Ferrari N.V. (NYSE:RACE) Q4 2024 Earnings Call Transcript
Access earnings results, analyst expectations, report, slides, earnings call, and transcript.
Overview
Ferrari's earnings call highlights strong financial performance, including double-digit revenue growth and increased net profit. The launch of six new models, including an electric one, and significant progress towards carbon neutrality are positive indicators. Shareholder returns through dividends and repurchases further boost sentiment. While competitive pressures and supply chain challenges exist, Ferrari's strategic initiatives and optimistic outlook, particularly in personalization and sponsorship growth, outweigh these risks. The Q&A session reinforced confidence in margin expansion and price increases, supporting a positive sentiment.
Key Financial Performance
Revenue €6.7 billion, with double-digit growth versus the previous year.
Net Profit €1.5 billion, up 22.6% versus the prior year.
EBITDA Margin 38.3%, despite continued inflationary pressure and higher expenses.
EBIT Margin 28.3%, benefiting from a favorable product mix and cost management.
Industrial Free Cash Flow €1.027 billion, surpassing the €1 billion threshold for the first time.
Diluted EPS €8.46, up 22.6% versus the prior year.
Capital Expenditure €990 million, a peak within the current business plan.
Net Industrial Debt €180 million at the end of December 2024.
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Operating Highlights
New Product Launches: In 2024, Ferrari launched three new models: the supercar F80, and the 12Cilindri Coupe and Spider. The F80 features a V6 hybrid powertrain derived from the 499P racing car.
Electrification Progress: The F80 represents a significant advancement in Ferrari's electrification journey, with all battery modules and electric components developed in-house.
Market Positioning: Ferrari's order book for current models covers the entire 2026, indicating strong demand and effective market positioning.
Client Loyalty: In 2024, approximately 81% of new car sales were to existing Ferrari clients, showcasing strong brand loyalty.
Operational Efficiency: Ferrari's industrial free cash flow generation surpassed €1 billion for the first time, indicating strong operational efficiency.
Infrastructure Development: The new E-building and accelerated construction of a new paint shop enhance production flexibility.
Strategic Goals: Ferrari aims for carbon neutrality by 2030 and has made significant progress by shutting down its trigeneration plant and increasing reliance on renewable energy.
Future Plans: In 2025, Ferrari plans to launch six new models and enhance client experiences, while continuing to invest in brand visibility and sustainability.
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Risk or Challenges
Competitive Pressures: Ferrari faces ongoing competitive pressures in the luxury sports car market, necessitating continuous innovation and product differentiation to maintain its market position.
Regulatory Issues: The company is subject to changing regulations, particularly regarding emissions and environmental standards, which could impact production costs and operational strategies.
Supply Chain Challenges: Ferrari is experiencing ongoing supply chain challenges that may affect production timelines and costs, particularly in the context of rising expenses and inflation.
Economic Factors: Global economic uncertainty poses risks to consumer spending on luxury goods, which could impact Ferrari's sales and profitability.
Tax Rate Changes: The effective tax rate is expected to increase to around 22.5% due to the expiration of the previous Patent Box regime, which may affect net profitability.
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Guidance & Outlook
New Model Launches: In 2025, Ferrari plans to launch six new models, including the highly anticipated electric model in Q4.
Carbon Neutrality Goal: Ferrari aims for carbon neutrality by 2030, with significant progress made in 2024, including the shutdown of a trigeneration plant and reliance on renewable energy.
Client Engagement Initiatives: Ferrari will enhance client experiences through exclusive events and personalized offerings.
Sponsorship Growth: New sponsorships, including HP as the title sponsor of Scuderia Ferrari, are expected to boost racing revenues.
Revenue Expectations: For 2025, Ferrari anticipates continued growth in revenues driven by product mix and personalization.
EBITDA Margin: The EBITDA margin is expected to gradually progress, supported by a positive product and country mix.
CapEx Projections: Capital expenditures for 2025 are projected at approximately €900 million, lower than the previous year.
Industrial Free Cash Flow: Industrial free cash flow generation is expected to be sustained by profitability, despite negative changes in working capital.
Tax Rate: The effective tax rate for 2025 is estimated to be around 22.5%.
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Shareholder Return Plan
Dividends Returned to Shareholders: An amount of more than €1 billion was returned to shareholders through a combination of dividends and share repurchases throughout the year.
Share Repurchase Program: An amount of more than €1 billion was returned to shareholders through a combination of dividends and share repurchases throughout the year.
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Key Q&A
Q:Regarding your model rollout, 6 new models in 2025. Is that purely on the financial side, or also operationally? Do you have any concern about launching too many models in one year?
A:We are always pushing for new clients, both for thermal and hybrid cars. We are focusing on different kinds of cars for different clients. We want to maintain our luxury brand status and not just produce a few models with high volumes.
Q:Can you explain how your mix flows through to your P&L? What are the key drivers of your margin expansion?
A:The mix includes product mix, country mix, and personalization. The contribution from personalization has increased significantly, and we expect this trend to continue.
Q:Could you confirm if there are significant price increases for the Purosangue starting in 2025?
A:Yes, there is a planned price increase for the Purosangue starting January 1st, 2025.
Q:Can you provide an update on the warranty program for the battery?
A:We launched the warranty in September, and around 350 contracts have been signed in 4 months.
Q:How many Daytonas shipped in the fourth quarter?
A:46 Daytonas shipped in the fourth quarter.
Q:What are your expectations for D&A in 2025?
A:D&A will be lower in 2025 due to model phase-outs and the impact of the new E-building.
Q:What is the average number of orders per customer?
A:We do not track the average number of orders per customer as it varies significantly.
Q:Review of Unclear Management Responses
A:Management avoided giving a direct answer regarding the average number of orders per customer, stating that it varies significantly and is not tracked.
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Earnings Word Cloud
The most frequently occurring keywords in this quarter's earning call
Box regime
Capital Market
Cilindri Coupe
Daytona SP
EBIT margin
Ferrari
GTS
HP
Maranello
Patent Box
Personalizations
Purosangue
Scope
advancement
brand investment
car product
certification
challenge
client experience
dedication colleague
digit
electric
goal
hedge
lifestyle activity
loyalty client
model Cilindri
paint shop
passion
personalization product
product country
product offering
progress
share line
source
tax payment
tax rate
trajectory
RACE Transcript
Ferrari N.V. (RACE) Q3 2025 Earnings Call Transcript
Positive11-4
Ferrari's earnings call reflects strong financial performance and strategic growth. High EBITDA and EBIT margins, along with robust cash flow, indicate solid profitability. The strategic product development and strong order book, especially for new models like Amalfi, highlight demand strength. Despite challenges like tariffs and FX headwinds, Ferrari maintains pricing power and innovation. Guidance remains strong, with no reduction in shareholder returns. While some uncertainties exist, such as the Elettrica margin impact, overall sentiment is positive, suggesting a likely 2-8% stock price increase.
Ferrari N.V. (RACE) Q2 2025 Earnings Call Transcript
Positive7-31
The earnings call summary shows strong financial performance with growing revenues, high EBITDA, and effective cost management. Although there are concerns about U.S. tariffs, the guidance remains optimistic, and no program delays are reported. The Q&A highlights strong demand for new models and positive market strategies, despite some pressure on residual values. The overall sentiment is positive, driven by strong earnings, optimistic guidance, and a commitment to sustainability and innovation.
Ferrari N.V. (RACE) Q1 2025 Earnings Call Transcript
Positive5-6
The earnings call summary reveals strong financial performance with increased revenues, EBITDA, and net profit. The new model launches and sponsorship growth are promising, while the dividend distribution and share purchase program indicate shareholder confidence. Despite some risks like exchange rates and supply chain challenges, the company's hedging and strategic initiatives mitigate these concerns. The Q&A section supports the positive sentiment with no significant negative trends observed. Overall, the positive financial results, strategic growth plans, and shareholder returns suggest a positive stock price movement over the next two weeks.
Ferrari N.V. (NYSE:RACE) Q4 2024 Earnings Call Transcript
Positive2-5
Ferrari's earnings call highlights strong financial performance, including double-digit revenue growth and increased net profit. The launch of six new models, including an electric one, and significant progress towards carbon neutrality are positive indicators. Shareholder returns through dividends and repurchases further boost sentiment. While competitive pressures and supply chain challenges exist, Ferrari's strategic initiatives and optimistic outlook, particularly in personalization and sponsorship growth, outweigh these risks. The Q&A session reinforced confidence in margin expansion and price increases, supporting a positive sentiment.
RACE Report
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