 performance was mainly led by robust deliveries of the Ferrari Portofino. This was partially offset by lower volume from the 488 family, with the 488 GTB and the 488 Spider approaching the end of their lifecycles, the 488 Pista ramping up and the 488 Pista Spider yet to arrive on the market. V12 performance was led by the 812 Superfast.
Growth in shipments occurred across all regions: EMEA(7) grew 9.6%, Americas(7) increased by 26.5%, Rest of APAC(7) was up 29.3%, while Mainland China, Hong Kong and Taiwan were up 79.2%. Geographic mix shifted in favor of Mainland China to accelerate deliveries in advance of the early implementation of new emission regulations.
Total net revenues
Net revenues for the first quarter 2019 increased to Euro 940 million, up 13.1% at current currency and up 11.1% at constant currency(1). Revenues in Cars and spare parts(8) (Euro 735 million, +20.1% at current currency or +18.3% at constant currency(1)) were supported by higher volumes of the Ferrari Portofino and the 812 Superfast as well as the ramp up of the 488 Pista, this was partially offset by lower sales of LaFerrari Aperta and the 488 GTB as well as the 488 Spider phase out. Personalization programs also positively contributed, along with deliveries of the FXX K EVO. The erosion in Engines(9) revenues (Euro 58 million, -23.4% at current and constant currency(1)) reflected lower shipments to Maserati. Sponsorship, commercial and brand(10) revenues (Euro 128 million, +2.0% at current currency or -1.2% at constant currency(1)) decreased at constant currency due to lower revenues generated by other brand related activities. Currency, including translation and transaction impacts as well as foreign currency hedges, had a positive impact of Euro 17 million (mainly USD).
Adjusted EBITDA(2) and Adjusted EBIT(2)
Q1 2019 Adjusted EBIT(2) was Euro 232 million, +10.7% at current currency or +4.9% at constant currency(1). This was a result of higher volumes (Euro 60 million). Mix / price was negative (Euro 22 million) due to the combined impact of lower sales of LaFerrari Aperta, that finished its limited series run in 2018, and the strong increase of the Ferrari Portofino. This was partially offset by deliveries of the FXX K EVO along with the positive contribution from personalization programs. Industrial costs / research and development costs increased (Euro 11 million), mainly due to higher depreciation and amortization of fixed assets. SG&A grew (Euro 4 million) mostly due to new product launches. Other decreased (Euro 13 million) mainly due to lower engines supplied to Maserati as well as lower revenues from our other brand related activities, with one timers in line with prior year.
The tax rate was reduced to 20% as a result of the advance agreement on the Patent Box, which will continue to benefit the entire year.
As a result of the items described above, diluted earnings per share reached Euro 0.95, up 21.8% vs. prior year.
Industrial free cash flow(2) for the three months ended March 31, 2019 was Euro 282 million, driven by strong Adjusted EBITDA(2), the positive cash impact from the collection of advances on the Ferrari Monza SP1 and SP2, expected to continue in the following quarters, partially offset by capex spending of Euro 135 million.
Net Industrial Debt(2)(12) at March 31, 2019 – after Euro 51 million of share repurchases in the first quarter 2019 and including Euro 63 million lease liabilities as per IFRS 16 first time adoption – was Euro 192 million, (-48.4%) versus a level of Euro 370 million at December 31, 2018.
2019 Guidance confirmed
The Group confirmed the following performance targets in 2019:
First quarter 2019 highlights
Brand Finance Award:
On January 22, 2019 Brand Finance published its yearly ranking, with Ferrari as the world’s strongest brand.
Ferrari F8 Tributo:
Successfully presented at the Geneva Motor Show on March 5, 2019, the Ferrari F8 Tributo represents the most powerful V8 in Prancing Horse history for a non-special series car and sets the benchmark not just for turbos, but for engines across the board. The F8 Tributo delivers its 720 cv without the slightest hint of a turbo lag and produces an evocative soundtrack. Instantaneous power is matched by exceptional handling due to the car’s advanced vehicle dynamics.
Subsequent events:
On May 2, 2019, following the approval of Shareholders at the Annual General
Meeting on April 12, 2019, the Company paid a dividend in cash of Euro 1.03 per outstanding common share, corresponding to a total dividend amount of approximately Euro 193 million.
Under the common share repurchase program, the Company has purchased a further 137,374 common shares for a total consideration of Euro16.7 million since March 31, 2019. As a result, as of May 2, 2019 the Company held an aggregate of
6,368,379 common shares in treasury.
Capex and R&
Non-GAAP financial measures
Operations are monitored through the use of various non-GAAP financial measures that may not be comparable to other similarly titled measures of other companies.
Accordingly, investors and analysts should exercise appropriate caution in comparing these supplemental financial measures to similarly titled financial measures reported by other companies.
We believe that these supplemental financial measures provide comparable measures of financial performance which then facilitate management’s ability to identify operational trends, as well as make decisions regarding future spending, resource allocations and other operational decisions.
Certain totals in the tables included in this document may not add due to rounding.
Total Net Revenues, EBITDA, Adj. EBITDA, EBIT and Adj. EBIT at constant currency eliminate the effects of changes in foreign currency (transaction and translation) and of foreign currency hedges.
EBITDA is defined as net profit before income tax expense, net financial expenses and depreciation and amortization.
Adjusted EBITDA is defined as EBITDA as adjusted for certain income and costs which are significant in nature, expected to occur infrequently, and that management considers not reflective of ongoing operational activities.
Adjusted Earnings Before Interest and Taxes (“Adjusted EBIT”) represents EBIT as adjusted for certain income and costs which are significant in nature, expected to occur infrequently, and that management considers not reflective of ongoing operational activities.
Adjusted net profit represents net profit as adjusted for certain income and costs (net of tax effect) which are significant in nature, expected to occur infrequently, and that management considers not reflective of ongoing operational activities.
Adjusted EPS represents EPS as adjusted for certain income and costs (net of tax effect) which are significant in nature, expected to occur infrequently, and that management considers not reflective of ongoing operational activities.
Basic and diluted EPS
Net Industrial Debt, defined as total Debt less Cash and cash equivalents (Net Debt), further adjusted to exclude the debt and cash and cash equivalents related to our financial services activities (Net Debt of Financial Services Activities).
Free Cash Flow and Free Cash Flow from Industrial Activities are two of management’s primary key performance indicators to measure the Group’s performance. Free Cash Flow is defined as cash flows from operating activities less investments in property, plant and equipment and intangible assets. Free Cash Flow from Industrial Activities is defined as Free Cash Flow adjusted to exclude the operating cash flow from our financial services activities (Free Cash Flow from Financial Services Activities).
On May 7, 2019, at 4.30 p.m. CEST, management will hold a conference call to present the Q1 2019 results to financial analysts and institutional investors. The call can be followed live and a recording will subsequently be available on the Group website http://corporate.ferrari.com/en/investors. The supporting document will be made available on the website prior to the call.
[1] The constant currency presentation eliminates the effects of changes in foreign currency (transaction and translation) and of foreign currency hedges
[2] Refer to specific note on non-GAAP financial measures
[3] Including Euro 4 million positive impact from IFRS 16 first time adoption (simplified approach)
[4] Calculated using the weighted average diluted number of shares for 2018
[5] These results have been prepared in accordance with International Financial Reporting Standards (IFRS) as issued by the International Accounting Standards Board and IFRS as endorsed by the European Union
[6] Excluding the XX Programme, racing cars, Fuori Serie, one-off and pre-owned cars
[7] EMEA includes: Italy, UK, Germany, Switzerland, France, Middle East (includes the United Arab Emirates, Saudi Arabia, Bahrain, Lebanon, Qatar, Oman and Kuwait) and Rest of EMEA (includes Africa and the other European markets not separately identified); Americas includes: United States of America, Canada, Mexico, the Caribbean and Central and South America; Rest of APAC mainly includes: Japan, Australia, Singapore, Indonesia, South Korea, Thailand and Malaysia
[8] Includes the net revenues generated from shipments of our cars, including any personalization revenue generated on these cars and sales of spare parts
[9] Includes the net revenues generated from the sale of engines to Maserati and the revenues generated from the rental of engines to other Formula 1 racing teams
[10] Includes the net revenues earned by our Formula 1 racing team through sponsorship agreements and our share of the Formula 1 World Championship commercial revenues and net revenues generated through the Ferrari brand, including merchandising, licensing and royalty income
[11] Primarily includes interest income generated by our financial services activities and net revenues from the management of the Mugello racetrack
[12] Net Industrial Debt redefined as Net Debt less Net Debt of Financial Services Activities