- Total shipments of 2,771 units, slightly up versus prior year
- Net revenues of Euro 1,011 million, up by 8.5%
- EBITDA(1) of Euro 376 million, up 18.6% versus prior year, with an EBITDA(1) margin of 37.2%
- EBIT of Euro 266 million, up 20.9% versus prior year, with an EBIT margin of 26.3%
- Net profit of Euro 206 million and diluted EPS(1) at Euro 1.11
- Sound industrial free cash flow(1) generation of Euro 147 million
- Confident to reach top end of the 2021 guidance range on the back of excellent results, robust net order intake as well as record order book as at the end of Q1 2021
- 2022 financial targets postponed by one year due to Covid-19
Commenting on the results and the outlook, Chairman and Acting CEO John Elkann said: “This strong start augurs well for the rest of 2021 and is testimony to the resilience of our business model as well as the extraordinary work of the women and men of Ferrari. Looking ahead, we expect the prudent steps we took in 2020 and are continuing in 2021 to adjust our expenditure in response to the Covid-19 emergency, will postpone by one year the achievement of our year-end 2022 guidance. However, the robustness of our order book and the wonderful new models we will launch in the coming years provide a strong base on which to build our ambitious future.”
Maranello (Italy), May 4, 2021 – Ferrari N.V. (NYSE/MTA: RACE) (“Ferrari” or the “Company”) today announces its consolidated preliminary results(2) for the first quarter ended March 31, 2021.
Shipments totaled 2,771 units in the first quarter of 2021, up 33 units or 1.2% versus a strong prior year quarter despite the limited impact of the Covid-19 pandemic on the core business.
Sales of 8 cylinder models (V8) were up 8.1%, while 12 cylinder models (V12) were down 19.6%. The deliveries of the quarter were driven by the F8 family and the 812 GTS. The SF90 Stradale and the Ferrari Roma remain in ramp up phase, while the 488 Pista family and the Ferrari Portofino have been phased out. The Ferrari Monza SP1 and SP2 continued to be delivered in line with production planning.
Quarterly shipments were affected by the deliberate geographic allocation, driven by the phase-in pace of individual models. As a result, EMEA(4) was down 3.8%, Americas(4) was almost flat, Mainland China, Hong Kong and Taiwan posted a strong 424.3% performance, boosted by the arrival of new models and accentuated by an easy comparison versus prior year(5), while Rest of APAC(4) decreased 16.6%.
Total net revenues
Net revenues for the first quarter 2021 were Euro 1,011 million, up 10.8% at constant currency(1).
The increase in revenues from Cars and spare parts(6) to Euro 855 million (up 8.5% or 11.0% at constant currency(1)) was generated mainly by the strong enrichment of the product mix.
The increase in Engines(7) revenues (Euro 45 million, up 37.8%, also at constant currency(1)) was attributable to higher shipments to Maserati and, to a lesser extent, the rental of engines to other Formula 1 racing teams.
Increased Sponsorship, commercial and brand(8) revenues (Euro 91 million, up 1.4% or 2.6% at constant currency(1)) were attributable to an improved outlook for the Formula 1 calendar, partially offset by lower prior year ranking as well as reduced brand-related activities due to the Covid-19 pandemic.
Currency – including translation and transaction impacts as well as foreign currency hedges – had a negative impact of Euro 22 million (mainly USD).
EBITDA(1) and EBIT
Q1 2021 EBITDA(1) increased by 18.6% or 24.0% at constant currency(1) versus prior year and stood at Euro 376 million with an EBITDA(1) margin of 37.2%.
Q1 2021 EBIT was Euro 266 million, up 20.9% or 28.5% at constant currency(1) versus prior year.
Volume was positive (Euro 5 million), reflecting shipments slightly up versus prior year.
The Mix / price variance performance (Euro 48 million) was driven by the strong contribution coming from a richer product mix thanks to the SF90 Stradale and the Ferrari Monza SP1 and SP2.
Industrial costs / research and development expenses increased Euro 19 million mainly due to higher depreciation and amortization of fixed assets and an increase in spending for product innovation activities net of technology-related government incentives.
SG&A diminished Euro 6 million mainly reflecting the adaptation of our communication and marketing activities to a more pronounced digital bias, also due to Covid-19.
Other increased Euro 24 million due to an improved outlook for the Formula 1 calendar and higher contribution from other supporting activities as well as Maserati, partially offset by lower prior year ranking and reduced brand-related activities due to the Covid-19 pandemic.
Net financial charges in the quarter stood at Euro 9 million versus Euro 13 million for the prior year, reflecting both a decrease in net foreign exchange losses and the remeasurement at fair value of investments held by the Group, partially offset by an increase in interest expenses as a result of the refinancing of a portion of debt in 2020.
The tax rate in the quarter was 20.0%, attributable to the Patent Box, deductions for eligible research and development costs, hyper and super-depreciation of machinery and equipment.
As a result, the Net Profit for the period was Euro 206 million, up 24.1% versus prior year, and the Diluted earnings per share for the quarter reached Euro 1.11, compared to Euro 0.90 in Q1 2020.
Industrial free cash flow(1) for the quarter was Euro 147 million, driven by EBITDA(1), partially offset by capital expenditures(6) of Euro 151 million and an adverse working capital impact due primarily to higher inventories as well as the reversal of the Ferrari Monza SP1 and SP2 advances received in 2019.
Net Industrial Debt(1) as of March 31, 2021, was Euro 420 million, compared to Euro 543 million as of December 31, 2020. During the first quarter a total of Euro 28 million of shares were repurchased(7). Lease liabilities per IFRS 16 as of March 31, 2021 were Euro 62 million.
As of March 31, 2021, total available liquidity was Euro 1,730 million (Euro 2,062 million as of December 31, 2020), following the reimbursement of Euro 500 million 2021 notes and including undrawn committed credit lines of Euro 750 million.
2021 Guidance, subject to trading conditions unaffected by further Covid-19 pandemic restrictions and the following assumptions:
- Core business sustained by volume and mix
- Revenues from Formula 1 racing activities based on the announced calendar and reflecting lower 2020 ranking
- Brand-related activities dealing with Covid-19 challenges
- Operational and marketing costs gradually resuming
Q1 2021 highlights
Ferrari and Richard Mille signed a partnership contract
On February 22, 2021 it was announced that Ferrari and Richard Mille have signed a multi-year partnership agreement, which will see the Haute Horlogerie brand become sponsor and licensee for the Prancing Horse.
Share repurchase program resumed
On March 11, 2021 Ferrari communicated its intention to restart its multi-year share repurchase program announced on December 28, 2018 with a fourth tranche of up to Euro 150 million starting on March 12, 2021 and to end no later than September 30, 2021, of which up to Euro 120 million to be executed on the MTA market under a non-discretionary share repurchase agreement with a primary financial institution and up to Euro 30 million to be executed on the NYSE under an additional mandate with a primary financial institution.
On April 15, 2021 the Ferrari’s Annual General Meeting of Shareholders approved a dividend in cash of Euro 0.867 per outstanding common share, totaling approximately Euro 160 million, to be paid on May 5, 2021.
New Ferrari limited-edition V12
On April 21, 2021 the first official images of Ferrari’s latest limited-edition special series have been published in the build-up to its world première, which will be broadcast live on the Maranello marque’s social media channels on May 5 at 2:30PM CEST.
Share repurchase program
Under the common share repurchase program, from April 1, 2021 to April 30, 2021, the Company has purchased a further 136,595 common shares for a total consideration of Euro 24.1 million. At April 30, 2021 the Company held in treasury an aggregate of 9,125,106 common shares. As of the same date, the Company held 3.55% of the total issued share capital including the common shares and the special voting shares, net of shares assigned under the Company’s equity incentive plan.
Capex and R&D
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(8)
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 (excluding right-of-use assets recognized during the period in accordance with IFRS 16 - Leases) 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 4, 2021, at 3.00 p.m. CET, management will hold a conference call to present the Q1 2021 results to financial analysts and institutional investors. Please note that registering in advance is required to access the conference call details. The call can be followed live and a recording will subsequently be available on the Group’s website http://corporate.ferrari.com/en/investors. The supporting document will be made available on the website prior to the call.
(1)Refer to specific note on non-GAAP financial measures
(2)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
(3)Excluding the XX Programme, racing cars, Fuori Serie, one-off and pre-owned cars
(4)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, India and Malaysia
(5)Easy comparison due to 2019 accelerated deliveries in advance of the early implementation of new emission regulations
(6)Capital expenditures excluding right-of-use assets recognized during the period in accordance with IFRS 16 - Leases
(7)Including repurchases for an amount of approx. Euro 15 million in relation to the Sell to Cover practice under the equity incentive plans
(8)For the three months ended March 31, 2021 and 2020 the weighted average number of common shares for diluted earnings per share was increased to take into consideration the theoretical effect of the potential common shares that would be issued under the equity incentive plans
(9)Primarily relates to financial services activities, management of the Mugello racetrack and other sports-related activities
(10)Capital expenditures excluding right-of-use assets recognized during the period in accordance with IFRS 16 - Leases
(11)Including repurchases for an amount of approx. Euro 15 million in relation to the Sell to Cover practice under the equity incentive
(12)Net of a tax benefit, with no cash impact on 2020, from the one-off partial step-up of the trademark’s book value in accordance with
the Italian tax regulations
(13)Calculated using the weighted average diluted number of common shares as of December 31, 2020 (185,379 thousand)
(14)Capitalized as intangible assets
(15)For the three months ended March 31, 2021 and 2020 the weighted average number of common shares for diluted earnings per share was increased to take into consideration the theoretical effect of the potential common shares that would be issued under the equity incentive plans