2016 05 02 - ferrari - q1 2016 results presentation · note 1, refer to notes to the presentation...

Q1 2016 Results – May 2nd, 2016

This document, and in particular the section entitled “2016 Outlook”, contains forward-looking statements. These statements may include termssuch as “may”, “will”, “expect”, “could”, “should”, “intend”, “estimate”, “anticipate”, “believe”, “remain”, “on track”, “design”, “target”, “objective”, “goal”,“forecast”, “projection”, “outlook”, “prospects”, “plan”, or similar terms. Forward-looking statements are not guarantees of future performance.Rather, they are based on the Group’s current expectations and projections about future events and, by their nature, are subject to inherent risksand uncertainties. They relate to events and depend on circumstances that may or may not occur or exist in the future and, as such, undue relianceshould not be placed on them.Actual results may differ materially from those expressed in such statements as a result of a variety of factors, including: the Group’s ability topreserve and enhance the value of the Ferrari brand; the success of Ferrari’s Formula 1 racing team and the expenses the Group incurs for Formula1 activities; the Group’s ability to keep up with advances in high performance car technology and to make appealing designs for its new models; theGroup’s low volume strategy; the ability of Maserati, the Group’s engine customer, to sell its planned volume of cars; changes in client preferencesand automotive trends; changes in the general economic environment and changes in demand for luxury goods, including high performance luxurycars, which is highly volatile; the impact of increasingly stringent fuel economy, emission and safety standards; the Group’s ability to successfullycarry out its growth strategy and, particularly, the Group’s ability to grow its presence in emerging market countries; competition in the luxuryperformance automobile industry; reliance upon a number of key members of executive management and employees; the performance of theGroup’s dealer network on which the Group depend for sales and services; increases in costs, disruptions of supply or shortages of components andraw materials; disruptions at the Group’s manufacturing facilities in Maranello and Modena; the Group’s ability to provide or arrange for adequateaccess to financing for its dealers and clients; the performance of the Group’s licensees for Ferrari-branded products; the Group’s ability to protectits intellectual property rights and to avoid infringing on the intellectual property rights of others; product recalls, liability claims and productwarranties; exchange rate fluctuations, interest rate changes, credit risk and other market risks; potential conflicts of interest due to director andofficer overlaps with the Group’s largest shareholders and other factors discussed elsewhere in this document.Any forward-looking statements contained in this document speak only as of the date of this document and the Company does not undertake anyobligation to update or revise publicly forward-looking statements. Further information concerning the Group and its businesses, including factorsthat could materially affect the Company’s financial results, is included in the Company’s reports and filings with the U.S. Securities and ExchangeCommission, the AFM and CONSOB.

SAFE HARBOUR STATEMENT

Q1 2016 Results 2May 2nd, 2016 2

Shipments at 1,882 units, increased by 15% vs. previous year– All regions up due to strong start of new models

the 488 GTB, 488 Spider and F12tdf– LaFerrari finishing its limited series run

Financial results – Net revenues at €675 million – Adjusted EBITDA* at €178 million– Net profit of €78 million– Net Industrial Debt* at €782 million– Industrial Free Cash Flow* of €28 million

New key product launched and recent events – Recently presented GTC4Lusso – Scuderia Ferrari achieved 4 podiums so far in 2016,

totaling 700 podiums throughout its racing history– FCA Bank to acquire majority stake in Ferrari

Financial Services AG

2016 upward revised guidance**– Shipments: >7,900 including supercars– Net revenues: ˜€3 billion– Adjusted EBITDA: ≥ €800 million– Net Industrial debt***: ≤ €730 million

* Reconciliation to non-gaap financial measures are provided in the appendix** Assuming FX consistent with current market conditions

*** Including an ordinary cash distribution to the holders of common shares

2016 GUIDANCE REVISED UPWARDS2016 GUIDANCE REVISED UPWARDS

3May 2nd, 2016 3Q1 2016 Results

STRONGEST EVER Q1, ON THE WAY TO ANOTHER RECORD YEAR

(797)

(782)

Shipments (units)

Total shipments up 15% driven by a 21% increase in V8, which was partially offset by a 6% decrease in V12:

621

675

Q1'15

Q1'16

160

178

Q1'15

Q1'16

Net revenues up 8.8% (8.4% at constant FX) mainly driven by “cars and spare parts” as a result of higher volumes partially offset by mix:

35

28

Q1'15

Q1'16

1,635

1,882

Q1'15

Q1'16

Industrial Free Cash Flow*

(€M)

Net revenues (€M)

Adjusted EBITDA*(€M and margin %)

Net Industrial Debt*(€M)

Industrial Free Cash Flow primarily driven by EBITDA, partially offset by Capex and negative change in working capital mainly due to less down-payments received for LaFerrari. Q1 2015 included one-time of €44M

Net Industrial Debt reduced to €782 million primarily due to industrial free cash flow generation

Adj. EBITDA growth primarily driven by higher volume

• Americas: €136M (-11.5%) due to lower sales of LaFerrari

• EMEA: €225M (+27.4%) due to higher shipments of 488 family and F12tdf

• Greater China: €59M (+38.6%) due to volume increase of 488 GTB in China mainland

• Rest of APAC €61M (+8.0%) due to higher shipments of V8 models

18.0%

16.1%

Mar. 31, 2016

Dec. 31, 2015

*Reconciliation to non-gaap financial measures are provided in the appendix

-9

Adjusted EBIT*(€M and margin %) 100

121

Q1'15

Q1'16

Adjusted EBIT increase driven by strong adjusted EBITDA and lower D&A mainly due to 458 family phasing out

26.3%

25.7%

• Strong start for the newly launched 488 GTB and 488 Spider and introduction of the new F12tdf

• Phase out of the FF in line with plans

• LaFerrari finishing its limited series run• GTC4Lusso, distribution will commence in Q3

2016

Q1 2016 HIGHLIGHTS

Q1 2016 Results 4May 2nd, 2016

Americas (28% vs. 31% PY of total shipments)

Americas’ shipments increased by 2%

• USA – Ferrari’s largest single market: growth supported by V8 models (488 GTB and California T) offsetting F12berlinetta at its 5th year of commercialization and LaFerrari completing its life-cycle. The F12tdf just arrived in the market

• First deliveries of F60 America, a strictly limited edition car

Greater China (8% vs. 8% PY of total shipments)

Greater China’s shipments increased by 16%

• China mainland – shipments grew by 67% thanks to the success of 488 GTB

• HK and Taiwan – dropped by few units mainly due to the phase out of 458 family, which was only partially offset by 488 family: shipments are planned to increase in the following quarters also thanks to full contribution of 488 Spider and F12tdf

EMEA (51% vs. 47% PY of total shipments)

EMEA’s shipments increased by 24%

• UK – Ferrari’s largest market in EU recorded 4% growth driven by California T and newly launched 488 family and F12tdf

• Strong performance in Italy (+75% thanks to 488 GTB and the newly launched F12tdf) and in Germany (+74%, as a result of the 488 family and F12tdf). Other Europe and Africa up by 35% thanks to 488 family and F12tdf

Rest of APAC (13% vs. 14% PY of total shipments)

Rest of APAC’s shipments increased by 14%

• Australia – shipments up by 14% driven by 488 GTB which more than compensated phase out of 458 family

• Japan – recorded a slight reduction of 3% mainly due to 488 Spider and F12tdf not yet arrived in the market

• Other APAC – increased double-digit driven by V8 models

Note 1, refer to notes to the presentation in the Appendix

All regions up due to strong start of new models the 488 GTB, 488 Spider and F12tdfdespite 458 family, FF and LaFerrari phasing out

Q1 2016 – SHIPMENTS BY REGION1


429 481

64 57109 11819

52 (7) 9 0 19

Q1 2015 Cars and spare parts Engines Sponsorship, commercial and

brand

Other Q1 2016

Cars and spare parts Engines Sponsorship, commercial and brand Other

• €52M increase in Cars and spare parts due to higher volumes led by new models 488 GTB, 488 Spiderand F12tdf, along with a higher contribution from personalization

• €7M decrease in Engines mainly attributable to lower shipments to Maserati partially offset by higherrental revenues from other Formula 1 Teams

• €9M increase in Sponsorship, commercial and brand mainly due to better championship ranking

Notes 2,3,4 and 5, refer to notes to the presentation in the Appendix

+8.8%(+8.4% constant FX)

2 3

4

5

NET REVENUES BRIDGE Q1 2015-2016


621675€M

• Increased volume of approx. 260 cars (excluding LaFerrari) thanks to the newly launched 488 GTB, 488Spider and F12tdf; positive margin contribution from personalization

• Mix was negatively impacted by higher sales of V8 vs. V12 and lower sales of LaFerrari partially offsetby FXX K and first deliveries of F60 America

• Industrial costs / R&D substantially unchanged. Higher spending for F1 racing activity partially offsetby lower D&A for 458 family and industrial cost savings

• Lower SG&A costs mainly due to timing of the 2016 Formula 1 racing season• Neutral FX impact on transaction exchange rate net of hedging• Other, positive contribution from supporting activities

Margin

15.7%

Margin

19.4%

Adj. EBITDA160

25.7%

Adj. EBITDA178

26.3%

Adj. EBIT Q1'15 Vol Mix Ind. Costs /R&D

SG&A FX Other Adj. EBIT Q1'16

2

100

25 (8) (1) 0 3 121

Margin16.1%

Margin18.0%

*Reconciliation to non-gaap financial measures are provided in the appendix

ADJUSTED EBIT* BRIDGE Q1 2015-2016

7May 2nd, 2016

€M

Q1 2016 Results

(797) 178 (34) (4) (67)(45)

(13)

OtherNet ∆ workingcapital

Tax paid Net capexAdj. EBITDA Mar. 31, 2016 Net Industrial

Debt

Dec. 31, 2015Net Industrial

Debt

Industrial FCF €28M

FX and other

(782)

Starting from Q1 2016 introduced net industrial debt and industrial freecash flow as primary non-gaap measures in order to analyze our financialleverage, capital structure and their change

NET INDUSTRIAL DEBT BRIDGE* DEC 31, 2015 – MAR 31, 2016

€M

Q1 2016 Results 8May 2nd, 2016*Reconciliation to non-gaap financial measures are provided in the appendix

FCA BANK TO ACQUIRE A MAJORITY STAKE INFERRARI FINANCIAL SERVICES AG


Ferrari Financial Services S.p.A. (FFS S.p.A.), an Italian indirect subsidiary of Ferrari N.V., and FCA BankS.p.A. (FCAB) today announced that they have signed a memorandum of understanding for FCAB toacquire a majority stake in Ferrari Financial Services AG (FFS AG), a wholly owned subsidiary of FFSS.p.A.

• FFS S.p.A. and FCAB will continue the operations of FFS AG as joint venture partners, supporting thesales of Ferrari cars in certain European countries by offering innovative vehicle financing solutions toFerrari customers

• The funding of the joint venture will be provided by FCA Bank, which will also be the consolidatingentity

• FFS S.p.A. is Ferrari's own financial services provider based in Maranello, Italy

• The parties agreed not to disclose any financial details about the transaction

• The Memorandum of Understanding will be transformed into a set of definitive agreements later inthe year. The consummation of the transaction is subject to approvals of competition and bankingregulatory authorities

A unique combination of technology,

performance, versatility

and sport luxury

Mid – front naturally aspirated V12 engine:

690 hp @ 8,000 rpm

Max speed in excess

of 335 km/h

Distribution will commence in

Q3 2016 and it will

substitute the FF

California T HSFebruary-MarchHS package launch and intensive test drive program dedicate to customers and HNWIs in Europe and US

Motor ShowGeneva, March 1-3GTC4LUSSO public

presentation and announcement of upcoming

Ferrari’s 70th anniversary More than 3,000

customers and 2,000 prospects attended

GTC4Lusso World PremiereMilan, February 15th

More than 500 customers invited to the new Ferrari V12GT

presentation eventA whole new concept for Ferrari

Q1 2016 – CLIENT RELATION ACTIVITIES

Enriching product offering and experiences for GT customersEnriching product offering and experiences for GT customersQ1 2016 Results 11May 2nd, 2016

Q1 2016 – “CORSE CLIENTI”

Ferrari Challenge APAC, round 1Entered drivers: 35

XX ProgramsEntered drivers: 5 (4 FXX K)

F1 ClientiEntered drivers: 3

Ferrari ChallengeNorth America

Daytona International Speedway

USAJan 28-30

Ferrari Challenge NA, round 1Entered drivers: 36

XX ProgramsEntered drivers: 16 (6 FXXK)

F1 ClientiEntered drivers: 4

24h DaytonaUSA,

Jan 29-31

4th

ClassifiedGTLM Class

12h SebringUSA,

Mar 17-19

1st

ClassifiedGTD Class

GT RacingDebut of the new 488 GT

Ferrari Racing DaysSuzukaSuzuka Circuit – Japan March, 4-6

XX Programs F1 ClientiDe Jerez CircuitSpain March, 17-18


The start of the GT racing seasonThe start of the GT racing season

Licensing activitiesSigned a non-binding memorandum of understanding for the licensing of the design, construction and operation of a new Ferrari theme park to be located in one of the primary cities in Mainland China.New attractions opening at Ferrari World Abu Dhabi

E-commerceSell-out up 14% vs. previous year

Ferrari StoreOpening of the new Riyadh franchised store. Now managing 12 directly operated stores and 26 franchised locations (including 5 Ferrari Store Junior) in 15 markets

MuseumsVisitors up 27% vs. previous year

Q1 2016 – FERRARI BRAND AND STORE PRESENCE


Shipments >7,900

Net Revenues ˜€3 billion

Adj. EBITDA ≥€800 million

Net Industrial Debt ≤€730 million*

Assuming FX consistent with current market conditions

* Including an ordinary cash distribution to the holders of common shares


2016 UPWARD REVISED GUIDANCE

Revised guidance

˜7,900

>€2.9 billion

>€770 million

<€750 million*

Previous guidance

Appendix

1. Shipments geographical breakdownEMEA includes: Italy, UK, Germany, Switzerland, France, Middle East (includes the United ArabEmirates, Saudi Arabia, Bahrain, Lebanon, Qatar, Oman and Kuwait) and Rest of EMEA (includes Africa and the other European markets not separatelyidentified); Americas includes: United States of America, Canada, Mexico, the Caribbean and Central and South America; Greater China includes: China, Hong Kong and Taiwan; Rest of APAC includes: Japan, Australia, Singapore, Indonesia and South Korea

2. Includes the net revenues generated from shipments of our cars, including any personalization revenue generated on these cars and sales of spare parts

3. Includes the 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.

4. 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

5. Primarily includes interest income generated by the Ferrari Financial Services group and net revenues from the management of the Mugello racetrack

Q1 2016 Results

NOTES TO THE PRESENTATION

17May 2nd, 2016

2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016

V8

F430F430 Spider

F430 ScuderiaCalifornia

Scuderia Spider 16M458 Italia

458 SpiderCalifornia 30458 SpecialeCalifornia T

458 Speciale A488 GTB

488 Spider

V12

612 ScagliettiSuperamerica

599 GTB Fiorano599 GTO

SA APERTAFF

F12berlinettaF12tdf

GTC4LussoSupercars

LaFerrari

Special series and one-offs not included

STRONG TRACK-RECORD IN NEW MODELS INTRODUCTIONProduct Line-Up (at least a new model launched every year)


3,351 ~3,400

2,640 ~2,700

610 ~700 1,063 ~1,100

FY 2015 FY 2016E

EMEA Americas Greater China Rest of APAC

>7,9007,664

Note: Graphs not to scale. Shipments including supercar LaFerrari

765950

515

523134

156221

253

Q1 2015 Q1 2016

EMEA Americas Greater China Rest of APAC

1,635

1,882+15%

GROUP SHIPMENTS


€m, except as otherwise stated Q1 ‘16 Q1 ‘15

Worldwide shipments (units) 1,882 1,635

Net revenues 675 621

EBIT 121 96

Adjustments - 4

Adjusted EBIT1 121 100

Net financial (expenses)/income (9) 2

Profit before taxes 112 98

Income tax expense 34 33

Effective tax rate 30.9% 33.5%

Net profit 78 65

EPS 0.41 0.34

Adjusted EPS1 0.41 0.36

EBITDA1 178 156

Adjusted EBITDA1 178 160

1 Reconciliation to non-gaap financial measures are provided in the appendix

KEY PERFORMANCE METRICS


March 31st, 2016 2015 2014

Chinese Yuan 99 106 74

Japanese Yen 24 41 27

Euro 356 22 10

US Dollar 41 1 14

Other Currencies 43 13 9

Total (€m equivalent) 563 183 134

Gross Debt1 Maturity Profile (€M) Cash and Marketable Securities (€M)

Net Cash/Net Industrial Debt (€M)Maintaining a Conservative Industrial Leverage

(1,879)

1,097

March 31, 2016Net Industrial Debt

Funded Self-liquidatingFinancial

Receivables Portfolio

March 31, 2016Net Debt

Net Industrial Debt (€M)Net Industrial Debt in line with EBITDA

(782)

At March 31st At December 31st

2,016 2,015 2,014Gross Debt -2,442 -2,260 -510Cash & Cash Equivalents 563 183 134Deposits in FCA Cash Management Pools 139 942(Net Debt)/Net Cash -1,879 -1,938 566Funded Self-Liquidating Financial 1,097 1,141 1,061Receivables Portfolio

(Net Industrial Debt)/Net Industrial Cash -782 -797 1,627

Undrawn Committed Credit Lines 500 500

Total Available Liquidity 1,063 822 1,076

DEBT AND LIQUIDITY POSITION

21

167333 333 333 333

500

70 74 49

122

1343 2

1

2016 2017 2018 2019 2020 2023Term Loan Bond US Securitization Other Financial Liabilities

May 2nd, 2016

289

537

410 384500

336

Operations are monitored through the useof various Non-GAAP financial measuresthat may not be comparable to othersimilarly titled measures of othercompanies

Accordingly, investors and analysts shouldexercise appropriate caution in comparingthese supplemental financial measures tosimilarly titled financial measures reportedby other companies

We believe that these supplementalfinancial measures provide comparablemeasures of its financial performancewhich then facilitate management’s abilityto identify operational trends, as well asmake decisions regarding future spending,resource allocations and other operationaldecisions

Adjusted Earnings Before Interest and Taxes (“Adjusted EBIT”) represents EBIT asadjusted for income and costs, which are significant in nature, but expected tooccur infrequently

EBITDA is defined as net profit before income tax expense, net financialexpenses/(income) and depreciation and amortization. Adjusted EBITDA isdefined as EBITDA as adjusted for income and costs, which are significant innature, but expected to occur infrequently

Net Industrial Debt defined as Net Debt excluding the funded portion of theself-liquidating financial receivables portfolio, is the primary measure to analyzeour financial leverage and capital structure, and is one of the key indicatorsused to measure our financial position

Free Cash Flow and Free Cash Flow from Industrial Activities are two ofmanagement’s primary key performance indicators to measure the Group’sperformance. Free Cash flow is defined as net cash generated from operationsless cash flows used in investing activities. Free Cash Flow from IndustrialActivities is defined as Free Cash Flow adjusted for the change in the in the self-liquidating financial receivables portfolio.

Non-GAAP financial measures

NON-GAAP FINANCIAL MEASURES


Adjusted earning per share represents earning per share as adjusted for incomeand costs, which are significant in nature, but expected to occur infrequently

€M Q1 ‘16 Q1 ‘15

EBIT 121 96

Expenses incurred in relation to the IPO - 4

Adjusted EBIT 121 100

RECONCILIATION OF NON-GAAP MEASURES: ADJ. EBIT


€M Q1 ‘16 Q1 ‘15

Net profit 78 65

Income tax expense 34 33

Net financialexpenses/(income) 9 (2)

Amortization and depreciation 57 60

EBITDA 178 156

RECONCILIATION OF NON-GAAP MEASURES: ADJ. EBIT


€M Q1 ‘16 Q1 ‘15

EBITDA 178 156

Expenses incurred in relation to the

IPO- 4

Adjusted EBITDA 178 160

RECONCILIATION OF NON-GAAP MEASURES: ADJ. EBITDA


€M Q1 ‘16 Q1 ‘15

EPS 0.41 0.34

Expenses incurred in relation to the IPO - 0.02

Adjusted EPS 0.41 0.36

RECONCILIATION OF NON-GAAP MEASURES: ADJ. EPS


* Q1 2015 industrial free cash flow1 included a Euro 44 million one-time cash in-flow related to a partial reimbursement by Maserati of its inventory in China

€M Q1 ‘16 Q1 ‘15

Cash flows from operating activities 112 63

Cash flows used in investing activities (67) (77)

Free Cash Flow 45 (14)

Change in the self-liquidating financial receivables portfolio

(17) 49

Free Cash Flow from Industrial Activities 28 35*

RECONCILIATION OF NON-GAAP MEASURES: FREE CASH FLOW AND FREE CASH FLOW FROM INDUSTRIAL ACTIVITIES


€M March 31, 2016 December 31, 2015

Net Industrial Debt (782) (797)

Funded portion of the self-liquidating financial receivables portfolio 1,097 1,141

Net Debt (1,879) (1,938)

Financial liabilities with FCA Group - (3)

Deposits in FCA Group cash management pools - 139

Cash and cash equivalents 563 183

Debt (2,442) (2,257)

RECONCILIATION OF NON-GAAP MEASURES: NET DEBT AND NET INDUSTRIAL DEBT


2016 05 02 - ferrari - q1 2016 results presentation · note 1, refer to notes to the presentation...

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