Q Results November 5 th, 2018

Transcription

1 Q Results November 5 th,

2 SAFE HARBOUR STATEMENT This document, and in particular the section entitled Confirming 2018 Guidance contains forward-looking statements. These statements may include terms such as may, will, expect, could, should, intend, estimate, anticipate, believe, remain, continue, on track, successful, grow, design, target, objective, goal, forecast, projection, outlook, prospects, plan, guidance 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, including changes in some of the markets in which we operate, 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 achieve its key financial targets and financial policy; 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, including possible future bans of combustion engine cars in cities and the potential advent of self-driving technology; 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, including our ability to defend from the risk of cyberattacks on our in-vehicle technology, and other factors discussed elsewhere in this document. The Group expressly disclaims and does not assume any liability in connection with any inaccuracies in any of the forward-looking statements in this document or in connection with any use by any third party of such forward-looking statements. 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. 2

3 SUSTAIN DELIVERY OF 2018 TARGETS Solid industrial free cash flow (1) generation of 100 million, with net industrial debt already in line with full year guidance, and adj. EPS (1) of 0.78 Patent Box agreement signed Three-year period benefit 141 million (2), with positive cash impact which will be realized in Q4 New special series 488 Pista Spider presented at the Paris Motorshow New Icona pillar unveiled with the Ferrari Monza SP1 and SP2 Confirming 2018 guidance Capital Markets Day held on September 18, 2018, Management outlined the plans and initiatives to achieve its key financial targets and its financial policy to 2022 ON THE WAY TO ANOTHER STRONG YEAR Note:(1) Reconciliations to non-gaap financial measures are provided in the Appendix (2) The Italian Patent Box regime provides for a tax relief for a five-year period from 2015 to The Patent Box benefit for the three-year period Q Results is Euro 141 million, of which Euro 139 million from direct and Euro 2 million from indirect use of copyrights, patents, trademarks, designs and know-how. November 5 th,

4 Q HIGHLIGHTS SHIPMENTS NET REVENUES (UNITS) ( M) Q3 '18 2,262 Q3 ' % +0.3% Q3 '17 2,046 Q3 ' ADJUSTED EBITDA (1) EARNINGS PER SHARE (1) ( M and margin %) ( ) Q3 ' % Q3 ' % % Q3 ' % Q3 ' Adjusted EPS (1) Adjustments INDUSTRIAL FREE CASH FLOW (1) NET INDUSTRIAL DEBT (1) ( M) ( M) Q3 ' Sept. 30, 2018 (372) (30) (342) -32.0% -21.4% Q3 ' Dec. 31, 2017 (473) Net Industrial Debt (1) excluding buyback Buyback Note: (1) Reconciliations to non-gaap financial measures are provided in the Appendix 4

5 Q SHIPMENTS BY REGION (3) Americas +4.6% (34% vs. 36% PY) EMEA +11.3% (45% vs. 44% PY) Total shipments increased by 216 units (+10.6% vs. PY) supported by a 7.9% increase in V12 models and an 11.4% increase in V8 models: The 488 family in line with prior year with first few deliveries of the 488 Pista Strong deliveries for the 812 Superfast The newly launched Ferrari Portofino is ramping up China, Hong Kong and Taiwan, on a combined basis +6.6% (7% vs. 7% PY) Rest of APAC +27.5% (14% vs. 13% PY) LaFerrari Aperta is finishing its limited series run ALL REGIONS POSITIVELY CONTRIBUTING Q Results Note: (3) Refer to notes to the presentation in the Appendix November 5 th,

6 NET REVENUES BRIDGE Q %, + 2 million at current currency +2.2%, + 18 million at constant currency (8) ( M) +3.8% -19.9% +6.5% +21.0% (18) (16) Cars and spare parts: higher volumes led by the ramp up of the Ferrari Portofino as well as the 812 Superfast together with pricing and deliveries of the strictly limited edition Ferrari J50. Negative mix due to higher V8 models as well as lower sales of LaFerrari Aperta, that is finishing its limited series run Engines: decrease in sales to Maserati due to lower engine volumes Q Cars and spare (4) parts Engines (5) Sponsorship, commercial (6) and brand Other Q at constant currency Currency Cars and spare parts Engines Sponsorship, commercial and brand Other (7) (8) Q at current currency Sponsorship, commercial and brand: increased revenues from higher 2017 championship ranking compared to 2016 as well as stronger revenues from sponsorship, partially offset by brand related activities Note: (4) (5) (6) (7) Refer to notes to the presentation in the Appendix Q Results (8) The constant currency presentation eliminates the effects of foreign currency transaction and translation impacts and foreign currency hedging. November 5 th,

7 ADJ. EBIT BRIDGE Q (1) ( M) (12) Margin Margin 24.2% 24.2% Adj. EBIT Q Vol. Mix / Price Ind. Costs / R&D SG&A Other Adj. EBIT Q at constant (8) currency Adj. EBITDA Adj. EBITDA Adj. EBITDA (8) at constant curr. at current curr % 33.2% (19) Currency Adj. EBIT Q at current currency Volume increase thanks to the ramp up of the Ferrari Portofino as well as the 812 Superfast Mix / price negatively impacted by strong performance from V8 models and lower sales of LaFerrari Aperta, that is finishing its limited series run. This was partially offset by pricing and deliveries of the strictly limited edition Ferrari J50. Industrial costs / R&D slightly decreased mainly due to lower spending in F1 activities SG&A lower than prior year mainly due to lower costs related to the 70 th anniversary celebrated in 2017 Currency (8) negatively impacted mainly by USD depreciation vs. Euro Note: (1) Reconciliations to non-gaap financial measures are provided in the Appendix. (8) The constant currency presentation eliminates the effects of foreign currency transaction and translation impacts and foreign currency hedging 7

8 NET INDUSTRIAL DEBT BRIDGE (1) JUN 30, 2018 SEPT 30, 2018 ( M) Industrial FCF 100m 278 (442) (17) (0) (0) (342) (30) (372) (3) (3) (155) June 30, 2018 Net Industrial Debt excl. Buyback Adj. EBITDA Net working capital Tax paid Capex Other Dividends paid Currency and other September 30, 2018 Net Industrial Debt excl. buyback Buyback September 30, 2018 Net Industrial Debt Industrial free cash flow (1) driven by strong adjusted EBITDA (1) partially offset by solid capex to support broadening and hybridization of our product range Q industrial free cash flow (1) will benefit from the Patent Box Note: (1) Reconciliations to non-gaap financial measures are provided in the Appendix 8

9 CONFIRMING 2018 GUIDANCE As announced at the Capital Markets Day on September 18, 2018 SHIPMENTS (9) NET REVENUES ADJ. EBITDA NET INDUSTRIAL DEBT (10) CAPITAL EXPENDITURES > 9,000 > 3.4 billion 1.1 billion < 350 million ~ 650 million Note: (9) Including hypercars (10) Including dividends already distributed to the holders of common shares and excluding shares buyback. 9

10 F1: WORKING DILIGENTLY FOR THE 2018 SEASON 1 st place at the Australia, Bahrain, Canada, Great Britain, Belgium and United States GPs 22 podiums so far S. Vettel currently 2 nd in Driver s Championship with 294 points Driver s Championship Constructor s Championship 1. Lewis Hamilton - Mercedes Sebastian Vettel - Ferrari Kimi Räikkönen - Ferrari Valtteri Bottas - Mercedes Max Verstappen - Red Bull Mercedes Ferrari Red Bull Racing Tag Heuer Renault Haas Ferrari 84 10

11 Q CLIENT RELATIONS ACTIVITIES 488 PISTA SPIDER WORLD PREMIERE August Casa Ferrari, Pebble Beach ICONA FERRARI WORLD PREMIERE September Italy, Maranello Ferrari Monza SP1 and SP2 unveiling CAVALCADE CLASSICHE June Italy, Sardinia 11

12 Q ATTIVITA SPORTIVE GT COMPETIZIONI GT WEC: 6h Silverstone 1 st - LM GTE Class PWC: wins GT SprintX Title ELMS: 4h Silverstone 1 st - LMGTE Class Le Mans Cup: wins R5, R6 - GT3 class International GT Open: wins R5, R6 - PRO VdeV Endurance: wins GTV1 Title FERRARI CHALLENGE Average 488 Ch. entries per round UPDATED ROUND 6 EUROPE 45 NORTH AMERICA 50 ( Ch.) ASIA PACIFIC 33 XX PROGRAMS / F1 CLIENTI Average entries per round UPDATED ROUND 9 Paul Ricard (FRA) XX: 18 F1: 8 The On-track debut in FGC area of the FXX-K EVO CONTINUOUSLY ENGAGING WITH OUR CUSTOMERS 12

13 APPENDIX

14 NOTES TO THE PRESENTATION 1. Reconciliations to non-gaap financial measures are provided in the Appendix 2. The Italian Patent Box regime provides for a tax relief for a five-year period from 2015 to The Patent Box benefit for the three-year period is Euro 141 million, of which Euro 139 million from direct and Euro 2 million from indirect use of copyrights, patents, trademarks, designs and know-how 3. 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, South Korea, Thailand and Malaysia 6. 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 7. Primarily includes interest income generated by our financial services activities and net revenues from the management of the Mugello racetrack 8. The constant currency presentation eliminates the effects of foreign currency transaction and translation impacts and foreign currency hedging 9. Including hypercars 10. Including dividends already distributed to the holders of common shares and excluding shares buyback 4. Includes the net revenues generated from shipments of our cars, including any personalization revenue generated on these cars and sales of spare parts 5. 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 14

15 STRONG TRACK-RECORD IN NEW MODELS INTRODUCTION Range model introduced or announced Model / Year of delivery SPORT RANGE F430 F430 Spider 599 GTB Fiorano 458 Italia 458 Spider F12berlinetta 488 GTB 488 Spider 812 Superfast GRAN TURISMO RANGE 612 Scaglietti California FF California 30 California T GTC4Lusso GTC4Lusso T Portofino Q Results Special series and one-offs not included November 5 th,

16 STRONG TRACK-RECORD IN NEW MODELS INTRODUCTION Special and Limited edition introduced or announced Model / Year of delivery SPECIAL SERIES Superamerica F430 Scuderia Scuderia Spider 16M 599 GTO SA APERTA 458 Speciale 458 Speciale A F12tdf 488 Pista 488 Pista Spider ICONA Ferrari Monza SP1 Ferrari Monza SP2 Model / Year of delivery HYPERCAR LaFerrari LaFerrari Aperta TRACK CARS FXX K (11) FXX-K EVO (11) FUORISERIE F60 America (11) J50 (11) Note: (11) Models not included in the total shipments figure provided 16

17 2, % 2, ,005 GROUP SHIPMENTS (3) 6, % 6, ,078 2,189 2,938 3,181 8,398 >9,000 >1,300 1,233 > >3,000 2,811 3,737 >4,000 Q Q M M 2018 FY 2017 FY 2018E EMEA Americas China, Hong Kong and Taiwan, on a combined basis Rest of APAC Note: (3) Refer to notes to the presentation in the Appendix. Graphs not to scale. Shipments including hypercars LaFerrari and LaFerrari Aperta. 17

18 KEY PERFORMANCE METRICS Q3 '18 Q3 '17 M, unless otherwise stated 9M '18 9M '17 2,262 2,046 Worldwide shipments (units) 6,853 6, Net revenues 2,575 2, EBITDA (1) Adjustments (1) Adjusted EBITDA (1) Amortization and depreciation EBIT Adjusted EBIT (1) Net financial expenses Profit before taxes (90) 53 Income tax expense / (benefit) n.m. 27.6% Effective tax rate 3.2% 28.0% Net profit Adjusted net profit (1) Basic EPS ( ) Diluted EPS (1) ( ) Adjusted Basic EPS (1) ( ) Adjusted Diluted EPS (1) ( ) 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 5 th,

19 DEBT AND LIQUIDITY POSITION Cash Maturities Gross Debt Maturity Profile ( M) Net Industrial Debt ( M) Bond US Securitizations Other Financial Liabilities Cash and Marketable Securities ( M) Sept. 30 Jun. 30 Mar. 31 Adj. ( M) FY 2017 FY 2016 FY 2015 (12) FY 2015 Euro US Dollar Chinese Yuan Japanese Yen Other Currencies Total ( equivalent) Net Industrial Debt ( M) At Sept. 30 At Jun. 30 At Mar. 31 At Dec. 31 ( M) Total Debt (1,887) (1,853) (1,822) (1,806) (1,848) (2,260) Cash & Cash Equivalents Deposits in FCA Cash Management Pools (Net Debt)/Net Cash (1,134) (1,203) (1,079) (1,158) (1,390) (1,938) Funded Self-Liquidating Financial ,141 Receivables Portfolio (Net Industrial Debt)/Net Industrial Cash (372) (472) (413) (473) (653) (797) Undrawn Committed Credit Lines Total Available Liquidity 1,253 1,150 1,243 1, (1,134) September 30, 2018 Net Debt 762 o/w 81% securitized (13) Funded Self-liquidating Financial Receivables Portfolio (372) September 30, 2018 Net Industrial Debt Note: (12) After settlement of deposits on FCA Group cash management pools and financial liabilities with FCA. (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. 19

20 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 Reconciliations are only provided to the most directly comparable IFRS financial statement line item for Adjusted EBITDA, Adjusted EBIT and Adjusted EPS diluted for historical periods, as the income or expense excluded from these non-gaap financial measures in accordance with our policy are, by definition, not predictable and uncertain Total Net Revenues, EBITDA, adj. EBITDA, EBIT and adj. EBIT at constant currency eliminate the effects of foreign currency transaction and translation impacts and foreign currency hedging. 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 net of tax, which are significant in nature, but expected to occur infrequently Adjusted earnings per share diluted represents earnings per share as adjusted for income and costs net of tax, 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. 20

21 RECONCILIATIONS OF non-gaap MEASURES: TOTAL NET REVENUES AT CONSTANT AND CURRENT CURRENCY (8) Q3 '18 at current currency Q3 '18 at constant currency M 9M '18 at current currency 9M '18 at constant currency Cars and spare parts 1,898 1, Engines Sponsorship, commercial and brand Other Total Net Revenues 2,575 2,673 Note: (8) The constant currency presentation eliminates the effects of foreign currency transaction and translation impacts and foreign currency hedging. Q Results Certain totals in the tables included in this document may not add due to rounding. November 5 th,

22 RECONCILIATIONS OF non-gaap MEASURES: EBIT AND ADJ. EBIT AT CONSTANT AND CURRENT CURRENCY (8) Q3 '18 M 9M ' EBIT Adjusted EBIT Currency EBIT at constant currency Adjusted EBIT at constant currency 719 Note: (8) The constant currency presentation eliminates the effects of foreign currency transaction and translation impacts and foreign currency hedging. Q Results Certain totals in the tables included in this document may not add due to rounding. November 5 th,

23 RECONCILIATIONS OF non-gaap MEASURES: EBITDA AND ADJ. EBITDA AT CONSTANT AND CURRENT CURRENCY (8) Q3 '18 M 9M ' EBITDA Adjusted EBITDA Currency EBITDA at constant currency Adjusted EBITDA at constant currency 929 Note: (8) The constant currency presentation eliminates the effects of foreign currency transaction and translation impacts and foreign currency hedging. Q Results Certain totals in the tables included in this document may not add due to rounding. November 5 th,

24 RECONCILIATIONS OF non-gaap MEASURES: ADJUSTED EBIT Q3 '18 Q3 '17 M 9M '18 9M ' EBIT Release of charges related to Takata airbag inflator recalls (1) Adjusted EBIT Q Results Certain totals in the tables included in this document may not add due to rounding. November 5 th,

25 RECONCILIATIONS OF non-gaap MEASURES: EBITDA Q3 '18 Q3 '17 M 9M '18 9M ' Net profit (90) 53 Income tax expense / (benefit) Net financial expenses Amortization and depreciation EBITDA Q Results Certain totals in the tables included in this document may not add due to rounding. November 5 th,

26 RECONCILIATIONS OF non-gaap MEASURES: ADJUSTED EBITDA Q3 '18 Q3 '17 M 9M '18 9M ' EBITDA Release of charges related to Takata airbag inflator recalls (1) Adjusted EBITDA Q Results Certain totals in the tables included in this document may not add due to rounding. November 5 th,

27 RECONCILIATIONS OF non-gaap MEASURES: ADJUSTED NET PROFIT Q3 '18 Q3 '17 M 9M '18 9M ' Net profit (141) - Release of charges related to Takata airbag inflator recalls (net of tax effect) Patent Box benefit for the period (1) - (141) Adjusted net profit Certain totals in the tables included in this document may not add due to rounding. 27

28 BASIC AND DILUTED EPS Q3 '18 Q3 '17 M (unless otherwise stated) 9M '18 9M ' , ,954 Net profit attributable to owners of the Company Weighted average number of common shares (thousand) , , Basic EPS ( ) , ,759 Weighted average number of common shares for diluted earnings per common share (thousand) 189, , Diluted EPS ( ) Certain totals in the tables included in this document may not add due to rounding. 28

29 RECONCILIATIONS OF non-gaap MEASURES: ADJUSTED EPS Q3 '18 Q3 '17 per common share 9M '18 9M ' Basic EPS (0.74) - Release of charges related to Takata airbag inflator recalls (net of tax effect) Patent Box benefit for the period (0.01) - (0.74) Adjusted EPS Diluted EPS (0.74) - Release of charges related to Takata airbag inflator recalls (net of tax effect) Patent Box benefit for the period (0.01) - (0.74) Adjusted diluted EPS Certain totals in the tables included in this document may not add due to rounding. 29

30 RECONCILIATIONS OF non-gaap MEASURES: FREE CASH FLOW AND FREE CASH FLOW FROM INDUSTRIAL ACTIVITIES Q3 '18 Q3 '17 M 9M '18 9M ' Cash flow from operating activities (155) (93) Cash flows used in investing activities (14) (403) (247) Free Cash Flow Change in the self-liquidating financial receivables portfolio Free Cash Flow from Industrial Activities (15) 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 (15) Free cash flow from industrial activities for the three and nine months ended September 30, 2018 includes Euro 1 million of quick refund to shareholders due to eligibility for withholding exemption. Certain totals in the tables included in this document may not add due to rounding. 30

31 RECONCILIATIONS OF non-gaap MEASURES: NET INDUSTRIAL DEBT M September 30, 2018 June 30, 2018 March 31, 2018 December 31, 2017 Net Industrial Debt (372) (472) (413) (473) Funded portion of the self-liquidating financial receivables portfolio Net Debt (1,134) (1,203) (1,079) (1,158) Cash and cash equivalents Total Debt (1,887) (1,853) (1,822) (1,806) Q Results Certain totals in the tables included in this document may not add due to rounding. November 5 th,