Ferrari NV

MIL:RACE

Earnings Call Analysis

Ferrari's Q2 shows strong results and increased guidance

Ferrari reported strong Q2 results, with a 16% increase in revenues reaching €1.7 billion and an adjusted EBITDA margin of 39%. Net profit rose to €413 million. The company also upgraded its 2024 guidance due to strong personalizations and better visibility for the rest of the year. Deliveries increased slightly, driven by models like the Purosangue and 296 GTS, despite a decline in shipments to China. The company emphasized ongoing investments in sustainable innovation, including the launch of the new e-building, which will support the production of hybrid and electric models starting in 2025.

Outstanding Q2 Financial Performance

In the second quarter of 2024, Ferrari once again showcased its prowess with stellar financial results. Revenues soared to EUR 1.7 billion, marking a 16% increase from last year. This surge was primarily driven by a robust product mix and the growing enthusiasm for personalized vehicles. Notably, the company's profitability also climbed, with an adjusted EBITDA reaching around EUR 670 million and an impressive margin of 39%. Consequently, Ferrari's net profit for the quarter stood at EUR 413 million. This strong financial performance led the company to revise its 2024 guidance upward, expecting sustained personalization demand and increased visibility for the remainder of the year.

Robust Order Book and Product Demand

Ferrari's order book continues to be solid, buoyed by the successful introduction of new models like the [indiscernible] Spider. These new models have seamlessly guided the order intake. The company remarked on the enthusiastic reception of these models, which are driving the order book well into 2026. This sustained demand showcases the loyalty of long-term customers and the brand's expanding appeal to newcomers. Ferrari's strategic allocation of products across different regions enhances its brand strength and exclusivity, exemplified by the world premiere events in Miami and subsequent regional launches.

Innovation and Sustainability Initiatives

In June, Ferrari dedicated a full week to sustainable innovation, involving key stakeholders and launching the much-anticipated e-building. This facility focuses on energy, evolution, and the environment, housing the development and production of internal combustion engines (IC), hybrids, and full electric models. This approach aligns with Ferrari's commitment to technological neutrality, ensuring that clients have a range of powertrain options. The e-building also brings Ferrari's R&D closer to manufacturing, shortening development phases and maintaining in-house expertise in critical technologies like high-voltage batteries and electric motors.

Adapting to Market Changes

Despite only a 3% increase in shipments, Ferrari's revenues grew by 16%, thanks to an enhanced product mix and increased personalization. Shipments rose in regions like EMEA, Americas, and the rest of APAC, although there was a decline in Mainland China, Hong Kong, and Taiwan by about 60 units. The launch of the Purosangue, Roma Spider, and 296 GTS, along with the limited-edition SF90 XX Stradale, bolstered deliveries. Personalization, which now accounts for nearly 20% of total revenues from cars and spare parts, played a significant role in Ferrari's performance.

Guidance and Future Prospects

Looking ahead, Ferrari has increased its guidance for 2024, anticipating higher R&D spending on racing, innovation activities, and marketing. The company expects to maintain the EBITDA margin target while upgrading the EBIT margin to reflect better operating leverage. Additionally, the tax rate is projected to be around 19.5%, benefiting from the temporary overlap of two different patent box regimes. Ferrari's strong profitability should also result in increased industrial free cash flow, even with a higher pace of capital expenditures. Investment in new technologies and production infrastructures will continue to feature prominently.

Brand and Lifestyle Investments

Ferrari's brand momentum remains strong, reinforced by numerous exclusive events that combine sports cars, lifestyle, and racing. For instance, during the iconic Le Mans race, Ferrari hosted a pop-up store, which received positive client feedback and enhanced sales. The strategic activation of Ferrari's lifestyle collections at such prestigious events underscores the company's ability to offer a cohesive and engaging brand narrative. The brand's inclusivity, paired with its engineering excellence, continues to attract and retain a dedicated global customer base.

Challenges and Strategic Adjustments

Despite navigating various market challenges, Ferrari has exhibited resilience. The company acknowledged slower delivery growth in the third quarter, designed intentionally to facilitate the transition to a new ERP system. Increased R&D, operational expenses, and higher depreciation and amortization costs linked to new model production are expected. Nevertheless, Ferrari's fundamental business strengths and flawless execution provide a robust foundation for continued success. Investors should remain confident in the company's strategic direction and ability to sustain positive momentum.

Earnings Call Transcript 2024-Q2

[Operator]

Good day and thank you for standing by. Welcome to the Ferrari 2024 Q2 Results Conference Call. At this time, all participants are in a listen-only mode. [Operator Instructions] Please be advised that today's conference is being recorded. I would now like to hand the conference over to your speaker today, Aldo Benetti, Investor Relations Manager. Please go ahead.

[Aldo Benetti, executive]

Thank you, Evan, and welcome to everyone who is joining us. Today, we plan to cover the group's operating results of the second quarter of 2024, and the duration of the call is expected to be around 60 minutes. Today's call will be hosted by the group CEO, Mr. Benedetto Vigna; and the group's CFO, Mr. Antonio Piccon? All relevant materials are available in the Investors section of the Ferrari corporate website. And at the end of the presentation, we will be available to answer your questions.

Before we begin, let me remind you that any forward-looking statements we might make during today's call are subject to the risks and uncertainties mentioned in the safe harbor statement included on Page 2 of today's presentation, and the call will be governed by this language. With that said, I'd like to turn the call over to Benedetto.

[Benedetto Vigna, executive]

[indiscernible] Aldo. Thank you, everyone, for joining us today? I'd like to open today's call with heartfelt thank you. Firstly, to our clients for their continued trust in our brand. Secondly, to all our partners, suppliers, indiscernible] sponsors with whom we have continued to strengthen our relationship. And last but not least, to all our Ferrari colleagues for their outstanding work and passion supported by a strong sense of belonging. Many important milestones and positive achievement took place in the second quarter, among which our victory is 24-hour of Le Mans for the second year in a row.

During today's call, I will touch upon the following 4 key achievements. One, very strong Q2 financial results and the continued smooth execution of the year. Two, a solid order book, which has evolved as expected, with the new [indiscernible] Spider [indiscernible] guiding the order intake. Three, a full week of activities in June dedicated to sustainable innovation. This involved all our stakeholders and culminated in the inauguration of the e-building, exactly 3 years from its announcement at the Capital Market Day. We really made it. Fourth, due to the progress in raising our lifestyle, we have enhanced coalition across our company's resource.

So let's start with the financial results of the second quarter, which demonstrates again strong execution and continued growth. First, revenues. They were at EUR 1.7 billion, up 16% versus the previous year, sustained by the continued strength of the product mix and the growing demand for personalization. Second, profitability, which improved with adjusted EBITDA at about EUR 670 million and a remarkable 39% margin. And third, the net profit, which reached EUR 413 million. On the back of stronger personalizations, and increased visibility for the remaining part of the year, we upgraded our 2024 guidance, and Antonio will show you the details later in the call.

The solidity of this quarter results was accompanied by continued strong brand momentum, which brings me to my second key point for today. The enthusiastic reception of our latest new sports cars, the [indiscernible] and [indiscernible] Spider, drove the order collection in the quarter, adding to an already solid order book on current models, which covers well into 2026.

Such visibility relies on the loyalty of our existing customers as all over the world as well as the brand appeal to the new ones. On that, [indiscernible] on current macro developments, market by market, we continue to allocate our products strategically across the different regions to enhance our brand strength and exclusivity.

After the world premier in Miami, we offset several regional launches of our newly [indiscernible] boards, naturally aspirated [indiscernible] sports cars in all major markets. and they will continue in the second half of the year. I have said that the sum of these beautiful events and I met clients from different European countries. They all praise the [indiscernible] perfect synthesis between the past and the future. The front of the 12Cilindri that recalls the 1968 [indiscernible] with the old styling interpreted in a very futuristic way.

And now we go to the third point of today's call. Innovation is sustainability, and sustainability is innovation. This is our profound belief. Sustainable innovation has been the focus of a series of events that we hosted in [indiscernible] this June, involving all Ferrari stakeholders. We have a workshop with around 30 of our Ferrari partners aimed at sharing experiences and practices to reduce environmental impact. A full day was devoted to suppliers.

They play a key role in our company's drive for innovation. This annual event brought together about 500 people from a few hundred suppliers from all over the world for a discussion on their contribution to sustainable innovation, which is increasingly central to our supply chain. And then a weekend was dedicated to Ferrari's employees, their families and friends, a record presence of more than 30,000 people visiting our factory, such a great emotion. I spent there the full Saturday and it was for me the first time, and I will never forget this beautiful unique experience.

And during that intense week, we also inaugurated the new e-building, where e stands for energy, evolution and environment. And based on the concept of technological neutrality and flexibility, this new facility will house the development and production of IC, hybrid and full electric models. Here, let me remark once again our belief. We believe that there is no single solution to future automotive powertrains. And this is particularly true during the current technology transition. Technological neutrality is a key principle for us and consistent with our strategy, and we continue to invest in the 3 powertrains.

Internal combustion engine, hybrid and full electric to provide our clients with maximum freedom of choice. In e-building, we will also engineer and handcraft the strategic electrical components that are highly relevant to differentiating Ferrari's technology and performance. High-voltage batteries, electric motors and axles. Indeed, the full electric Ferrari requires new technologies, new components and processes and e-building will enable us to keep our critical know-how in-house and maintain our competitive advantage in the years to come.

The advantages of new e-building do not [indiscernible]. It will also enable us to [indiscernible] people wise, the production of limited edition cars such as ICONA from the development of new models, and this will allow us to place the research and development team closer to manufacturing, shortening the product development phase in time to market. And here, I would like to be very clear on one point, we did not realize the building with the aim of growing our volumes. Our ethos remains the same: quality, [indiscernible] revenues over quantity.

On June 21, we completed the [indiscernible] e-building and installed equipments. Now we are focused on testing, the processes and the bagging the lines to start production of hybrid and ICE models from the beginning of 2025. For this achievement, a special thanks goes to all the colleagues, who have been able to maintain the e-building schedule despite all the difficulties that we experienced during these times. It has been not easy, but they made it happen by acting nimbly with focus and determination.

During the quarter, we made further progresses both in racing and lifestyle, creating stronger [indiscernible] across our company's [indiscernible].

Let's start with the racing world. In our second season, in the top class of the World Endurance Championship, we achieved an extraordinary success with our 499P at the 24 Hours of Le Mans. And this is second Le Mans' victory for our [indiscernible]. This outstanding result deserves huge praise and is a testament -- is a testament to the exceptional teamwork of all colleagues and their perseverance. The same spirit and will [indiscernible] is vivid amongst our Formula 1 team. Scuderia Ferrari HP approached the 2024 formula season with the aim of always fighting at the front. We entered the summer break with encouraging signs. We scored 2 wins versus 0 last year and 50% more points per race compared to last year.

The team remains focused and united and is pushing hard to continue to improve the performance of the [indiscernible]. Our recent racing and sports car event have also been the perfect stage to gather our most loyal client and showcase our lifestyle dimension. And this brings me on to my last point for today. We have recently been much more deliberate about including our lifestyle collections at our exclusive events sharing our latest creations with our community. The successful activation in [indiscernible] in Las Vegas last year were a first step. This year, at the beginning of May, we took a further step forward. We organized a series of engaging and unique experiences in Miami for our community.

This encapsulated the elegance of our sports cars, the lure of Ferrari lifestyle and the excitement of racing. This was more than just hosting events. It's created a coherent, coordinated and inclusive narrative across each of our 3 [indiscernible]. A similar approach was also taken during the most iconic endurance race at Le Mans with the creation of a pop-up store at [indiscernible] Ferrari, which received a very positive feedback from clients, resulting in improved sales and encouraging signs for the future. We are aware that Ferrari is an incredible powerful and unique brand, being extremely [indiscernible] side, when you think of our sports cars, at the same time being very inclusive.

If you think of our racing DNA and the millions of [indiscernible] and brand enthusiasts that we inspire all over the world, amongst them during the Formula 1 Grand Prix [indiscernible] Ferrari enthusiast had a once in a lifetime opportunity to spend the night inside our iconic museum in Maranello, which was the setting for a unique [indiscernible] and experienced not usually available to the public. We were able to create this activation by leveraging our existing assets, our museums in [indiscernible] and here, for the first time, we passed [indiscernible] of 100,000 visitors in May alone. The [indiscernible] restruct and our historic [indiscernible].

To conclude, the second quarter of 2024 has been full of significant milestones, and I believe this achievement marked a continuation of our journey as we are driven on by our will to progress and the drive for excellence in everything we do. Always, always keeping 4 wheels on the ground. And on this note, I hand over to Antonio to review the Q2 2024 financial results. Please, Antonio.

[Antonio Piccon, executive]

Thank you, Benedetto, and good morning or afternoon to everyone joining us today. As far as on Page 6, where we present the highlights of the second quarter. Continuing the trend from the first quarter, the growth rate of revenues and profitability outpaced that of our deliveries, mainly thanks to the enriched product mix and increased personalization. Therefore, while shipments grew by less than 3%, revenues were up 16%, adjusted EBIT up 17% with a 29.9% margin. Adjusted EBITDA increased 14% with a 39.1% margin and such economic results led to a remarkable industrial free cash flow generation despite higher capital expenditure and tax payments.

Moving to Page 7. We review our shipments for the second quarter, which increased by 92 units. As already mentioned by Benedetto, we leveraged our order book visibility and production flexibility to design our product allocation across the different regions consistently with the developments observed in each respective market. As a result, deliveries increased in EMEA, Americas and rest of APAC, while decreased by roughly 60 units in Mainland China, Hong Kong and Taiwan. The increase in deliveries was driven by the Purosangue, the Roma Spider and the 296 GTS.

Additionally, we commenced the first deliveries of the SF90 XX Stradale, the special series hybrid with a limited production run of 799 units. The allocation of Daytona SP3 grew in the quarter compared to the prior year, but were lower than in Q1, in line with our plans. The shipments of the Roma and the special Series 812 Competizione decreased approaching the end of their life cycle, while the SF90 Stradale and 812 GTS phased out. In the quarter, the hybrid share reached 48%, in line with product cadence and mainly driven by the 296 GTS.

On Page 8, you can see the net revenue bridge, which shows a 19% growth versus prior year at constant currency. The increase in cars and spare parts was the most relevant contributor driven by the retail product mix and country mix as well as higher personalization. In the quarter, personalization further strengthened at an almost 20% of total revenues from cars and spare parts, mainly supported by the Purosangue and Daytona SP3.

Sponsorship, commercial and brand increased, thanks to new sponsorships related to our rating activities and improvements in lifestyle. The increase in sponsorships reflect the latest sponsors additions, including HP as the new type of sponsor of Scuderia Ferrari in F1. Other revenues were almost flat with improved contribution from financial service activities substantially offset by the Maserati contract expiration. Currency, net of hedges in place has a negative net impact mainly due to the adverse dynamics of the U.S. dollar, the Japanese yen and the Chinese yuan versus the euro.

Moving to Page 9. The change in adjusted EBIT is explained by the following variances. Volume positive and reflecting the unit increase versus the prior year. Mix and price strongly positive, thanks to the robust product mix sustained by the Daytona SP3 and the few 499 Modificata sales, the increased contribution from personalization and a positive country mix, mainly supported by the increased weight of the Americas. Industrial and energy expenses were almost flat in the quarter. SG&A increased and reflected marketing and brand investments and the ongoing development of our digital infrastructure and organization. The events we had in Miami and Le Mans exemplify our brand investments, perfectly integrating the sports cars, lifestyle and racing [indiscernible].

[indiscernible] was almost flat in the quarter. The increased contribution of our new sponsorship and a new release of current environmental provisions worth approximately EUR 10 million were mostly offset by higher costs for rating also due to better Formula 1 in-season ranking.

Lastly, the total net impact of currency was negative for EUR 35 million. And as a result, the EBITDA margin stood at 39.1%. As a reminder, the exceptional EBITDA margin of 40% in Q2 2023 was supported by certain timing and other positive effects, which in part took place also this quarter. The EBIT margin reached 29.9% and benefited from flattish depreciation and amortization compared to the prior year as a result of the production cadence of current models.

Turning to Page 10. In the second quarter, our industrial free cash flow generation was EUR 121 million, reflecting the increase in profitability, partially offset by capital expenditure that are higher than last year and in line with the pace of development of our products as well as of the new infrastructure in Maranello. As previously mentioned, capital expenditure this year are progressing more linearly compared to our user cadence due to advanced development of the product pipeline and the ongoing spending for the new [indiscernible] shop.

Tax payments and an increase in net working capital provisions and other primarily driven by higher inventory, which reflects both our production plans and innovative product mix. In the end of June, the company was in a net industrial debt position for EUR 441 million since the dividend payment and the share repurchases occurred in the quarter more than offset the positive industrial free cash flow.

Moving to Page 11. We revised upward the 2024 guidance mainly to reflect the improved visibility on stronger personalization following the very solid results of the first 6 months. We are also projecting higher R&D expenses for racing and other innovation activities as well as for marketing and brand initiatives for the rest of the year. This leads us to confirm the EBITDA margin target for the year, while upgrading the EBIT margin to reflect the operating leverage on G&A.

The improved EPS also reflects the new estimate on the tax rate for 2024, now in the region of 19.5%, which benefits from the temporary coexistence of the 2 different patent box regimes. The strong profitability also turns into higher industrial free cash flow, notwithstanding the increased pace of our capital expenditure above the initial EUR 950 million target, also reflecting the updated time line for the new [indiscernible] shop, which has been accelerated compared to our plans as per the last Capital Market Day.

To sum up and focus on the second half of the year, we therefore expect a positive product mix, even though to a lesser extent compared to the first half, given the lower Daytona deliveries in line with our plans. The mentioned increase in R&D, OpEx and SG&A and higher D&A in line with the start of production of new models and the digital infrastructure.

With respect to the quarterly pace, we confirm the already flagged softer Q3 intentionally designed in terms of volumes, model and country mix allocation to the whole company in its transition to the new ERP, the enterprise resource planning software for [indiscernible] collection, production and sales management that [indiscernible] at the end of August. To conclude the financial results that we present today underscore the solid fundamentals of our business and a flawless execution. Such results and the visibility that we enjoy give us renewed confidence to sustain this positive momentum and keep on delivering on our commitment. I thank you for your attention, and I'll now turn the call over to Aldo.

[Aldo Benetti, executive]

Thank you, Antonio. Evan, we are now ready to start the Q&A session.

[Operator]

[Operator Instructions] Our first question comes from the line of John Murphy of BofAS.

[John Murphy, analyst]

Good afternoon, everybody. I do want to ask 2 maybe kind of relatively simple but important questions. Benedetto, when you talk about the order book being full through 2026, that's sort of an indication that you know what your units are going to be or planning on what your units are going to be through the next 2.5 years. I'm just curious, as you know that and you plan for that, is there just a much greater focus on price and mix with very slow growth in units? Or could we see maybe a little bit of an acceleration in unit growth and a slightly less emphasis on price and mix. I mean how do you think about balancing those and really the volume growth for the next 2.5 years? .

[Benedetto Vigna, executive]

And the second question.

[John Murphy, analyst]

And the second question is the margins are bumping up against sort of the high end of the range of the 2026 outlook. Is there a way to maybe potentially think about recasting margin potential in the company, really in light of the first question.

[Benedetto Vigna, executive]

Okay. So I'll take the first one. The second, I will -- Antonio will have, John, thanks for your question. Coming to the first one is, we'll give -- let's say, what we see is an advantage in terms of mix and price and the slower growth, okay? Coming back to your first question. The second.

[Antonio Piccon, executive]

John, if I got your question right, in terms of the guidance on margin. This is very much driven by the development of our mix going forward. And obviously, the incidence of expenses. So -- if you look at Q2, I think the rationale for that is clear. But if we look forward to the second half of the year, I think there is additional costs that are partly seasonal that are denting into the continuation of the similar level of profitability. As to 2025 and 2026, 2026 is out there in terms of guidance and remains there and '26 we will speak later on beginning of next year.

[Operator]

[Operator Instructions] Our next question comes from the line of Michael Binetti of Evercore ISI.

[Michael Binetti, analyst]

Congratulations on a great execution quarter. A couple -- just 2 questions for me. One on personalization. Can you help us understand the increase in personalization. I think you said almost 20%. Maybe break down what's helping move that higher? Any headwinds. And I'm curious how much the mix of cars is influencing that. And if the early shipments of the SF90 XX special models are suggesting that personalization will be in line with averages or above as we move past 2Q. And then the second question is, as we think ahead to the EV next year, it's interesting to look back and see how the company has rolled out new technologies in the past. The LaFerrari introduced the Kurs hybrid system and you guys chose to bring that out at a very high price, EUR 1 million plus supercar price point.

Conversely, the [indiscernible], you brought that out as a premium priced road car with a higher unit count than the strictly limited LaFerrari. As you think about those 2 examples, what are the most important elements of the strategy that you think about in launching the EV.

[Benedetto Vigna, executive]

I think [indiscernible] the first one. The personalization, Michael, thanks for your question and the complement to go to all the team. The story of the personalization, we have this question several times. What we see and we are focusing in supporting the demand of increased personalization from our clients. I would like you all to remember a couple of things. One, the personalization level is -- does not depend too much on the model. It's about 20%.

Clearly, in absolute term, when you sell something that is more expensive in absolute term is biggest, but in any case, it's around 20%. And the second thing that I told I would like to share with you is that the dimension of the personalization that is -- that our client like a lot is the carbon finish. We keep analyzing what is the take rate of the different options that we offer. And we see a clear dominance of everything that is carbon finished. And we have been looking at this both inside in the car and outside the car. So we are putting our supply -- we are strengthening support strengthening retailer supply chain in a way that we can accommodate the different client needs. So this is about the personalization. These are the 2 facts that are supported by data analysis of what we see in terms of behavior of our clients.

The second instead is about the EV strategy. Here, I would like to remind that it was May 2022 before the CMD when we had the several discussion in the company. it was clear at the time that it wouldn't make sense to push only one kind of propulsion. Technological neutrality is a key when you have, let's say, the market is not -- does not know where to go. So for us, making the EV is a way to show our clients that whatever is the technology we can harness in a unique way to deliver them unique driving trails. So one message that I said when I made an introduction is that we continue to believe in technology neutrality. We are acting in that direction and our plan our -- let's say, our plan of EV introduction is as it was. We unveiled a car in Q4 2025, and we believe we are able -- we will be able to deliver unique driving experience to our customers with any kind of cars that we are going to make in the e-building.

[Operator]

[Operator Instructions] Our next question comes from the line of George Galliers from Goldman Sachs.

[George Galliers-Pratt, analyst]

Obviously, it sounds like you are seeing very strong demand still for all of your products. And obviously, you have a very healthy order book. Obviously, just mindful of what we're hearing other luxury companies talk about, have you built up the order book of the 12Cilindri -- have you seen any areas where perhaps the market has not been as strong as you might have expected and potentially any areas where that's been more than compensated for by very high demand. Is there any sort of geographic development there that has caused you to sort of raise an eyebrow?

And then the second question I had was just with respect to the very strong price mix during the quarter. Can you give us any insight into how much of that was from the contribution from Daytona SP3 and the 499 and with respect to the 499, if you're able to provide any sort of insights around the volume in the quarter, the volumes we should expect over the remainder of the year? I think that would be very helpful.

[Benedetto Vigna, executive]

George. I'll take the first one. The second, Antonio will reply. So the first one, maybe the question is about the 12Cilindri order book, right? That's what you said, 12Cilindri. So I can tell you that the traction of this -- of both models is very strong across all the countries. There is only 1 [indiscernible], but we knew already by design. One country where the order book is not so strong like in other countries, because it's 12Cilindri because there is, let me say, additional tax burden that is China.

But remember that when we show you the -- when we shared with you the Capital Market -- during Capital Market Day, the plan for the 4 years, together with the technological neutrality, we said another important thing because of the product pipeline we were developing, we said that China would have been always lower than 10% [indiscernible] China. So I would say no surprise in this respect. I would say instead, one thing that the traction of the 12Cilindri has been stronger, I would say, even much stronger than the 2 predecessors in the same -- in the same category. I'm talking about the 812 GTS and the 812 Superfast. So very -- we are happy about the traction of this model with the different clients that are seen. And the second is for you, Antonio.

[Antonio Piccon, executive]

George. During the quarter, we shipped 74 Daytona. That's why I said less than in Q1 and [indiscernible] higher than last year. And going forward, you remember, we said that the decline over the course of the second half in order to have a sort of high average for the year, which is slightly above 60 per quarter. The 499P, sorry, we shipped 5 in the quarter. There is not to be expected an even pace of delivery going forward, but more or less, that would be the region, I mean, 4 to 5 depending on the quarter decline.

[Operator]

[Operator Instructions] Our next question comes from the line of Thomas Besson of Kepler Chevreaux.

[Thomas Besson, analyst]

And congratulations on the numbers. I'd like to discuss with you the possibility of seeing your averaging prices moving even higher or not in the second half? I was impressed by the step-up in Q2 versus Q1. With what you said, we should expect a substantially lower number of SP3, but a much higher level of Daytona and XX I guess. Could you help us assess whether the average selling price in the second half could be higher than the first half or not? And also mention the impact of the declining China share on that calculation? That's the first question.

And the second, you the SF [indiscernible] finished now. Could you talk about the expected evolution of the hybrid share in the coming quarters? It has reached a high level driven by now the [indiscernible]. What should we expect in the coming quarters? And when should we expect you to release a new hybrid car.

[Benedetto Vigna, executive]

I take the second, Antonio will take the first. Yes, maybe I would like to share with you one important point. Today, when we -- you see the number of the share of the cars, hybrid as I see, more or less, we are around 50:50. Well, I think that there is a -- continues to be a strong traction for our hybrid model. And just yesterday, I was with a few clients that we're extremely happy about the 296 GTB compared with the 458 that was thermal. And so what I want to say is that we expect the traction of the hybrid going forward in the same level as it has been so far. And we start to see also some positive comments about the initiative we launched at the beginning of this month -- sorry the past month in July, when we extend also the warranty to the high-voltage battery of the hybrid car. So we don't see any any, let's say, strange sign on hybrid. On the contrary, we see a strong positive interest and attention in driving trails that our clients are experiencing when they drive this hybrid car. So that's I think the second, and then Antonio.

[Antonio Piccon, executive]

The previous numbers. Anyway, the second in terms of ASP for the second half of the year, I would expect it to be not very different, maybe slightly lower compared to the first half. While with respect to the -- and this is mainly due to the fact that the Daytona is going down in terms of number of shipments, through, there will be some more S90 XX, this will be growing. We have delivered until now a few tens of this car we will be in the region of 100 or slightly more of this in the second half. But overall, the net impact should be the one that [indiscernible].

[Operator]

[Operator Instructions] Our next question comes from the line of Henning Cosman of Barclays. .

[Henning Cosman, analyst]

I have 1 question on personalization, please. I believe at Q1 stage, we talked about a level of slightly higher than 19%. And at the time, you said it was above average what you're expecting going forward. We're now talking, I believe, more like 20%, and you are not talking about above average anymore. So -- is it fair to say that at this point, the expectations for personalization have shifted up and you're now expecting more sustainably a level of 20%. And the second question, perhaps on residuals. I know we've been talking about residual normalization. If you could just share your latest observations and thoughts. I know you think that residual value should start to normalize to a greater degree than they have perhaps during the COVID and semiconductor period, do you think at all that could affect your ability going forward to price successor models at as large markup as you have currently done once your buyers start to consider perhaps a more normalized development in residual values. But also more broadly, any considerations you would share around residuals will be greatly appreciated. .

[Benedetto Vigna, executive]

Henning, so the first one, personalization I mean, forecasting the behavior of the client, you know very well, is not easy. What we can -- what the only thing, allow me to say, the best antidote or the best way to manage this is to become -- to be agile, to accommodate their needs to have some flexibility. That's the reason why we are so much proud about our e-building because of the flexibility that allows us. So for the rest of the year, we expect, in any case, something that is in the range of 19%. It can go up a little bit, 19.5%, but that 19% is what you can -- what you can consider also for the rest of the year. That's what we are planning for.

The second question is that it's a good occasion to clarify a couple of points. The first one, the residual value remains strong. There is -- there are some geographies, okay? Like I mentioned, for example, U.K., well, let's say, they are a little bit weaker. But I can tell you that we have been analyzing 20,000 transactions, 20,000 transactions that have been happening in the last years, and we have seen that there are the functional personalization that are keeping their value, then there are some personalization like the painting, some special painting, something that is not, let's say, may be not so appreciated by the second client that are a little bit impacted.

But I can tell you that, let's say, the trend remains strong and maybe this is a good occasion to clarify everyone. Sometimes you keep reading that the people are afraid about residual value of the hybrid cars. Well, we have been investigated. We have been working and listening to our clients. We have been working in the last 7, 8 months, and we announced this warranty program that starts in July this year for all our hybrid cars in a way that we gave the peace of mind to all the clients that have the hybrid. So basically, the battery, it's like many others, let me say, object in the car and is protected by warranty. So thanks for your question.

[Henning Cosman, analyst]

May I squeeze a follow-up question?

[Benedetto Vigna, executive]

Sure.

[Henning Cosman, analyst]

To Antonio, please, sorry, Antonio, you said some of the positive one-off effects in the bridge in the other bucket at the time of Q2 2023, I think it was when you were talking about EBITDA. You said some of these were also present this quarter. Could you be a little bit more concrete on that, please?

[Antonio Piccon, executive]

Absolutely. sorry, I thought you remember. Anyway, last year, in the second quarter, we had a release of current environmental provisions. And also, we adjusted our expectations for the ranking of the year to the second place. While this year, we had a similar release of environmental provisions and we maintain for the time being our assumption in terms of being first in Formula 1. .

[Operator]

[Operator Instructions] Our next question comes from the line of Stephen Reitman of Bernstein.

[Stephen Reitman, analyst]

Congratulations on your results. I had a question again on personalization. I think you've said in the past that Purosangue surprised you in the sense that demand was much stronger than you had anticipated, and you closed the order book then you open it again, and this stretches out very far. You said that I think in the first quarter, the personalization rate was very heavily influenced by collectors who were personally in a very high level. And maybe I had the impression you were thinking maybe this rate of personalization will not continue once these collectors have been satisfied. Maybe you could comment on what the personalization rate is looking like on Purosangue as we go through as we end in the second quarter and the rest of the year.

And secondly, again, congratulations, and I think it's a very good idea with the warrant -- extended warranty program for the hybrid components, addressing their concern. What is actually the feedback you've actually been getting from that already? It's obviously not many cars yet at the end of the warranty on the vehicle yet. But have you already seen some take-up of the plan?

[Benedetto Vigna, executive]

Thank you, Stephen, as I said, also the complement go to all the team here. So let's start with the personalization. You are right. In Q1, we see the collectors, let's say, pushing out the personalization. What I can tell you I don't know if it is a sign also for the future or not, we'll see. But we see also that the new clients are particularly keen in personalization. So the good point is that we're collecting a lot of data. We are analyzing them. While we can say with certainty that the carbon finish is definitely something together with the painting. It's a personalization that shows a clear trend, a clear appeal for the client. We start to see also that the new client in Q2 -- we start to see the new client at appreciating want to personalize more and more of the car.

But we don't feel confident yet to say that this is a trend like it is for collectors. We need to collect more data. That's reason why I told you before that we expect personalization to be always in the range of 19%. We'll see. We will update you as soon as we understand and we pick up a signal. The second instead we have been working around 7 months to set up this idea of high voltage battery warranty and as you can understand, I mean, this is online since 27 days. And we -- I can tell you that the feedback of the client some feedback of the client were very positive because they understand that in the car, there is something that is a limited life, and we Ferrari realize it, and we apply this warranty. So the first feedback are positive. We'll see what is the take rate in the quarters to come, also because the first car that are approaching the end of the 5 years, [indiscernible] 19 plus 5 is 24. So we'll keep you updated Stephen. The first feedback are very, very positive because the people understand that they can -- we understand and we care about the peace of mind of our clients.

[Stephen Reitman, analyst]

Can I just ask 1 more question, please, as well. And that is, obviously, there have been concerns about the general luxury market, but we saw last week, very strong results in -- from Hermes in the iconic leather and Saddlery business, which really defines the brand. What are you seeing -- what feedback you're getting from your dealers in terms of footfall, people visiting the showroom and the dues of interest, how would you say that compares to any period you prefer to compare it against?

[Benedetto Vigna, executive]

Look, we don't see any sign of weakness. We see -- there is no trend in at all in reduction of visit. I can tell you that after the 12Cilindri announcement in Miami, we had a lot of events all over Europe. I've been attending personally several of them because we organize them close to the retracking Fiorano, and they were full of clients. the client we were inviting were in the range of 100 per night. And we were offering also dinners. Most of the time, they were spending cost of the cars. They did not care about what we were offering for dinner. And so there is no weakness sign that is perceived either by us directly or by our dealers. I can tell you that there are also some clients that [indiscernible] that are pushing us to both, both 12Cilindri. So let's say, we keep monitoring, obviously, but we don't see any sign of weakness in this respect.

[Operator]

[Operator Instructions] Our next question comes from the line of Martino De Ambroggi from [indiscernible].

[Martino De Ambroggi, analyst]

Again, on mix, am I right in estimating that probably 1/3, if not more, of the mix effect in the first half of this year came from the growing personalization? This is my first question.

[Antonio Piccon, executive]

So I'm not able to give you confirmation. I think is I probably is not far away from reality, but I'm not able to to confirm as of now. We'll follow up on this.

[Martino De Ambroggi, analyst]

Okay. And I understand you do not provide future guidance for the weight of personalization. But I was wondering if you had -- you suffered any kind of constraint and you were not able to satisfy all the customers' demand in the past because you are increasing the flexibility with the new building. So presumably, you are ready or you expect, I don't know, or maybe both to catch more than 20%.

[Benedetto Vigna, executive]

Look, I understand you are trying to understand what is the future. What I can tell you is that if someone had the right recipe in the world, it would be much richer. Today, we are planning based on the data we have. What I can assure you, Martino, is that we have been working with our suppliers for the personalizations that are more, let's say, appreciated by our clients, and we put them in place to be agile, okay? Because -- I mean, just yesterday, for example, we were analyzing in detail with the commercial team and also the production team, what is the take rate. And the carbon -- the carbon is clearly an area that the carbon finish is an area of interest. We are sometimes in the past, the carbon, the client, the suppliers, sorry were not ready as an agile, like the -- like the client wants. Now we are improving and strengthening their capability of delivering us what we need, what the client needs. And this is what we can tell you. For the future is what I said before. That's what we are planning for.

[Antonio Piccon, executive]

In the meantime, I just checked the number and actually are not far away from reality, assuming 1/3 of the price/mix effect in H1 comes from personalization.

[Operator]

[Operator Instructions] Our next question comes from the line of Anthony Dick of ODDO BHF

[Anthony Dick, analyst]

Congrats for the amazing results. My first question is on the 12Cilindri. Great to hear your comments on the order momentum versus previous generations. I was just wondering if you might share the length of the order book of that car. You haven't said it's sold out, so I assume it's less than 2 years, but if you can confirm that, that would be very useful. And then related to this question, during Q1 results, you mentioned order book normalization because most of your cars were sold out. So now with this new car, is the order book higher than Q1, broadly the same or lower? .

And then if I have time, I could squeeze a second question on ASP. Also very impressed by the sequential ASP increase even despite lower data owners and even stripping out the 499P, so to put this in the context of your previous comments, you expected a 10% ASP increase for the full year? Is this still your expectation? Or should we expect something higher?

[Benedetto Vigna, executive]

Look, the first question is the order book depends a little bit. If it is 12Cilindri [indiscernible] or 12Cilindri the Spider because we started already production of 12Cilindri [indiscernible]. And this one is more than, let's say, 20 months, consider also one point that for the 12Cilindri Spider, it's more than 2 years. Consider that usually, we did -- you may remember, we said that with this launch of the car, we did an experiment because we wanted -- we launched it together for the first time in our history, we launched together, the Spider and the coup, and we see that the ratio between coup and spider. The spider is winning more around 60%, 65% for the order that we have in the books already. So this is the first question.

The second question is we see, let me say, yes, for sure, the orders are coming from the model that are not sold out. So the model that are not sold out are these 2. So these 2 will continue to grow the order book, the order book portfolio. And then you said with ASP, what is it?

[Antonio Piccon, executive]

Yes, whether the ASP. The first one on the order book, I think it's fair to say that it remains flat because basically, we had the most expected decline of the orders on the previous portfolio since we are delivering the new -- we are delivering the cars. And at the same time, we are growing in terms of 12Cilindri. I mean, please consider that depending on the model that we launched, the order book may go up or down. If it is a limited volume car, obviously, it does not add too many -- too many volumes to a portfolio where we keep on delivering at the same pace. To the opposite if we had a volume car, it's going to be different -- different direction. In terms of the ASP, plus [indiscernible] versus in H2, I think we keep on confirming what was the expectation for the full year. So this having an average ASP about -- in the region of 10% over last year.

[Operator]

[Operator Instructions] Our next question comes from the line of Monica Bosio of Intesa Sanpaolo.

[Monica Bosio, analyst]

Most of my questions have been already answered, but I have 2 left. One is a general curiosity. In the previous conference call, Benedetto, you said that 74% of new cars or sold to existing clients. That's fine. I'm curious about the new Ferrari [indiscernible]. Any color on the pattern of the new Ferrari [indiscernible] could be helpful. How is the distribution by country, age, powertrain? You already told us that personalization appeal is quite high. So any color would be helpful. .

And the second question is for the housekeeping in the second quarter, there was no impact from the financial charges. I was wondering if Antonio can give us a rough indication by year-end.

[Benedetto Vigna, executive]

Monica, thank you. So I can tell you this, I think that the share among new clients and repeat is, let me say, does not change so much, especially when you talk quarter-over-quarter. If we want -- I mean, we keep analyzing what is the demographic, how is changing the client profile that are approaching. One thing that we see is that also the new clients like to personalize a little bit more the car. But also here, Monica depends on the geography. It depends a little bit on the geography. There are some places where the personalization level is highest, some others where instead it's lower. So also the ratio of repeater and new client depends a little bit on the model. Maybe just as a [indiscernible], I can tell you that there are some cars that are a higher percentage of women, okay? They go to [indiscernible] even to 7%, some other cars are a little bit lower. But there is not a clear sign.

[Monica Bosio, analyst]

Okay. And in terms of country distribution and the powertrain requirements across [indiscernible].

[Benedetto Vigna, executive]

No sign -- no sign in terms of country. No sign in terms of age also. No sign in terms of age, no because one thing -- one [indiscernible] the following. Maybe we have been analyzing the correlation between the preference of the model, the powertrain and the age 0 because we thought that maybe the people that are 55, they prefer the IC instead of hybrid. Not at all true. I mean, there is no correlation. So.

[Antonio Piccon, executive]

On the second one, Monica, you may assume a number and not far away from that of last year, in the region of 15, very small.

[Operator]

There are no further questions. I will now hand over to Benedetto Vigna for closing remarks.

[Benedetto Vigna, executive]

Thanks, all. Thanks for your time today and also for your questions. This strong Q2 result and also the continuing the salability of our brands all over the world, to allow our confidence for the development of the year and for the year to come. And I wish you a good afternoon and also relaxing summer break for the ones who are going to have it. Thanks again. Thanks for your attention. [indiscernible].

[Operator]

This concludes today's conference call. Thank you for participating. You may now disconnect.