Ferrari NV

MIL:RACE

Earnings Call Transcript 2021-Q4

[Operator]

Good day, and thank you for standing by. Welcome to Ferrari 2021 Full Year Results Conference Call. [Operator Instructions] Please be advised that today's conference is being recorded. [Operator Instructions]

I would now like to hand the conference over to first speaker today, Nicoletta Russo. Please go ahead.

[Nicoletta Russo, executive]

Thank you, Nadia, and welcome to everyone who's joining us. Today, we plan to cover the group's full year 2021 operating results and 2022 guidance. In light of this, 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 Group CFO, Mr. Antonio Picca 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]

Thank you, Nicoletta. Thank you, everyone, for joining us today. Three months have passed since the last time we met digitally altogether and many things have happened in our company. Today, I will be delighted to take you through the 2021 result, and I will provide a little taste about what's happening in our company.

Our performance in 2021 was very robust from both a quantitative and qualitative point of view. Numbers first. We closed the year setting a new record in terms of results across all metrics, posting double-digit growth and above pre-pandemic level. The results were higher than the targets we had already upgraded when we shared our third quarter results. Five excellent results to remember. First, EUR 4.3 billion revenues, materially exceeding for the first time in our history the threshold level of EUR 4 billion. Over 11,000 cars shipped with significant growth in all regions. In China, our deliveries doubled year-over-year.

35.9% exceptionally strong EBITDA margin reached at a record level. Impressive EUR 640 million industrial free cash flow generation, mainly thanks to the advances collected on the special series, and thanks to the discipline and timing of CapEx spend, and all this with no impact on our product plan.

The last point is we have the strongest ever order book in our history, up double digit versus the prior year and covering well into 2023, with all regions showing significant growth.

How did we achieve this excellent -- these 5 excellent results? Firstly, we have to thank our incredible customers, both existing and new, and all the women and all the men of Ferrari for their outstanding work. Secondly, it was possible, thanks to the strong margin contribution of the Monza SP1 and SP2. Thirdly, this was further boosted by our decision to seize commercial opportunities on certain models in line with our order intake evolution. We also benefited from deliveries of the SF90 Stradale being moved to '21 from previous year 2020. And last but not least, we have capitalized on a strong economic climate as evidenced also by the solid performance of our preowned business, and on the enthusiasm of our customers whose delight in sharing their Ferrari passion with us has been so evident at our event.

After these 5 excellent results, the 5 key priorities we focused on, on all the year 2021: Product excellence, customer experience, motor racing, brand diversification and carbon neutrality. Let's start with product. Last year, we unveiled 4 new models demonstrating our leadership in technology, in design, and driving experience. They all received an enthusiastic response from the market and worldwide acclaim. In May, we unveiled the 812 Competizione and 812 Competizione Aperta, our latest special series with its revolutionary aerodynamics, and they were all sold out prior to the official launch as a testament to the vigorous demand for our V12 models.

Just a month later, in June, we launched the exhilarating 296 GTB, featuring our latest hybrid powertrain, combining a V6 turbo and electric motor. It exceeded previous model's order intake over the same relative period, and now a solid pipeline of experiences for our customers is already planned for the current year, further fueling our ambition for this model. I drove this car several times and the go-kart feeling and the fun to drive experience you can have are really unique, believe me.

A few weeks ago, in November, the new Icona, the most powerful V12 ever made, whose unveiling, I had the pleasure of attending in Florence, surprised our most loyal Ferraristi. I'm talking about the Ferrari Daytona SP3, a masterpiece of craftmanship, performance and design, already awarded internationally and limited to 599 units, which have all been allocated in advance of its premieres and with untapped demand way exceeding the limited series run.

So we entered this year, '22, with considerable momentum, thanks to 2 factors: one, the strongest ever order book; and two, a broad portfolio of models. The order book first. It has never been so strong. The positive trend characterized the whole year and continued in Q4 when we experienced impressive order intake despite our decision to close the order collection on certain models. Second, the new product portfolio. Not only do we have the broadest, most innovative and most beautiful range of cars ever offered to our customers, but we also plan to further enrich this with 2 further launches this year, completing the 15 launches promised at the Capital Markets Day in 2018.

In this year, in '22, we will unveil the much-anticipated Purosangue, which I'm confident will exceed our customer expectation. I drove it several times in the hills around Maranello day and night for the test, and I can testify that the driving experience is really astonishing, but I do not want to say more to avoid -- to spoil such a surprise.

Now after product, customer experience. In the course of 2021, it has been really liberating to be able to start arranging events with them again. To mention a few of them, we market the Cavalcade's 10th anniversary with a very special event in Sicily for classic and modern drivers, and we restarted our Tributi and Corse Clienti activities culminating in the Finali Mondiali at Mugello, where I met so many of our customers and fans, all passionate about Ferrari.

Now our motor racing activities. 2021 was our best ever season in GT racing, with Ferrari winning the driver's and manufacturer's world titles in FIA World Endurance Championship, and with victory at the 24 hours of Le Mans with our 488 GTE EVO. The Formula 1, 2021 season also showed encouraging sign towards its end with third place in the Constructors' Championship. 2022 is the first year with a complete new set of technical rules and our new car will be presented in a few days on February 17.

We are also redefining our strategic partner along 3 directions. One, we welcome back Banco Santander. Two, we tap current segments with new partners such as CEVA Logistics in the transportation space. Three, we strengthened our relationship with leading-edge technological partners, such as Amazon Web Services and Velas to be at the forefront of digital technologies and Web 3.0. Such stronger partner portfolio confirms once again the continued allure of the most successful team in F1 history, Scuderia Ferrari.

And what about the brand diversification? Well, last year, we made excellent progress in extending our brand into exciting new territories. In June, we launched the first ever Ferrari fashion collection. In July, we reopened the iconic Cavallino Restaurant in the heart of Maranello and in the second half of last year, we renovated our stores in Italy and U.S.A. In 2022, we plan to move forward, and the first important milestone will be the upcoming fashion show in Milan later this month.

Last, but not least, carbon neutrality by 2030. In a further step towards our goal, in Q4, we received ISO 14064 certification for our calculation of the group's carbon footprint. This certification has been really an important step forward. In addition to our electrification journey, we are also committed to addressing both direct, indirect emission with a focus on energy and material across all our entire value chain.

As always, our focus was not only our external stakeholders, we continued to invest in our employees, true to our founders' belief that Ferrari is made above all by people. We invested in training for our employees, caring for their well-being and nurturing the diversity of talent in our company. Our efforts were rewarded in 2021 by Equal Salary certification for the second consecutive year in Italy and for the first time in the United States. The year has been really outstanding, thanks to the passion, the dedication of Ferrari people and to reward their achievement in line with the company's strong performance indicators, I'm really pleased to announce the company -- the yearly Competitive Award up to slightly over EUR 12,000 for our employees.

And now after the 2021 highlights, let's have a look at the future -- at our future, a small taste before providing the full picture on June 16 when we meet here. We are targeting 2022 to be a solid year on the trajectory to reach the 2023 EBITDA target of EUR 1.8 billion to EUR 2 billion as announced in 2018. How do we want to do this? How we want to achieve this goal?

Well, there are 3 clear directions we identified. Number one, we will carefully manage a vibrant order intake in line with our strategy to pursue controlled growth to preserve our brand exclusivity. Two, we will manage the Monza's phase out while the Daytona's deliveries will start in 2023. Three, as I already explained in the last call, innovation requires partners and it is what we started to do, LoveFrom, Amazon, and Velas, just to mention a few of them and some other important technology partnership will follow up in the near future.

2022 is a very important year for us. It's not only the 75th anniversary of our company, it also sets the foundation for a new business plan, which will be presented at our Capital Markets Day on June 16 here in Maranello. This will also be location to meet in person some members of our new organization recently announced and achieved through both the promotion of homegrown talents and the number of key strategic externalize. The new organization is designed to further foster innovation, optimize processes, enhance agility and increase collaboration. People are the soul of our company, and I'm confident we will seize the opportunities ahead of us in this fast-evolving environment.

I will now hand over to Antonio, who will review the 2021 result and 2022 guidance.

[Antonio Piccon, executive]

Thank you, Benedetto, and good morning or afternoon to everyone who is joining us today. Let me start on Page 7, where you can see the highlights of the 2021 earnings, a very strong year, which shows high double-digit growth on all metrics compared to 2020. And more meaningfully, a remarkable increase versus pre-pandemic levels.

Our shipments reached 11,155 units, up 22% versus the prior year and 10% versus 2019. Group net revenues were EUR 4.271 billion, increased 23% versus prior year and 13% versus 2019, driven mainly by volume and stronger product mix.

EBITDA came in at EUR 1.531 billion, up 34% versus 2020 and close to 21% versus 2019. The EBITDA margin reached a record level of 35.9%, boosted by the contribution from the Ferrari Monza and an otherwise very rich product mix. EBIT was EUR 1.075 billion up 50% versus 2020 and 17% versus 2019. The improvement of both operating margins, compared to our latest guidance, mainly reflects the upward revision of the commercial revenues from the F1 commercial rights holder recorded in Q4.

Adjusted net profit was EUR 833 million up 56% versus 2020 and 19% versus 2019, resulting in an adjusted diluted EPS of EUR 4.5, improved by 56% versus prior year. Industrial free cash flow for the year was exceptionally strong at EUR 642 million, supported mainly by the collection of the advances for the 812 Competizione.

Turning to Page 8. You can see the details of the shipments of the full year 2021, up 22% versus 2020. Sales of 8 cylinder were up about 35%, while 12 cylinders were down 16%, mainly due to the reduced volume of the 812 Superfast, which was phased out in the year. Our deliveries were driven by the range models, the F8 family; the Ferrari Roma and the SF90 Stradale, which reached global distribution; the Portofino M and the SF90 Spider in ramp-up phase. Shipments of the Ferrari Monza SP1 and SP2 were higher compared to the prior year, in line with planning, and reaching the end of production. All geographic regions posted double-digit growth.

Moving to Page 9, you can see the walk of our group net revenues, up 26% at constant currency. The increase in revenues from cars and spare parts up almost 29% at constant currency was supported by higher volumes and strong enrichment of the product mix along with personalizations. Revenues from personalizations were higher than the prior year in absolute terms, sustained by volumes. They were in line with historical average at around 18% in proportion to revenues from cars and spare parts.

Engines revenues were up about 26%. The improvement is related to higher shipments of Maserati and, to a lesser extent, to the rental of engines to other Formula 1 racing teams.

The increase in sponsorship, commercial and brand, up close to 13% at constant currency, was attributable to the more favorable Formula 1 calendar and brand-related activities, partially offset by lower prior year ranking. This increase reflects also the upward revisions of the commercial revenues from Formula 1 that I mentioned before.

Currency, including translation and transaction impacts as well as foreign currency hedges had a negative contribution of EUR 80 million, mostly related to the U.S. dollar and the Japanese yen this quarter.

Moving to Page 10. Let me review the change in our EBIT bridge, explained by the following variances. First, volume was positive for EUR 220 million, reflecting the shipments increase. Second, mix price variance was also positive for EUR 212 million, boosted by a richer product mix, thanks to the SF90 family and the Ferrari Monza SP1 and SP2, along with personalizations, partially offset by the ramp-up of the Ferrari Roma and the Portofino M, and the reduced contribution of the 812 Superfast.

As already mentioned by Benedetto, the product mix in 2021 was further boosted by our decision to seize commercial opportunities on certain models in line with order intake evolution and also benefited from deliveries of SF90 Stradale being moved to 2021 from 2020.

Third, industrial and R&D expenses increased EUR 65 million, mainly due to higher D&A, product innovation activities, and Formula 1 expenses, net of technology-related government incentives, as well as start-up costs. Fourth, SG&A were negative by EUR 14 million, mainly reflecting communication and marketing activities of model unveilings and lifestyle events, as well as the company's organizational development. Lastly, other increased EUR 83 million, reflecting the more favorable Formula 1 calendar and higher contribution from brand-related and other supporting activities, partially offset by the impact of the lower Formula 1 ranking of 2020. The overall net impact of currencies was negative for EUR 77 million. As a result of what I just mentioned, EBIT reached EUR 1.075 billion, up 50.2% versus the prior year with an EBIT margin of 25.2%.

Turning to Page 11. Industrial free cash flow generation for the year was remarkable and equal to EUR 642 million, sustained by the strong growth in EBITDA, and the collection of advances on the 812 Competizione. The working capital dynamic, including the above-mentioned advances, provisions and other receivables and payable, was almost neutral, also due to the cadence of our capital expenditure, which stood at EUR 737 million. The capitalization ratio was approximately 39% for the year and in line with the prior year.

Net industrial debt as of the end of December '21 was EUR 297 million compared to EUR 543 million at the end of 2020. It's worth mentioning that excluding the dividend distribution of EUR 152 million (sic) [ EUR 162 million ] and EUR 231 million of share repurchase, we would have been cash positive at year-end.

Let's move on Page 12. Here, we explain the main drivers of our guidance for 2022, which targets a solid growth and continues to demonstrate the EBITDA progress on the trajectory to reach our 2023 EBITDA target of EUR 1.8 billion to EUR 2 billion as announced back in 2018. While in 2022, our profitability will continue to expand in absolute terms, carefully leveraging our record order book, percentage-wise, the marginality will be flattened by a product mix, which will be richer, but not enough to offset the negative impact of the Monza phasing out and of the Daytona deliveries starting in 2023. More diversified by -- but lower revenues from sponsorship and a step-up in D&A, in line with the start of production of new models, which will start the deliveries in 2023 or which contribute marginally in 2022.

On the Industrial free cash flow side, the generation will be robust, supported by the strong operating results and the collection of advances on the Daytona SP3. This will be partially offset by capital expenditures of approximately EUR 800 million as we expect the lower CapEx seen in 2021 to rephase partly in 2022, but also by much higher taxes commensurate to the very strong results posted in 2021.

Page 12 (sic) [ Page 13 ], we show the progress that we aim to achieve based on our guidance since our starting point of 2018 until the end of 2022. In essence, as of the end of this current year, we want to be very close to what we promised at the 2018 Capital Markets Day for the accumulated EBITDA, and fully on target in terms of cumulated industrial free cash flow generation over the planned period albeit with a different time profile. And we want to achieve such results despite the impact of this pandemic.

Subject to meeting our ambitions, I believe this will prove once again the resilience and strength of our business model based on brand exclusivity, product excellence, leading-edge technology and innovation. Such awareness allow us to look at the future with great confidence.

With that said, I turn the call over to Nicoletta. Thank you.

[Nicoletta Russo, executive]

Thank you, Antonio. Nadia, please, we are now ready to start our Q&A session.

[Operator]

[Operator Instructions] The first question comes from the line of Michael Binetti from Credit Suisse.

[Michael Binetti, analyst]

I guess I'm trying to think about the structure of the guidance you laid out for '22 relative to where we were at. I know you guys have been focusing us on the 2018 Analyst Day and helping explain the differences and similarities as you pushed out the EUR 1.8 billion to EUR 2 billion to next year. But this year, you've got revenues in line at EUR 4.8 billion with the low end of that original plan, but EBIT below by maybe EUR 100 million at the low end of the plan. Maybe you could just help us understand what's different on the same revenue base that drives EBIT a little bit lower this year? And if it's -- I think you originally said maybe a few units of Purosangue would start to ship in 2022, but today, you clarified that, that it'll be in '23. So maybe it's a timing mismatch. But I wonder how much of it might be attributable to the profitability of Purosangue relative to the overall fleet? Is that a car that you view as accretive to corporate margins or to the rest of the fleet?

[Benedetto Vigna, executive]

Antonio, can you help me with this?

[Antonio Piccon, executive]

Thank you, Michael. If I got your question right, I think the difference compared to the guidance we gave back in 2018 is largely due to the different timing of introduction of the cars compared to what we modeled at that time. Obviously, we are seizing the commercial opportunity that we are having. So the significantly strong order books on V8 and remodels is helping in that respect. While as we mentioned, I think the gap that we have between the phaseout of the of the Monza and introduction of the Daytona is impacting the level of the margins, both EBIT and EBITDA.

In addition to that, as far as EBIT is concerned, we have this D&A impact, which is due to the fact that we start producing new cars that are coming in, in the next one. I don't know whether this is enough or I think in terms of color, this should help.

[Michael Binetti, analyst]

Let me follow that for 1 second. You have Daytona and Purosangue confirmed to start shipping next year after what you described as a headwind from mix this year, largely Monza. But if the guide is now EUR 1.8 billion to EUR 2 billion for next year, the low end of that guide assumes EBITDA growth will slow to about 6% in 2023 from 11% in 2022. How should we think about the top end versus the bottom end of the guidance in that range? What scenario do you see that would explain a slowdown to an EBITDA growth next year? Maybe there's some phasing of investments as you guys look out to big initiatives like electric and those kinds of things. I'm just curious if you could help us think about that.

[Antonio Piccon, executive]

Yes. I think volumes will keep on growing anyway with better margins with mix, which will be stronger, which is supported by the new Icona coming in. And this isn't the -- as far as the contribution of our core business. And then we added the other businesses that we expect also to grow. I mean, brand is still very low in 2022. We expect it to be better. In terms of F1, there are some elements including the budget cap introduction, but that's, of course, in terms of the cost side.

[Michael Binetti, analyst]

Congrats on a great year, guys.

[Operator]

The next question comes from the line of Adam Jonas from Morgan Stanley.

[Adam Jonas, analyst]

I cannot wait until June 16. That's going to be really -- that's going to be so special. So I look forward to meeting you all in person. Benedetto, when you -- you guys recently struck a deal with the Swiss blockchain company, Velas Network. How should investors think about the potential for the Ferrari brand in the metaverse or in the NFT or digital space?

[Benedetto Vigna, executive]

Thank you for the question, Jonas. And also looking forward to meet you in person at 16th of June. I think that, as we said, it's important that we look and we see how the new technologies can help the -- our brand. For sure, the digital technologies, the Web 3.0 technologies that are using the blockchain and NFT is an area that is -- can be interesting for us, either the service and attention. There are many -- as you know, there are many -- there is a lot of movement on the market about this. Some companies even changed the name. And I think this is an area that -- where we have to put our attention. And that's the reason also why I put the -- we have in place, if you have seen in the organization, a department that is called Digital and Data, because I mean, it's an important dimension that we as Ferrari, we have to evaluate to consider for the future.

[Adam Jonas, analyst]

Okay. I look forward to learning more about that, Benedetto. My follow-up is, do you believe electric vehicles expand the addressable market for the Ferrari brand? And if so, how?

[Benedetto Vigna, executive]

So do you think that the electric vehicles will expand the brand?

[Adam Jonas, analyst]

Do you think that as Ferrari brings forth all electric vehicles that, that grows the addressable market and revenue potential for the brand? And if so, how do you see that happening or why?

[Benedetto Vigna, executive]

Okay. I think the point is the following. I mean electrification is one technology, like the digitalization that we will harness always in our unique Ferrari way. As you know, we already started to hybridize our model a few years ago. We have already 3 models on the road. They are pretty much successful. SF90 Stradale, Spider, and 296 GTB. And I believe that the electrification is a way -- is a technology, is a way that can help our brand to keep the pace with time. That's what I believe, Adam.

[Operator]

The next question comes from the line of Susy Tibaldi from UBS.

[Susy Tibaldi, analyst]

So my first one would be just to go back on Michael's question on the '22 guide. So your revenue guide for 2022 is quite high. And so given that the mix is going to be not that strong, it kind of implies a good step-up in volume. And so I was wondering if this is a correct assumption or if there is something else that will contribute meaningfully to the top line because you mentioned that also in terms of some sponsorship is a little bit lower. So it seems like this good increase in revenues should come mostly from the volume growth. So just wanted to check if that's the right way to think about it?

[Antonio Piccon, executive]

Hi, Susy, Antonio speaking. Your assumption is correct. Volume will be higher, so we'll grow there. And this is because the order book is significantly higher than we're used to; it's covering well into 2023. It's not true that the mix is weak. I mean, actually, the product range mix is high. It's simply not enough improving compared to the loss of the Monza and the introduction some months later of the Daytona, okay? But basically, year-over-year, volumes will be positive and mix, we expect to be slightly negative overall.

[Susy Tibaldi, analyst]

Okay. Got it. And on pricing, so in '21, it was the first time that you pushed through a like-for-like price increase, about 2%. If I remember correctly was mostly due to the inflation. And given that inflation for the moment is not really going away, should we expect something similar for '22? Like are you planning to potentially push through some price increase if -- to offset the inflation or was it a one-off in '21?

[Benedetto Vigna, executive]

Yes, this is a good and important point. I mean there is some pressure on the energy on the aluminum cost, and we will apply this price increase to consider for that, but we will also leverage other important levers when it comes to the pricing of the new model and selected -- I mean, a price increase of selected model and also the personalization. So this is an important factor we are factoring in, Susy.

[Susy Tibaldi, analyst]

Okay. Very clear. And very quick, just a follow-up on your free cash flow that you saw in the slide that you showed that you basically you're in line. You achieved the EUR 2.4 billion to EUR 2.8 billion cumulated cash flow as promised. So basically, the fact that you were guiding previously to a EUR 1.1 billion to EUR 1.25 billion industrial free cash flow is just a matter of phasing, right? Because it feels like that has been just phased differently due to the phasing of the models. Or was there some kind of advances for a future, maybe hypercar, which has now been changing timing?

[Benedetto Vigna, executive]

You got it right, Susy, phasing is the exact answer.

[Operator]

The next question comes from the line of John Murphy from Bank of America.

[John Murphy, analyst]

Just wanted to follow up on that pricing discussion. I mean, obviously, there's cost inflation that's going on, but you're talking about your order book being longer than it ever has been before. So is there a greater opportunity to take price, explain it to your customers that there's cost inflation to you? They're relatively sophisticated to offset that. But then also to maybe help balance out the supply and demand in the business. It's a very high-class problem, but it seems like there might be a greater pricing opportunity than you've ever even had before.

[Benedetto Vigna, executive]

Thank you. I think this is what you say is important. And we are considering -- I mean, we are applying the price increase, and we are monitoring carefully what's happening on these 2 dimensions of energy and aluminum. And again, as I said, we will introduce also a new model and then we will apply in the right way the pricing. So this is an important dimension that we are careful about, also because we all know what is the pressure that there is in the supply chain all over the world.

On the other side, I have to say that we have also, on the supply chain, I mean, we have some good partners, reliable partners we can leverage on.

[John Murphy, analyst]

Okay. And then just a second question on the transition to EVs. It's very interesting that Daytona as a V12 naturally aspirated engine and that sounds great to me personally. But obviously, there's a push towards EVs. Given your close relationship with your customers and you kind of build -- design engineer and build what they want, what are you hearing from your customers at this point on this transition? I mean, many other companies are slaves to guessing at where EV penetration will go and what they should do with their powertrain investment, but you have direct access and good discussion and relationships with your customers. So what are they telling you? Because on the Daytona, it seems like they're saying, "Hey, we probably don't want this right now," but the reality is some people might. So I mean, what are your customers telling you right now?

[Benedetto Vigna, executive]

I think we have -- I mean, we have different kind of Ferraristi, each one with its own preferred, let's say, model and propulsion. So we have Ferraristi that you have seen them in Florence when we launched the Daytona and they were extremely, extremely happy and delighted to see such a beautiful car. I have seen also customers trying the 296 GTB. That is a kind of different car with different feeling. So I think that if you want to get my feedback from the customer is that we have customers with different feeling, different needs, different perceptions. And even the same customer for different moments can have -- can prefer the V12, the aspirated one, or the V6 hybrid. So there is a mix of different customer with different feeling and different needs and different emotion.

[John Murphy, analyst]

But it's fair to say that you're not guessing at this, you're having these discussions with your customers. So you -- what you're introducing and you're building is what they want. You're never going to misestimate the EV penetration on the models, right? I mean, if this is something that's well known by you through that order book and your discussions with your customers. Is that a fair statement?

[Benedetto Vigna, executive]

No, I'm saying that there is a clear trend, and we will work on for sure on next vehicle, and we will see the strategy line up here on June 16. What I want to say is that there are customers -- different customers that prefer different kind of propulsion scheme. So we are aware obviously of what's happening. We have planned for that, but we are also aware of the different feelings and different emotion the customers want to get with different propulsion scheme.

[Operator]

The next question comes from the line of Giulio Pescatore from BNP Paribas Exane.

[Giulio Pescatore, analyst]

I just want to follow up on the previous point. In your answer, did you mean that as long as customers will want combustion engines, you will be willing to provide them even if we think about 10 or 20 years down the line?

[Benedetto Vigna, executive]

I think that the technology is useful as far as it address the customer needs. We have to delight the customer. We have to -- I mean, this is important for us. So if we are moving piston or we are moving other things, that's what we want to do.

[Giulio Pescatore, analyst]

Okay. And then the second question on the order book for the 296 GTB, which you said built faster than the previous -- the predecessor of that vehicle. Does that mean that, that car could potentially do the same type of volumes that Tributo F8 or 488 did in the past? And can you maybe talk about the difference in demographics between that vehicle and the 488?

[Antonio Piccon, executive]

Maybe I...

[Benedetto Vigna, executive]

Yes, you can go, Antonio. I think you have...

[Antonio Piccon, executive]

We provided the forecast on volume life cycle. However, as Benedetto said before, the fleet has been very strong in terms of order compared to our previous internal benchmarks. The other element, yes, I think you are addressing the fact that the -- our customer base for this car is slightly younger and this is true.

[Benedetto Vigna, executive]

I mean, really, you need to drive it to experience it. It's...

[Giulio Pescatore, analyst]

I'm asking you to provide a driving experience at your CMD, I'll be more than happy to...

[Benedetto Vigna, executive]

Yes, we will.

[Giulio Pescatore, analyst]

Fantastic. Great, I'll be there. Maybe just 1 last one before I pass on to the next speaker. On the free cash flow for 2022, I really started to bridge your guidance, which feels very, very conservative at the lower end, at least. I understand the step-up in CapEx. I understand that there are going to be higher taxes. But can you maybe help us with the amount of deposits that we should expect from the Daytona? And how many deposits did you receive last year for the company, Antonio, because it's really difficult to bridge that number?

[Antonio Piccon, executive]

Well, I cannot comment on the degree of conservatives of the estimate, but basically, our cash flow is relatively simple. I mean, we have the EBITDA and you know what the guidance is, you know what we said about CapEx. I think your question is about the working capital where we include in the wider definition, also the impact of the advances on the limited series cars. So the Daytona, we are talking about more than EUR 200 million more or less in terms of current estimate. The other element you should not underestimate is the impact of taxes because we are obviously paying taxes, both in terms of the balance and the advance on the basis of the results of 2021 and it makes a big difference compared to what we paid in 2021 based on the results of 2020 that were impacted by the pandemic. All of this provides you a better understanding of the detail.

[Giulio Pescatore, analyst]

Yes. But you're still benefiting from the Patent Box, right?

[Antonio Piccon, executive]

Yes, the Patent Box is helping, but not in terms of cash, not at the level it did at the very beginning, because now the law provides for the benefit cash-wise in 3-year installments. So this has been already visible in 2021, and it will be obviously in 2022.

[Operator]

The next question comes from the line of Martino De Ambroggi from Equita.

[Martino De Ambroggi, analyst]

My focus is on CapEx, which is a portion of the lower free cash flow for the current year. So the EUR 800 million may be considered a sort of peak for CapEx or should we expect they will go beyond EUR 1 billion annually going forward? And when you talk about partnerships, I remember you also mentioned partnership in order to reduce CapEx. I clearly understand you cannot talk about something that was not announced, but just to elaborate a bit on this in order to understand what could be the magnitude of the reduction in CapEx, if any?

[Benedetto Vigna, executive]

Thank you, Marco. You remember well, the partnership are important way forward for us and as I said also before, there would be some partnership that is an important partnership for us. We will announce in the near future. I think that -- I mean, it's important that is always also what I said in my previous slides, to keep strong discipline about CapEx and to keep the momentum and to make sure to do something innovative, it's important. We decide what we do internally, and we decided and what we want to do with partners outside. So the 2 words are partnership and discipline. And as I said, in the near future, you will hear about an important partnership on something that is important for our car but for which, let's say, we believe the best way forward is partnership.

[Martino De Ambroggi, analyst]

And on the amount of CapEx, EUR 800 million could be considered as a peak?

[Benedetto Vigna, executive]

You can consider this more or less a good number to think about because we will use, as I said, the partnership to optimize and to be disciplined.

[Martino De Ambroggi, analyst]

Okay. And talking about volumes based on what you commented before, I would expect higher volume growth than the usual, let's say, average 6% we saw in the last few years?

[Antonio Piccon, executive]

Yes, this is a bit result of the significant net order intake increase that we have seen this year. So we need to serve this one. Obviously, we'll be very careful because the concept of cars remains crucial to our business model and this is an element of significant attention. We'll play all leverages to manage this one.

[Benedetto Vigna, executive]

And for sure, the broadest portfolio -- the broad portfolio we have, it's helping to protect also the brand exclusivity because in this year, we have a lot of models that are in production.

[Operator]

The next question comes from the line of Stephen Reitman from Societe General.

[Stephen Reitman, analyst]

I understand what you're saying about the mix in 2022. So just to dig a little more detail in that. First of all, is my understanding that you'll still be selling some Monzas in the first quarter of 2022, so we could see maybe something up there? And my second question is about the claims deliveries of the 812 Competizione and how many would you expect to be delivered in...

[Benedetto Vigna, executive]

Reitman, there is a lot of noise on the background. We are having problem to understand your question. I don't know, it seems there is someone unmute, I don't know.

[Stephen Reitman, analyst]

I'll try again. Sorry. Okay. Try again maybe. Yes, I'm sorry, no. I just wanted to ask, first of all, I understand that you will be selling still some Monzas in the first quarter of this year, this final model. Would that have an impact expected in the first quarter of this year still? And secondly, could you talk about the cadence of deliveries of the 812 Competizione, obviously, a very high-margin car for you in the quarter of 2022?

[Antonio Piccon, executive]

I think in terms of the Monza, we'll complete the deliveries of the Monza in Q1. However, the absolute number will not be as high as it has been during the last quarter of this year. 812 Competizione and Competizione Aperta will be spread quite evenly across the fourth quarter.

[Operator]

The next question comes from the line of George Galliers from Goldman Sachs.

[George Galliers-Pratt, analyst]

The first question I had was just on the volumes. Obviously, you're now above 11,000 units. I think in the past, previous management mentioned that max capacity was about 15,000 units on the existing industrial footprint. Is that still roughly the right number to think about? And in order to get that, presumably, you'd have to add shifts. What's the kind of lead time from a trading perspective to add incremental shifts?

The second question I had was with respect to the carbon neutrality by 2030. Do you still expect e-fuels to play a prominent role in reaching that target?

And then finally, obviously, we had significant management changes and some exciting promotions and external hires during the quarter. Perhaps you could give some insight into the skill set you were looking to promote as part of those management changes?

[Benedetto Vigna, executive]

I'll start from the last one. The management change and the carbon neutrality and the first one, Antonio will take it. So let's start from the management change. Yes, we did a big change at the beginning -- end of last year, beginning of this change -- beginning of this year. And we did along 2 directions, if you have seen. On one side, we promoted our internal talents that I had the pleasure to see because I talk to a lot of people in the company, and those will externalize. I think what the common threat that we wanted -- and I wanted to push this new organization are the 4 following ones.

Number one, the strong willingness to cooperate. Number two is about attention to innovation and number three is the focus to bring these things, especially in a transition area to make the right -- the right choice, the right decision with the right timing and to move forward. And number four is very important, especially nowadays, this is becoming very important for all the companies. It is this continuous learning approach because we have to be open to listen the other point of view, other people's point of view and also the supplier's point of view, the partner's point of view.

So these are the features that I want to boost with the new organization, again, organized with the homegrown talents and also external hires. This keeps for granted, let me say, competencies that are -- all these people are bringing in the game.

Coming to the second question, the carbon neutrality. As we said, the carbon neutrality, we will show you a clear plan in -- when we meet here in Maranello. The target is to become carbon neutral by 2030. We want to do it looking at all the carbon emission we generate directly as well as the carbon emission that get generated along the value chain. And we want to do in a scientific way and so that's the reason why we are also proud if you want of this ISO certification we got in Q4, because it testifies that we are substantiating these numbers with a scientific approach. I think that if we want to tackle this properly, we need to do it scientifically and that's what we will do and that's what we will show you in June.

Now the first question, Antonio, you can take that.

[Antonio Piccon, executive]

Yes, George. On the first one, yes, 15,000 units is the level of capacity that we have. There has been no change in that respect. And the second one, we are working on to shift and we predict to be there even for 2022. Hope this helps.

[Operator]

The next question comes from the line of Monica Bosio from Intesa Sanpaolo.

[Monica Bosio, analyst]

I hope you can hear me. My first question is on the volume growth in 2022 on the back of the strong order book, the ramp-up of the new entry models seen in 2022. The volumes impact would be significant over the current year. I was wondering if these could bring some phaseout of some models such as the F8. And as for the price mix, I was wondering if you can elaborate on what do you expect in terms of personalization for 2022?

And my second questions is -- are housekeeping questions. As for the advances from the Daytona, should we assume an impact mostly in the first part of the year? Is it correct? And in terms of taxes, you mentioned that the taxes will be higher at the cash impact level in 2022. Can you give us some highlights at the P&L level?

[Benedetto Vigna, executive]

I take the part of the phase out of the model. As I said, in Q4, we stopped -- we did not take order anymore on some models and this is done for the sake of brand exclusivity. The personalization gives a good contribution to our top line. And for the Daytona and the taxes, maybe Antonio, you can take it.

[Antonio Piccon, executive]

Sure. Daytona is significantly contributing in terms of cash flow with the advances in Q1. Maybe you remember what happened back in 2019 with the Monza. And in terms of taxes, yes, we are currently projecting something like approximately EUR 200 million additional cash out for taxes during the course of '22.

[Monica Bosio, analyst]

EUR 200 million.

[Antonio Piccon, executive]

Yes.

[Operator]

Dear participants, thank you very much for all your questions. And now I would like to hand the conference over to our main speaker today, Mr. Benedetto Vigna, for closing remarks. Please go ahead.

[Benedetto Vigna, executive]

Thank you. Thank you so much, and thanks all for your time this afternoon and also for all your questions. Let me close by underscoring 3 things: One, our excellent 2021 financial result with an exceptional EBITDA margin. Two, our record order book covering well into 2023. And three, our broad innovative and beautiful product range with 2 new launches to come in this year in 2022.

Today, I realize -- I mean, we provided a little taste of what's happening in our company. I realize that you want to hear more and we are as eager as ever to seize these opportunities ahead of us and to share with all of you the full picture on June 16 in Maranello at Capital Markets Day. So good afternoon, everyone. Thanks again for your attention and talk to you in the next quarter. Thank you.

[Operator]

That concludes our conference for today. Thank you for participating. You may all disconnect. Have a nice day.