Release Date: August 01, 2024
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
- Ferrari NV (RACE, Financial) reported strong Q2 financial results with revenues of EUR1.7 billion, up 16% year-over-year.
- The company achieved a net profit of EUR413 million, driven by a robust product mix and increased personalization.
- Ferrari NV (RACE) upgraded its 2024 guidance, reflecting stronger personalization and increased visibility for the remainder of the year.
- The order book for new models, including the 12Cilindri Spider and Coupe, is solid and extends well into 2026.
- The new e-building, dedicated to sustainable innovation, will house the development and production of ICE, hybrid, and full electric models, enhancing Ferrari's technological capabilities.
Negative Points
- Shipments increased by less than 3%, indicating slower growth in unit deliveries compared to revenue growth.
- Deliveries decreased by roughly 60 units in Mainland China, Hong Kong, and Taiwan, highlighting regional challenges.
- The EBIT margin for Q2 2024 was 29.9%, slightly lower than the exceptional 40% margin in Q2 2023.
- Higher SG&A expenses were noted, reflecting increased marketing and brand investments, which could impact profitability.
- The company faces ongoing challenges in managing the balance between volume growth and maintaining high levels of personalization and exclusivity.
Q & A Highlights
Q: Benedetto, when you talk about the order book being full through 2026, is there a greater focus on price and mix with slow growth in units, or could we see an acceleration in unit growth?
A: We'll prioritize mix and price with slower growth. The guidance and margin are driven by our mix development and expense incidents. For 2025 and 2026, we'll provide more details next year.
Q: Can you help us understand the increase in personalization, and how the mix of cars influences that?
A: Personalization is around 20%, driven by demand for carbon finishes. The mix of cars doesn't significantly impact this percentage. We are strengthening our supply chain to meet personalization demands.
Q: Have you seen any geographic areas where the market has not been as strong as expected for the 12Cilindri?
A: The 12Cilindri has strong traction globally, except in China due to additional tax burdens. Overall, the model has stronger traction than its predecessors.
Q: Could you discuss the possibility of seeing average prices moving higher in the second half?
A: Average prices in the second half may be slightly lower due to fewer Daytona deliveries but more SF90 XX deliveries. Overall, the impact should be minimal.
Q: Are you now expecting personalization levels to be more sustainably at 20%?
A: We expect personalization to remain around 19% for the rest of the year. Flexibility and agility in our supply chain will help us meet client demands.
Q: What feedback are you getting from dealers regarding showroom visits and interest?
A: We see no signs of weakness. Showroom visits and client interest remain strong, with high engagement at events and launches.
Q: Can you provide insights into the order book length for the 12Cilindri and overall order book normalization?
A: The 12Cilindri Coupe has an order book of over 20 months, while the Spider exceeds two years. The overall order book remains flat, with new models contributing to its growth.
Q: Any color on the pattern of new Ferrari clients, including distribution by country, age, and powertrain preferences?
A: No significant changes in client demographics or preferences by country or age. New clients also show a strong interest in personalization.
Q: Could you provide a rough indication of financial charges by year-end?
A: Financial charges are expected to be in the region of last year's numbers, around [15].
Q: How is the personalization rate looking for the Purosangue in the second quarter and the rest of the year?
A: New clients are also keen on personalization, and we expect the rate to remain around 19%. We are continuously analyzing data to adapt to client preferences.
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
