Q Results November 2 nd, 2017

Transcription

1 Q Results November 2 nd,

2 SAFE HARBOUR STATEMENT This document, and in particular the section entitled 2017 Outlook, contains forward-looking statements. These statements may include terms such as may, will, expect, could, should, intend, estimate, anticipate, believe, remain, on track, successful, grow, 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 risks and uncertainties. They relate to events and depend on circumstances that may or may not occur or exist in the future and, as such, undue reliance should 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 to preserve and enhance the value of the Ferrari brand; the success of Ferrari s Formula 1 racing team and the expenses the Group incurs for Formula 1 activities; the Group s ability to keep up with advances in high performance car technology and to make appealing designs for its new models; the challenges and costs of integrating hybrid technology more broadly into Group s car portfolio over time; the Group s ability to preserve its relationship with the automobile collector and enthusiast community; the Group s low volume strategy; the ability of Maserati, the Group s engine customer, to sell its planned volume of cars; changes in client preferences and automotive trends; changes in the general economic environment and changes in demand for luxury goods, including high performance luxury cars, which is highly volatile; the impact of increasingly stringent fuel economy, emission and safety standards, including the cost of compliance, and any required changes to its products; the Group s ability to successfully carry out its growth strategy and, particularly, the Group s ability to grow its presence in emerging market countries; the Group s ability to service and refinance its debt; competition in the luxury performance automobile industry; reliance upon a number of key members of executive management, employees and the ability of its current management team to operate and manage effectively; the performance of the Group s dealer network on which the Group depend for sales and services; increases in costs, disruptions of supply or shortages of components and raw materials; disruptions at the Group s manufacturing facilities in Maranello and Modena; the Group s ability to provide or arrange for adequate access to financing for its dealers and clients, and associated risks; the performance of the Group s licensees for Ferrari-branded products; the Group s ability to protect its intellectual property rights and to avoid infringing on the intellectual property rights of others; product recalls, liability claims and product warranties; continued compliance with customs regulations of various jurisdictions; labor relations and collective bargaining agreements; exchange rate fluctuations, interest rate changes, credit risk and other market risks; changes in tax, tariff or fiscal policies and regulatory, political and labor conditions in the jurisdictions in which the Group operates; ability to ensure that its employees, agents and representatives comply with applicable law and regulations; the adequacy of its insurance coverage to protect the Group against potential losses; potential conflicts of interest due to director and officer overlaps with the Group s largest shareholders; ability to maintain the functional and efficient operation of its information technology systems 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 any obligation to update or revise publicly forward-looking statements. Further information concerning the Group and its businesses, including factors that could materially affect the Company s financial results, is included in the Company s reports and filings with the U.S. Securities and Exchange Commission, the AFM and CONSOB. 22

3 A RECORD THIRD QUARTER Solid revenues of 836 million (+7%) driving adj. EBIT (1) to 202 million (+17%) Ferrari Portofino presented in September, already with a robust waiting list Strong success of Ferrari s client relations activities 2017 Outlook revised upward ON THE WAY TO 1 BILLION EURO ADJ. EBITDA Note:(1) Reconciliations to non-gaap financial measures are provided in the appendix 3

4 Q HIGHLIGHTS Shipments (units) Q3 '17 Q3 '16 2,046 1,978 Net revenues ( M) Q3 ' % +6.7% Q3 ' Total shipments up 68 units mainly driven by 27% increase in V12 models. Few units decrease of V8 mostly due to the California T phase-out: The GTC4Lusso and the 488 families The California T and the F12berlinetta continue to perform strongly phasing-out, as well as F12tdf finishing its LaFerrari Aperta fully contributing limited series run The 812 Superfast just arrived in EMEA Deliveries of the Ferrari Portofino will commence in 2018 Net revenues up 6.7% (9.3% at constant currencies, mainly due to USD weakening vs. Euro) Cars and spare parts leading the way with volume, mix and pricing Partially offset by Engines due to the termination of the rental agreement with a Formula 1 racing team and slightly lower sales to Maserati due to a different production schedule as well as the deconsolidation of the European Financial Services business (November 2016) Adjusted EBITDA (1) ( M and margin %) Q3 '17 Q3 ' % % Adjusted EBIT (1) ( M and margin %) Q3 ' % +13.2% +17.3% Q3 ' % Adjusted EBITDA (1) grew by 13.2%, primarily driven by higher volumes, mix thanks to LaFerrari Aperta and pricing. Partially offset by higher R&D expenses for innovation, components and hybrid technology. Adjusted EBIT (1) margin increased by 220 bps driven by strong adjusted EBITDA (1) Industrial free cash flow (1) ( M) Q3 '17 Q3 ' Industrial free cash flow (1) driven by strong adjusted EBITDA (1), partially offset by net change in working capital, capex and lack of contribution from advances of LaFerrari Aperta. Second 2017 tax advance payment will impact next quarter. Net industrial debt (1) ( M) Sept. 30, 2017 Dec. 31, 2016 (653) (485) -17.4% -25.7% Net industrial debt (1) reduced to 485 million thanks to positive industrial free cash flow (1) generation Note: (1) Reconciliations to non-gaap financial measures are provided in the appendix. Q Results Certain totals in the tables included in this document may not add due to rounding. November 2 nd,

5 Q SHIPMENTS BY REGION (2) Americas (36% vs. 35% PY) China, Hong Kong and Taiwan, on a combined basis (7% vs. 9% PY) Rest of APAC (13% vs. 12% PY) EMEA (44% vs. 44% PY) Americas +5.0% USA increased by 1% with a strong performance of the 488 family, the GTC4Lusso and the limited edition LaFerrari Aperta. Partially offset by California T and the F12berlinetta phasing-out. The F12tdf is finishing its limited series run. The GTC4Lusso T and the 812 Superfast yet to arrive on the market EMEA: +5.1% UK up almost 3% thanks to the 488 and the GTC4Lusso families while the 812 Superfast is yet to arrive on the market. The California T and the F12berlinetta phasing-out, while the F12tdf is finishing its limited series run. Double-digit growth in Italy (+24%) and France (+23%) thanks to the 488 and the GTC4Lusso families as well as the 812 Superfast just arrived on the market. Germany flat due to the California T and the F12berlinetta phasing-out. Other European countries up double-digit, while Middle East recorded a decrease due to reallocation triggered by tough market conditions China, Hong Kong and Taiwan, on a combined basis: -15.6% China mid single-digit growth supported by the GTC4Lusso family. 812 Superfast is yet to arrive on the market. Hong Kong slowdown as the new dealership became fully operational in Q Taiwan few units decrease due to the California T and the F12berlinetta phasing-out Rest of APAC: +7.1% Japan shipments up 16% thanks to V8 models, the GTC4Lusso and LaFerrari Aperta. Partially offset by the F12berlinetta phasing-out and the F12tdf finishing its limited series run. Australia substantially in line with prior year Other APAC shipments in line with prior year SOLID PERFORMANCE OF THE 488 AND THE GTC4LUSSO FAMILIES AS WELL AS LAFERRARI APERTA. 812 SUPERFAST JUST ARRIVED IN EMEA Q Results Note: (2) Refer to notes to the presentation in the Appendix November 2 nd,

6 NET REVENUES BRIDGE Q ( M) % -9.8% -1.3% -18.8% 68 (9) (1) (5) %, + 53 million (+9.3% at constant currencies, mainly due to USD weakening vs. Euro) (3) (4) Q Cars and spare parts Engines Sponsorship, commercial and brand(5) (6) Other Q Cars and spare parts Engines Sponsorship, commercial and brand Other Cars and spare parts: higher volumes and positive mix led by the 488 and the GTC4Lusso families, as well as LaFerrari Aperta along with a greater contribution from personalization programs and pricing increases. Partially offset by the non-registered racing car FXX K completing its limited series run in Engines: slight decrease due to the termination of the rental agreement with a Formula 1 racing team and slightly lower sales to Maserati due to a different production schedule Sponsorship, commercial and brand: almost in line with prior year mostly due to lower 2016 championship ranking compared to Partially offset by higher sponsorship revenues and brand related revenues. Other: decrease mostly due to the deconsolidation of the European Financial Services business since November 2016 Q Results Note: Refer to notes to the presentation in the Appendix November 2 nd,

7 ( M) 172 ADJ. EBIT BRIDGE Q (1) (8) (2) (21) Margin 22.0% Margin 22.7% (7) Margin 22.6% (7) Margin 24.2% Adj. EBIT Q FX hedges Q Adj. EBIT Q w/o FX hedges Adj. EBITDA Vol. Mix Ind. Costs / R&D SG&A FX Other Adj. EBIT Q w/o FX hedges Adj. EBITDA FX hedges Q Adj. EBIT Q Top high end Adj. EBITDA w/o FX hedges (7) w/o FX hedges (7) Adj. EBITDA EBITDA Margin (8) 30.0% 30.5% 30.4% 31.8% 33% - 37% Volume increase of approx. 55 cars (excluding LaFerrari Aperta) thanks to the GTC4Lusso and the 488 families, together with positive contribution from personalization. Partially offset by the California T and the F12berlinetta phasing-out. Positive mix impacted by LaFerrari Aperta as well as pricing increases. This was partially offset by the non-registered racing car FXX K that completed its limited series run in Industrial costs / R&D increased mainly due to higher R&D expenses to support product range and components innovation for hybrid technology. Partially offset by lower spending in F1 activities. SG&A slightly higher than prior year, impacted by costs related to the 70 th anniversary and the approved Long-Term Incentive plan. Partially offset by the deconsolidation of the European Financial Services business since November FX, excluding hedges, negatively impacted mostly due to USD, JPY and GBP depreciation Other in line with previous year due to positive contribution from supporting activities, offset by lower 2016 championship ranking compared to 2015, the termination of the rental agreement with a Formula 1 racing team and the deconsolidation of the European Financial Services business since November 2016 luxury peers (8) Note: (1) Reconciliations to non-gaap financial measures are provided in the appendix Q Results (7) Margins without FX hedges have been calculated excluding FX hedges impact from net revenues, adjusted EBIT and adjusted EBITDA (8) Ferrari s elaboration on FY 2016 publicly available data on a panel of high end luxury peers November 2 nd,

8 NET INDUSTRIAL DEBT BRIDGE (1) JUN 30, 2017 SEPT 30, 2017 ( M) Industrial FCF 147m 266 (627) 9 (34) (1) (93) (1) (4) (485) June 30, 2017 Net Industrial Debt EBITDA Net working capital Tax paid Capex Other Cash distribution and dividends paid FX and other September 30, 2017 Net Industrial Debt Net change in working capital: decreases in trade payables and inventory due to seasonality in conjunction with the scheduled summer shutdown Tax paid: second 2017 tax advance payment will impact Q Other: positively impacted by accruals and reserves related to deferred compensations as well as provisions, partially offset by lack of contribution from advances of LaFerrari Aperta Q Results Note: (1) Reconciliations to non-gaap financial measures are provided in the appendix November 2 nd,

9 A GT that represents a unique combination of sportiness, elegance and on board comfort The renowned Ferrari V8 turbo, part of the engine family that was nominated International Engine of the Year in both 2016 and 2017, now punches out 40 cv more than the California T s power unit Capable of unleashing a massive 600 cv, the Ferrari Portofino is the most powerful convertible to combine the advantages of a retractable hard top, a roomy boot and generous cockpit space plus two rear seats suitable for short trips. 99

10 Q CLIENT RELATIONS ACTIVITIES WORLD TOUR China, August 12 th 17 th USA, August 18 th 20 th Italy, September 2 nd 3 rd Italy, September 8 th 10 th Maranello Weekend September 8 th 10 th RM Auction Concours d Elegance Celebration of 70 th anniversary at home Portofino World Premiere September 7 th - 8 th Frankfurt Motorshow September 12 th - 24 th Florence, Italy September 25 th 30 th 10

11 Q ATTIVITA SPORTIVE GT COMPETIZIONI GT FIA WEC 1 st - 6 Hours of Circuit of the Americas (GTE-Pro) IMSA 2017 Team, Drivers and Manufacturer Champions (GTD) FERRARI CHALLENGE Average entries per round EUROPE 41 (round 5) NORTH AMERICA 45 (round 6) ASIA PACIFIC 29 (round 6) XX PROGRAMS / F1 CLIENTI Average entries per round XX: 23 F1: 8 CONTINUOUSLY ENGAGING WITH OUR CUSTOMERS 11

12 Q OTHER ACTIVITIES Licensing Launch of Bianchi for Scuderia Ferrari project with SF01 world premiere at Eurobike show New license agreement with Cybex for Scuderia Ferrari infant car seats and a collection of strollers Retail At the end of September 2017, managing 18 directly operated stores and 29 franchised locations (including 7 Ferrari Store Junior). New Store at Scalo Milano opened in September 2017 Museums More than 432,000 visitors since the beginning of the year between Maranello and Modena, up 11% vs. prior year 12

13 2017 OUTLOOK REVISED UPWARD Revised Outlook Previous Outlook 2017 Drivers Shipments ~ 8,400 (9) Same Strong contribution from range models (including special liveries) and LaFerrari Aperta Net Revenues ~ 3.4 billion > 3.3 billion Top line growth driven by Cars and spare parts as well as Engines, partially offset by different F1 ranking and deconsolidation of the European Financial Services business Adj. EBITDA (1) ~ 1 billion > 950 million Positive contribution from both Volume and Mix, partially offset by R&D and SG&A (F1, new stores and 70 th anniversary) Net Industrial Debt (1) < 500 million (10) ~ 500 million (10) Strong adj. EBITDA, partially offset by capex to support continuous product range renewal and R&D for hybridization, taxes, lack of advances on limited edition supercars and cash distributions to holders of common shares Note: (1) Reconciliations to non-gaap financial measures are provided in the appendix (9) Including supercars (10) Including a cash distribution to the holders of common shares and excluding potential share repurchases 13

14 Q&A 14

15 Appendix

16 NOTES TO THE PRESENTATION 1. Reconciliations to non-gaap financial measures are provided in the appendix 2. Shipments geographical breakdown 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; China, Hong Kong and Taiwan includes, on a combined basis: China, Hong Kong and Taiwan; Rest of APAC includes: Japan, Australia, Singapore, Indonesia and South Korea 3. Includes the net revenues generated from shipments of our cars, including any personalization revenue generated on these cars and sales of spare parts 4. 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 5. 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 6. Primarily includes interest income generated by our financial services activities and net revenues from the management of the Mugello racetrack 7. Margins without FX hedges have been calculated excluding FX hedges impact from net revenues, adjusted EBIT and adjusted EBITDA 8. Ferrari s elaboration on FY 2016 publicly available data on a panel of high end luxury peers 9. Including supercars 10.Including a cash distribution to the holders of common shares and excluding potential share repurchases 16

17 V12 V8 STRONG TRACK-RECORD IN NEW MODELS INTRODUCTION Product Line-Up (at least a new model launched every year) F430 F430 Spider F430 Scuderia California Scuderia Spider 16M 458 Italia 458 Spider California Speciale California T Portofino 458 Speciale A 488 GTB 488 Spider GTC4Lusso T 612 Scaglietti Superamerica 599 GTB Fiorano 599 GTO SA APERTA FF F12berlinetta F12tdf GTC4Lusso 812 Superfast Supercars LaFerrari LaFerrari Aperta Special series and one-offs not included 17

18 LIMITED SERIES In and out from our portfolio F12tdf LaFerrari LaFerrari Aperta FXX K (11) F60 America (11) J50 (11) Q Results Note: (11) Models not included in the total shipments figure provided November 2 nd,

19 GROUP SHIPMENTS (2) 1, % 2, , , % 6, ,078 8,014 1, ,687 ~8,400 ~1,150 ~650 ~2, ,762 2,938 3,610 ~3,800 Q Q M M 2017 FY 2016 FY 2017E EMEA Americas China, Hong Kong and Taiwan, on a combined basis Rest of APAC Note: (2) Refer to notes to the presentation in the Appendix Graphs not to scale. Shipments including supercars LaFerrari and LaFerrari Aperta 19

20 KEY PERFORMANCE METRICS Q3 '17 Q3 '16 M, unless otherwise stated 9M '17 9M '16 2,046 1,978 Worldwide shipments (units) 6,381 6, Net revenues 2,577 2, EBITDA (1) Adjustments Adjusted EBITDA (1) Amortization and depreciation EBIT Adjusted EBIT (1) Net financial expenses Profit before taxes Income tax expense % 29.8% Effective tax rate 28.0% 30.4% Net profit Adjusted net profit (1) Basic and diluted EPS ( ) Adjusted EPS (1) ( ) Note: (1) Reconciliations to non-gaap financial measures are provided in the appendix. Certain totals in the tables included in this document may not add due to rounding. 20

21 DEBT AND LIQUIDITY POSITION Cash Maturities Gross Debt Maturity Profile ( M) Term Loan Bond US Securitizations Other Financial Liabilities Net Cash/Net Industrial Debt ( M) Cash and Marketable Securities ( M) Sep. 30 Jun. 30 Mar. 31 Adj. ( M) FY 2016 FY 2015 (12) FY 2015 Euro US Dollar Chinese Yuan Japanese Yen Other Currencies Total ( equivalent) Net Industrial Debt ( M) At Sep. 30 At Jun. 30 At Mar. 31 At Dec. 31 ( M) Gross Debt (1,798) (1,755) (1,870) (1,848) (2,260) Cash & Cash Equivalents Deposits in FCA Cash Management Pools (Net Debt)/Net Cash (1,179) (1,332) (1,301) (1,390) (1,938) Funded Self-Liquidating Financial ,141 Receivables Portfolio (Net Industrial Debt)/Net Industrial Cash (485) (627) (578) (653) (797) Undrawn Committed Credit Lines (1,179) September 30, 2017 Net Debt 694 o/w 79% securitized (13) Funded Self-liquidating Financial Receivables Portfolio (485) September 30, 2017 Net Industrial Debt Total Available Liquidity 1, , Note: (12) After settlement of deposits on FCA Group cash management pools and financial liabilities with FCA Q Results (13) Portion of the Self-liquidating Financial Receivables Portfolio funded through securitizations Certain totals in the tables included in this document may not add due to rounding. November 2 nd,

22 NON-GAAP FINANCIAL MEASURES 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 our 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 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 income and costs, which are significant in nature, but expected to occur infrequently. Adjusted Earnings Before Interest and Taxes ( Adjusted EBIT ) represents EBIT as adjusted for income and costs, which are significant in nature, but expected to occur infrequently Adjusted net profit represents net profit as adjusted for income and costs, which are significant in nature, but expected to occur infrequently Adjusted earnings per share represents earnings per share as adjusted for income and costs, which are significant in nature, but expected to occur infrequently Net Industrial Debt defined as Net Debt excluding the funded portion of the selfliquidating financial receivables portfolio, is the primary measure to analyze our financial leverage and capital structure, and is one of the key indicators used to measure our financial position 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 net cash generated from operations less cash flows used in investing activities. Free Cash Flow from Industrial Activities is defined as Free Cash Flow adjusted for the change in the self-liquidating financial receivables portfolio. 22

23 RECONCILIATION OF NON-GAAP MEASURES: ADJUSTED EBIT Q3 '17 Q3 '16 M 9M '17 9M ' EBIT Charges for Takata airbag inflator recalls Adjusted EBIT

24 RECONCILIATION OF NON-GAAP MEASURES: EBITDA Q3 '17 Q3 '16 M 9M '17 9M ' Net profit Income tax expenses Net financial expenses Amortization and depreciation EBITDA

25 RECONCILIATION OF NON-GAAP MEASURES: ADJUSTED EBITDA Q3 '17 Q3 '16 M 9M '17 9M ' EBITDA Charges for Takata airbag inflator recalls Adjusted EBITDA

26 RECONCILIATION OF NON-GAAP MEASURES: ADJUSTED NET PROFIT Q3 '17 Q3 '16 M 9M '17 9M ' Net profit Charges for Takata airbag inflator recalls (net of tax effect) Adjusted net profit

27 BASIC AND DILUTED EPS Q3 '17 Q3 '16 M (unless otherwise stated) 9M '17 9M ' , ,923 Net profit attributable to owners of the Company Weighted average number of common shares (thousand) , , Basic EPS ( ) , ,923 Weighted average number of common shares for diluted earnings per common share (thousand) 189, , Diluted EPS ( )

28 RECONCILIATION OF NON-GAAP MEASURES: ADJUSTED EPS Q3 '17 Q3 '16 per common share 9M '17 9M ' EPS Charges for Takata airbag inflator recalls (net of tax effect) Adjusted EPS

29 RECONCILIATION OF NON-GAAP MEASURES: FREE CASH FLOW AND FREE CASH FLOW FROM INDUSTRIAL ACTIVITIES Q3 '17 Q3 '16 M 9M '17 9M ' Cash flow from operating activities (93) (75) Cash flows used in investing activities (14) (247) (232) Free Cash Flow Change in the self-liquidating financial receivables portfolio Free Cash Flow from Industrial Activities Note: (14) Cash flow used in investing activities for the nine months ended September 30, 2017 excludes proceeds from exercising the Delta Topco option of Euro 8 million 29

30 RECONCILIATION OF NON-GAAP MEASURES: NET INDUSTRIAL DEBT M September 30, 2017 June 30, 2017 March 31, 2017 December 31, 2016 Net Industrial Debt (485) (627) (578) (653) Funded portion of the self-liquidating financial receivables portfolio Net Debt (1,179) (1,332) (1,301) (1,390) Cash and cash equivalents Gross Debt (1,798) (1,755) (1,870) (1,848) 30