On track to reach the top end of the full year guidance on all metrics

Publication date: 
03 Nov 2020
  • Total shipments of 2,313 units, down by 161 units versus prior year, driven by production cadence
  • Net revenues of Euro 888 million, decreased by 3.0% with core business revenues up 2.6% driven by the deliveries of the Ferrari Monza SP1 and SP2
  • EBITDA(1) of Euro 330 million, up 6.4% versus prior year, with an EBITDA margin of 37.2%, up 330 basis points due to favorable mix / price and cost containment measures
  • EBIT of Euro 222 million essentially in line with prior year, with an EBIT margin of 25.0%
  • Positive Industrial free cash flow(1) generation of Euro 77 million
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2020 Guidance revised to the top end of the August 3rd guidance subject to trading conditions unaffected by further Covid-19 pandemic restrictions:

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Maranello (Italy), November 3, 2020 – Ferrari N.V. (NYSE/MTA: RACE) (“Ferrari” or the “Company”) today announces its consolidated preliminary results(3) for the third quarter and nine months ended September 30, 2020.

Shipments(4)(5)

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Shipments totaled 2,313 units in the third quarter of 2020, down 161 units or 6.5% versus prior year, driven by the cadence of the Company’s full year production plan, which projects a recovery of 500 units out of the 2,000 lost following the seven-week production suspension due to the Covid-19 pandemic. Sales of 8 cylinder models (V8) were down 12.8% while the 12 cylinder models (V12) increased by 15.4%. The F8 Spider and the 812 GTS are in the ramp up phase reaching mainly EMEA, gradually offsetting the 488 Pista family and the Ferrari Portofino which have essentially reached the end of their lifecycle. The Ferrari Monza SP1 and SP2 continue to be delivered as originally scheduled. Deliveries of the SF90 Stradale and the Ferrari Roma are on track to start in Q4 2020.

Quarterly shipments were affected by the deliberate geographic allocations driven by the phase-in pace of individual models. As a result, EMEA(5) increased by 12.7%, Americas(5) was down by 34.7%, Mainland China, Hong Kong and Taiwan posted a decrease of 25.2%, while Rest of APAC(5) was in line with prior year.

Total net revenues

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Net revenues for the third quarter of 2020 were Euro 888 million, down 3.2% at constant currency(1). The growth of revenues in Cars and spare parts(6) to Euro 727 million (up 2.6% or 2.4% at constant currency(1)) reflected the positive mix thanks to the Ferrari Monza SP1 and SP2, partially offset by lower volume mostly due to the phase-out of the 488 Pista family, which also implies a lower contribution from personalizations, as well as the Ferrari Portofino reaching the end of its lifecycle. Engines(7) revenues (Euro 44 million, down 4.4% also at constant currency(1)) were substantially in line with prior year. Sponsorship, commercial and brand(8) revenues (Euro 93 million, down 30.9% or 31.8% at constant currency(1)) were significantly impacted by the Covid-19 pandemic resulting in a reduced number of Formula 1 races and corresponding lower revenue accrual – albeit improved in the quarter based on updated estimates – as well as reduced in-store traffic and museum visitors.

Currency – including translation and transaction impacts as well as foreign currency hedges – had a minor positive impact of Euro 2 million (mainly USD).

EBITDA(1) and EBIT

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Q3 2020 EBITDA(1) grew by 6.4% or 4.7% at constant currency(1) versus prior year, reaching Euro 330 million with an EBITDA margin(1) of 37.2%, up 330 basis points versus prior year.

Q3 2020 EBIT was Euro 222 million, essentially in line with prior year (-2.1% or -4.1% at constant currency(1)). Volumes had a negative impact (Euro 19 million), while the Mix / price variance (Euro 46 million) performance was positive thanks to the Ferrari Monza SP1 and SP2, partially offset by the lower contribution from personalization programs due to the decrease of shipments and the gradual phase-out of the 488 Pista family. Industrial costs / research and development costs decreased (Euro 5 million) due to spending cadence in Formula 1 racing activities, partially compensated by higher depreciation and amortization of fixed assets. SG&A decreased (Euro 18 million) reflecting fewer marketing initiatives, as well as cost containment actions. Other decreased (Euro 60 million) due to the Covid-19 impact on the Formula 1 racing calendar, as well as lower traffic for brand-related activities.

Financial charges in the quarter stood at Euro 14 million versus Euro 16 million for the prior year, which reflected the impact of the early refinancing of a portion of debt.

The tax rate in the quarter was 18%, mainly attributable to the benefit of the Patent Box, deductions for eligible research and development costs and the hyper and super-depreciation of fixed assets in accordance with current tax regulations in Italy.

As a result of the items described above, the Net Profit for the period was Euro 171 million, reflecting a slight increase versus prior year, and the Diluted earnings(1) per share for the quarter reached Euro 92 cents, compared to Euro 90 cents in the corresponding prior year period.

Industrial free cash flow(1) for the quarter was Euro 77 million, driven by the growth in EBITDA(1), partially offset by capital expenditures(10) of Euro 158 million and an adverse working capital impact due primarily to higher raw material and component inventories as well as the reversal of the Ferrari Monza SP1 and SP2 advances received in 2019.

Net Industrial Debt(1) as of September 30, 2020, was Euro 715 million, compared to Euro 776 million as of June 30, 2020. Lease liabilities per IFRS 16 as of September 30, 2020, were Euro 68 million.

As of September 30, 2020, total available liquidity was Euro 1,879 million (Euro 1,812 million as of June 30, 2020), including undrawn committed credit lines of Euro 700 million.

2020 Guidance revised to the top end of the August 3rd guidance subject to trading conditions unaffected by further Covid-19 pandemic restrictions:

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Third quarter 2020 highlights

Ferrari signs the 2021-2025 Concorde Agreement

On August 18, 2020, Ferrari S.p.A. signed the two agreements that will govern the Scuderia’s participation in the FIA Formula One World Championship over the five year period from 2021 to 2025. The agreements, which were signed with the Fédération Internationale de l’Automobile and Formula One World Championship Ltd. (“Formula One”), cover the regulatory and governance aspects of the highest level motorsport series. The commercial aspects are defined in the agreement between Ferrari and Formula One.

The Ferrari Monza SP1 wins the 2020 Compasso d’Oro

On September 9, 2020, the Ferrari Monza SP1 won the prestigious Compasso d’Oro (Golden Compass), one of the most sought-after awards in the industrial design world. The ADI (the Association for Industrial Design) Compasso d’Oro is the oldest and most authoritative international industrial design prize. Just 11 cars have ever received the Compasso d’Oro in its long history, of which three are Ferraris: the F12berlinetta in 2014, the FXX K in 2016 and now the Ferrari Monza SP1. The jury chose the Monza SP1 because of “its ability to project itself into the future and draw on the legacy of memory without ever feeling vintage”.

Ferrari Portofino M unveiling: a voyage of rediscovery

On September 16, 2020, the Ferrari Portofino M, the evolution of the Ferrari Portofino was unveiled. For the first time ever in Maranello marque’s 70-year-plus history, the new car’s premiere took place entirely online. The Portofino M is the first Ferrari to be presented in the wake of the company’s temporary closure due to the Covid-19 crisis, making it the symbol of a voyage of rediscovery. It is the (re)starting point for Prancing Horse’s pursuit of innovation whilst fully respecting its heritage, passion and constant search for perfection. New technical innovations comprise a redesigned powertrain, a brand-new eight-speed gearbox and the five-position Manettino that includes a Race mode, an absolute first for a Maranello GT spider.

Ferrari Omologata: a new one-off creation

On September 25, 2020, Ferrari announced the premiere of the 10th one-off crafted over a V12 platform. With its Rosso Magma finish and sophisticated racing livery, the Ferrari Omologata is a clear descendent of Ferrari’s great tradition spanning seven decades of history.

Capex and R&D

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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.

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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.

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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.

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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.

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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.

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Basic and diluted EPS(12)

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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).

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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). Prior to the first quarter of 2020, we defined Free Cash Flow and Free Cash Flow from Industrial Activities without excluding from investments in property, plant and equipment the right-of-use assets recognized during the period in accordance with IFRS 16 - Leases. Applying the current definition of Free Cash Flow and Free Cash Flow from Industrial Activities to the three and nine months ended September 30, 2019 would result in an immaterial difference compared to the figures presented below. The following table sets forth our Free Cash Flow and Free Cash Flow from Industrial Activities for the three and nine months ended September 30, 2020 and 2019.

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On November 3, 2020, at 3.00 p.m. CET, management will hold a conference call to present the Q3 2020 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 Calculated using the weighted average diluted number of common shares as of June 30, 2020 (185,460 thousand)
3 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
4 Excluding the XX Programme, racing cars, Fuori Serie, one-off and pre-owned cars
5 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
6 Includes net revenues generated from shipments of our cars, including any personalization net revenues generated on cars, as well as sales of spare parts
7 Includes net revenues generated from the sale of engines to Maserati for use in their cars, and the revenues generated from the rental of engines to other Formula 1 racing teams
8 Includes net revenues earned by our Formula 1 racing team through sponsorship agreements and our share of the Formula 1 World Championship commercial revenues, as well as revenues generated through the Ferrari brand, including merchandising, licensing and royalty income
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 Capitalized as intangible assets
12 For the three and nine months ended September 30, 2020 and 2019 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
13 Free cash flow from industrial activities for the three and nine months ended September 30, 2020 includes approx. Euro 1 million related to withholding taxes, which are expected to be paid

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