Ferretti SpA

MIL:YACHT

Earnings Call Analysis

Record Backlog and Adjusted EBITDA Growth Signal Positive Outlook for Ferretti Group

Ferretti Group reported revenues of EUR 865 million, a 3.8% increase, and an adjusted EBITDA of EUR 138 million, up 10.7%, reflecting a 16% EBITDA margin. The company holds a record backlog of EUR 1.6 billion. Despite a 9.9% decrease in backlog as of September 30, recent order intakes in early Q4 added EUR 300 million, predominantly from the Super Yacht and Made-to-Measure segments. The U.S. market shows potential for growth, with forecasts suggesting up to 21% revenue growth for 2024. There are optimistic projections for 2025 and beyond, emphasizing strong visibility in high-margin segments.

Facing Market Challenges with Resilience

The Ferretti Group's latest earnings call revealed a revenue of EUR 865 million for the first nine months of 2024, reflecting a modest growth of 3.8% compared to the previous year. Their adjusted EBITDA increased significantly by 10.7%, reaching EUR 138 million with an EBITDA margin of 16%. While the order backlog displayed a disappointing decrease of 9.9% at the end of September, the management expressed confidence due to an unprecedented level of order intake subsequently, bringing the backlog to an all-time high of EUR 1.6 billion. The leadership acknowledges the volatility in different markets and is committed to navigating through challenges with a strong focus on efficiency and profitability.

Segment Growth and Market Dynamics

The company reported varied performance across its segments. The Super Yachts segment saw robust growth, surging by over 53.2%, driven by high demand, while the damage to the Composite segment was noted with a drop of 21.4%. The Made-to-Measure boats experienced a temporary slowdown, but the management identified a brighter outlook beyond the third quarter. Notably, the geographical distribution of orders highlights a stronger recovery in Europe, counterbalanced by delays in the Americas which were expected to recover heading into 2025.

Guidance and Future Outlook

Management has reiterated their mid-term guidance, suggesting a solid foundation for future growth. They anticipate growth primarily driven by the U.S. market, pointing to a potential 21% revenue increase beyond 2024. Looking ahead, visible demand for Made-to-Measure and Super Yachts could lead to significant revenue gains, particularly as more contracts close in high-demand regions. The leadership reinforced their commitment to a controlled approach to growth amid uncertain market conditions.

Financial Health and Investment Strategies

The financial position remains robust, with a net financial position of EUR 150 million. The company reduced their capital expenditure to around EUR 25 million primarily for shipyard developments, expecting a slight decrease in CapEx moving forward, targeting a more normalized expenditure ratio of 5% to 6% of total revenues from 2025 onwards. This cautious yet strategic investment in R&D and infrastructure reflects the Group’s intent to remain competitive in product offerings.

Market Positioning and Consumer Sentiments

The leadership highlighted the importance of maintaining premium branding and pricing, particularly against a backdrop of growing competition in mid-range markets. They emphasized that while the luxury yacht industry offers significant opportunities, consumer behavior in the U.S. has been temporarily subdued due to market uncertainties. However, there's optimism following the recent elections and a perceived revitalization in consumer interest and financing options as the Federal Reserve lowers interest rates.

Concluding Reflections

In summary, while Ferretti Group navigates current market headwinds, its all-time high backlog, strong revenue performance, and strategic initiatives signal resilience and potential for upward movement. Investors should monitor how market dynamics evolve, especially in the critical U.S. and European markets, as these factors will inevitably shape the company's performance in the upcoming quarters.

Earnings Call Transcript 2024-Q3

[Operator]

Good morning, and welcome to Ferretti Group 9 Months 2024 Business Update. Today's update will be presented by Mr. Alberto Galassi, Chief Executive Officer; and Mr. Marco Zammarchi, Chief Financial Officer. [Operator Instructions]

Mr. Galassi, the floor is yours.

[Alberto Galassi, executive]

[Foreign Language] Good morning. Good afternoon for the friends in Asia Pacific. Alberto Galassi speaking. I'm giving you the highlights of the first quarter of -- sorry, the third quarter of 2024. But even more important, what is the picture of today, what is the flavor of the market, how do we see the future of '25 and '26. And before that, I would like you to enjoy and entertain yourself for a minute on the latest video that we have here in Ferretti Group. Thank you.

[Presentation]

[Alberto Galassi, executive]

Thank you very much. Thank you for paying attention to the constellation of the 7 brands we have, which is a great point of strength. We'll go through it. Now let's go through the numbers of the -- the picture of September 30, 2024.

So the revenues, EUR 865 million, plus 3.8% versus previous year. Adjusted EBITDA, an important growth, much higher than the revenues, EUR 138 million, so 10.7% higher than EUR 125 million of the last 9 months of 2023. And the margin, the margin keeps growing, showing and confirming the guidance that we gave, so 100 basis points higher, 16% of EBITDA margin.

Now order backlog, this is interesting. The order backlog is minus 9.9% as of September 30. But let me spend 1 minute on the composition of our order backlog and 1 minute on the business that we are.

And so the average price tag of Ferretti Group is EUR 6 million. So 2, 3 boats, 10 boats, 7 boats, which are closing at the beginning of October instead of the end of September, are completely changing the numbers in terms of geography, in terms of type of boats, whether it's a composite, Made-to-Measure, Super Yachts, and more important, in terms of size of the order intake.

Now the picture of today, as we speak today, is the highest record-breaking number of Ferretti Group. So of course, we are obliged to give the numbers at the 30th of September. And to be honest with you, we don't like that number, minus 9.9%. But if I have to say, the picture today is EUR 1.6 billion, which is the highest backlog of Ferretti Group ever.

So what's the message? The message is that the company is growing into its efficiency, its growing to marginality, it's growing into the EBITDA. The picture of the market is there is a market there. And I appreciate my colleague and competitor, Sanlorenzo, in saying, definitely, there is a market there but let's see where the market is. Let's see which kind of boats the market is looking at. Let's see which geographic areas are more alive and brilliant than others. Well, the strength of Ferretti Group is, again, 7 brands, and we sell it in 71 countries. We know that our business has ups and downs, some countries may go down, and we'll go through it in a minute. But again, there's a lot of life in the industry, especially for 2 segments: Made-to-Measure and Super Yachts.

Let's go to the following pages. Business highlights. I'm very proud to say that when you have a brand like Riva, which has no competition on earth, in the industry for sure because it's an icon, it's bigger than ever, it's a legacy that we kept older than [ 180 ] years, you can have -- and we always said that the brand Riva can open up new horizons for business developments and for source of revenues.

Very proud to announce that in Fort Lauderdale, we announced at the boat show no less than 10 days ago, the first residential luxury, we said that proudly in Italiano, Riva Residenze, because, again, we called Riva in Italiano. We got all the Italian names, and we want to call also anything linked to Riva using our language and our proud nation. So Residenze. Technically, it has 36 exclusive apartments with interior design solutions by Riva. Most of them will also have Riva furniture inside. Some design furniture are working on us to make it specific. It's a great development. It's in Fort Lauderdale, very close to the Ferretti Group America showroom.

But the interesting point, first of all, it's a source of revenues for the company, it's a source of royalties for the company, it's a brand new development. And if you see down under in the picture, you see some boats. Well, we are expecting also some boats in the American market, which is the market that has been literally frozen for the past months before the elections to be, again, a positive, giving us a positive outcome because also of that kind of combination of residencies and boating in front -- very close to the boat show location and very close to our facility. So proudly announcing that whatever we promised on the Riva brand extension is actually happening in a big scale with big numbers, and this is the first of many projects we are evaluating today.

Then what we do in business, we do boats. So we keep investing. This year, if I'm not mistaken, so far, we invested, Marco, EUR 25 million in R&D. We keep investing, investing, investing because we believe that even when the market is not the best market ever, well, you need to be differentiated by the competitors. And with the brands that we have and the new lines of models that we opened up, the Ferretti yacht INFYNITO 80, which is the smaller sister of the Ferretti INFYNITO 90. Let me remind you, the most, I would say, eco-friendly yacht in the industry, 1 unit is already sold and 9 units of the sister, 90 INFYNITO has been sold in the market. And the brand new styling, I would say same as 60 Ferretti, more than 60 units in the market, 5 units just of this one.

Then any time you touch -- and we announced the new [ 940 ] project. And just on paper, we sold 5 units. And the [indiscernible] is not even seen in the market yet.

The Iseo Super, which is the evolution of the entry-level boat that we have. Let me remind you that the entry level boat for a 27 footer in Riva factory is nearly EUR 400 million -- EUR 400,000. Then the Aquariva Special projects, so the lightest evolution of boat that's been developed in more than 300 units since year 2000 and since the announcement, 3 units are already sold. We are above EUR 1 million here -- around. Riva want to have Dolcevita Super. Well, that's the flagship boat, the Dolcevita and the future comes on the size of made to measure. So from 30 meters onwards are one of the best-selling models ever and 3 units are already sold.

Let me please you, if you don't mind, with the video of what is the Dolcevita looking alike and why the market is liking it so much, please.

[Presentation]

[Alberto Galassi, executive]

Thank you. Boat show season. The boat show season is very important to give a flavor of what's going to happen in '25 and '26 and in '27. And how did it go? So we had the Private Preview Monaco, followed -- again, we had to see -- we had Robbie Williams performing for our clients and it was a great success. Then the Cannes Yachting Festival, Genova and Monaco. This is very important, [indiscernible] the season ended.

Then the big question mark of the U.S. There was a big enthusiasm and, I would say, positive feedbacks from the boat shows that has mirrored and reflected into orders in the month of October and November. But the big question mark was America. What's going to happen in America? So Fort Lauderdale, they started under pouring rain. I never had so much rain like for those at the beginning of the show and the day before the elections. As I said, the America was frozen. America was waiting. America was on standby. I would say, not only in our industry, generally speaking.

Then the outcome of the election somehow gave a spark to the industry. And somehow we have a positive feedbacks, which are actually orders coming from the U.S. We had the Federal Reserve that cut the tax interest, very important for people that are asking for financing for yachting. And we started with, I would say, mixed emotions on the American market. Today, it can be a fantastic upside for ourselves within the year-end and -- or it can be still on standby. But what is the outcome of the boat shows? Well, the outcome of our boat shows is the record-breaking order intake of Ferretti Group.

Now the order intake, as you see, 2023 was EUR 1.120 billion, 9 months was lower as per today, and again, the picture is the picture that I have to give you at the end of September. But the flavor and the highlight I want to give you today, I want to share with you is that in the beginning of the fourth quarter 2024, we secured almost EUR 300 million of orders, which is an incredible signal. It's mainly in composite and super yachts, but it's an incredible signal. So if you add on top of this the potential upside of America, well, we can have very good surprises at the end of this year and the beginning of 2025.

So we have ongoing negotiation totally completely in line with the same period of last year. So we may end 2024, we'll see the results at the end of the last quarter with a higher order backlog than 2023, for sure.

So order intake by segment, let's go through the segments, which is interesting. And again, it says what is very obvious. Start from the composite, which is, again, let me remind you, below 30 meters. We have a minus 25.4%. But don't forget that the previous quarter, Q3, there's been a big recovery since Q3. Q3 was minus 38.5%.

So what is that? Because the composite segment is basically driven by very good performances in Europe. The season, as you remember last presentation that we had started very late, the season woke up very well. We have an increase in the composite segment, which is the one which is actually suffering the most. It's not a secret. I mean, you can double check that there are some shipyards which are not selling boats, they're actually selling discounts, which we don't do thanks to the brands that we have. But the reality is that we've been better than the performances of the quarter, still not better than the record year 2023.

Made-to-Measure, well, the comparison year-to-year was nearly unbeatable because if you think the exceptional performances of the Made-to-Measure in 2023, well, you cannot beat, it's minus 16.9%. But still, that segment in the month of October and November boomed. And Super Yachts is [indiscernible] by itself, it's plus 53.2%, sound growth and more and more to come. This enables us to have visibility '25, '26, '27 and '28.

Let's go back by geography. Geography, as I said, Europe recovered because Europe was, in the quarter, minus 39%. Now it's minus 20%. So summer season drove the outstanding growth in Europe, plus 67% compared to the previous -- to the third quarter of last year.

So now Middle East, again, affected by the incredible outcome of the previous year. Middle East, again, was an incredible number. But if you see the percentage, it's not very different. And already positive outlook at the beginning of the first quarter. If I have to say, the first quarter -- the last quarter, sorry, of 2024 will give an incredible upside for Europe and Middle East.

Asia Pacific, it's nearly technically missing in action. So without greater China and Greater China in terms of luxury and in general is actually having other priorities and other difficulties. Thailand, Australia, New Zealand are not big enough to compensate. So still on hold and let's see what's going on in Asia Pacific. We were not expecting great numbers, but definitely, Asia Pacific is not performing.

America is in line, and we are waiting for 2 important things: the start of the nautical season and the election in the U.S. The election in the U.S., we know the outcome, and for the market, it's been a positive outcome. If I'm not mistaken, [indiscernible], which is a distributor of small yachts in the United States and a listed company, after the election raised, if I'm not mistaken, 15%. Now it was a very emotional reaction, but still is a signal.

Let's go to have a look at the order backlog and the net backlog. Now if you consider that the additional EUR 300 million after the end of the Q3. So the -- the actual order backlog of this company is EUR 1.6 billion. Now the picture of September says that we are minus 9.4%, as I explained before. So the net backlog is basically stable in 9 months, but let's see the visibility. 2024, nearly the America will be the only one that can give us a big upside, which is 21%, beyond '24, 79% of this. And with the latest addition of the backlog, we are covering 25 important portions of 2026.

So are we worried about the visibility? No. Are we surprised about what's going to happen? No. Is America giving signs of coming back? Yes. Could there be an upside coming from the U.S.? Absolutely, yes. But again, it is what it is. This year with America frozen, we cannot ignore. The reality is that we have a very positive feeling and a very positive feedback from the market for what matters more, which is the visibility for '25 and '26 and '27 onwards in the 2 segments, which are giving us the most marginality and the better performances in terms of cash generation, which is Made-to-Measure and Super Yachts.

Now let's go to by segment. You can see that Super Yachts increased compared to the 9 months of 2023. So as I said before, incredible visibility, very good visibility for the future. Composite, minus 21.4% Made-to-Measure and Super Yachts.

So let me, again, highlight it and stress it once more. It's a new market. It's a new world. It's a new industry. I like very much the honesty and the clarity of one of my competitors when he said, there is a market there. Yes. You need to go and get it. Yes. And the market is especially in the Made-to-Measure and in the Super Yachts. That's exactly what we are seeing. But if America wakes up and if America comes back to where it should be and where it belongs in terms of positioning, because of market, because of geography and because of seasonality, which is from now to March, we can have incredible and important upsides coming from the U.S., which we don't underestimate. Revenues.

[Marco Zammarchi, executive]

Boat the revenues in general terms, as I said before, we appreciate an increase of 3.8%. But if we analyze by segment, we can say that the revenue highlights a temporary slowdown of the Made-to-Measure segment due to the dynamics of the actual order intake, while the other 2 segments are continuing to increase. So it's something that is really temporary to this segment.

Instead, by geography, we can say that the only performance that we are missing at this moment is the one about the Americas due to the delayed order intake of the Composite segment. And we expect with the release of the full year result in consideration of the exceptional order intake that we recorded in the first -- in the month following the closing of the quarter, we should give a better result, but waiting for [indiscernible] Composite result.

In terms of profitability instead, we appreciate the growth of EBITDA that is confirmed in quite solid with an increase of nearly EUR 30 million, and in percentage of 10.7%. And especially in terms of EBITDA margin, where the increase is 100 basis points, so moving from 15% to 16%.

At a net profit level instead, the number is quite aligned with prior year results in consideration that in 2024, we cannot benefit anymore of the tax revenue -- deferred tax asset recognition that has influenced our result since 2018. So this is something that we have to take into consideration for the future.

About CapEx, we said that we -- in Q3, the CapEx activity was nearly EUR 25 million. So we are slowing down the CapEx and the majority of this CapEx, it was related to the completion of the Ravenna shipyard that we already explained that is quite fundamental for the continued growth of the company given the situation of our existing plant. And the residual part is due to the investment to the capital expenditure in research and development because you know that every year, we strongly believe that it's important to launch into the market between 5 and 6 model belonging or to restyling or expansion of our product portfolio in order to be quite appealing with our customer.

So that we expect for the 2024 to be aligned slightly less than 2023. But what is important to highlight is that from 2025 onward, we expect a sharp decrease in the CapEx activity, bringing the company to this normal ratio between 5% and 6% on total revenues.

Few comments about net financial position. Okay, as you can see, it's EUR 150 million. But before to comment the movement of the net working capital, we wanted to highlight that, again, due to the cutoff that we have to apply and the average, significant average ticket of our company. Just to give you an idea, the week following the closing, we have collected more than EUR 25 million. So it's something that changed a lot since the closing.

In terms of net financial -- in net working capital, we have to highlight that usually in Q1 and Q3, we build up the inventory for the season. And so in Q3, we experienced the combination of the building up of inventory with the delayed order intake in the Americas with -- in the Americas related to the Composite segment. So say that, I believe we go for the final remarks, Mr. Galassi?

[Alberto Galassi, executive]

Okay. So midterm guidance confirmed, and we updated in part of the annual guidance. So revenues and adjusted EBITDA, it's basically driven by the U.S.

Now before I enter into the numbers, which I'm not one that [indiscernible], I need to tell that this number can be [indiscernible]. First of all, we have a pickup in the market. We've seen a pick up out in the market after the end of September. So we -- in the midterm guidance, we're not going to change it, and we strongly believe in that. And the adjusted EBITDA margin shows that the marginality is exactly as we expected.

The adjusted EBITDA, which is a consequence of the revenues, can be lower, slightly lower, to be honest, very [indiscernible] lower because of the American market. Now let's see this picture in a different way.

Option 1, you don't announce to the market that can be a change, slight change in the revenues because America is picking up, or in a more conservative way, you announce this to the market and that could be an upside. So this is Ferretti Group. Ferretti Group, we want to tell you exactly what we think is a scenario that we don't like and having an upside and a good news than the opposite and the other way around.

So I believe that facts are same. There's a pickup in the market after the end of September. Yes. The pickup in the market is in the 2 segments that matters more in terms of -- sorry, nobody heard what I said because -- I'm sorry. Typical, when you're old, that's what you said, what happens. I should be more digital.

The pickup in the market says that it's in the 2 segments that we care the most because the Made-to-Measure and Super Yachts gives us enormous visibility for '25, '26, '27, '28, it's definitely better for our cash generation for sure. It's been proven by facts and history in 10 years' track record of performances. And again, there's a sort of a gold mine sitting in the U.S., which is waiting to be unleashed if the market is there because the boat has already been produced. -- the cost of the boat has already been there. The cash is sitting there, and there are signals that the market may come up. If this happens, there could be an upside for the first quarter '25 and the end of 2024.

So in a very conservative way, we thought this was the right way of approaching and informing the market and the audience about that. But we are informing the market with sitting on the EUR 1.6 billion of order backlog, which we never had in the history. So there is a market, yes. It's a market which is a global market. So some countries can go down. Some countries can go up. It's there. We actually are harvesting for what we have invested, both in products, in events in boat shows. And again, if you sell in 71 countries at the end of the day and you have the best brands or among the best brands in the world, and you're focused on selling in the right way and not selling discounts, well, it pays off.

So the message I'm conveying is a positive message. And you read this one like, okay, these guys are fair, are serious. But potentially, there can be an upside coming out of that. It's just America after the election and the signals are there is confirming the feeling, the initial feedbacks that we have.

[Operator]

[Operator Instructions] The first question is from Emanuele Gallazzi from Equita.

[Emanuele Gallazzi, analyst]

I will start with 2 questions. The eleven is on the EUR 300 million of order intake in the fourth quarter. If you can just elaborate a little bit more about that, maybe giving some details on the segment and on the geographical mix of these orders.

The second one is on the net working capital dynamics because basically, it was back to positive. You mentioned the inventories up for the U.S. season. If you can just provide us some more details about that. And looking at more, let's say, medium-term target, where do you expect the net working capital around sales ratio to be for your company?

[Alberto Galassi, executive]

We said the Made-to-Measure. And so the big Rivas and the big custom lines and Super Yachts are definitely driving the EUR 300 million of orders. I would say -- sorry, again, the mic. I don't know if you listened to me. I said the Made-to-Measure, basically the big Riva from 30 meters onwards, the big custom lines and the Super Yachts are definitely driving the EUR 300 million. That segment is very good. Composite, we had some very good feedback, especially in some brands. There is a brand that suffering more than others, which is Pershing, and we are focusing on that, but it's not affecting definitely what is the visibility for the next years.

So geographically, I would say Europe and Middle East, are doing that. And for some big Riva also United States of America. So again, it's leopard skin. It's not you can't say can say, this area doesn't exist anymore. This area is gone forever. The only one which is a sort of a sleeping tiger is Asia Pacific. On the rest of America, you have sparks which is the nature of our industry. If you have EUR 6 million price tag, which can move -- 3 units can move from A to B in an important way or if you can go up to more than EUR 100 million for such a Super Yacht, well, that moves as well, and the important digits from one geographic area to the other.

So on the overall, I would say there's life all over the world in many different countries from the Gulf to Europe to United States, especially from 30 meters onwards in terms of both, 100 footer onwards. What the only sleeping tiger is Asia Pacific.

Marco, if you want to comment on the others?

[Marco Zammarchi, executive]

About the net working capital dynamics. Usually, our company move with Q1 and Q3 where the working capital is increasing because we are building up inventory. And usually, we have a reversal in Q2 and Q4. So we expect that in Q4, we should be again closer to 0 or in the same range because of the reversal. And in particular, in this quarter, we have said we had experienced that -- we have a 2 effect. The building up in inventory and the delayed order intake in the Americas for the composite segment. That means both already produced. So that's the rationale behind.

But usually, our company is moving. At the year-end, we are always closer to 0 or 0. But during the quarter, we moved up and down with Q1, and with the Q1 and Q3 absorbing while the other Q are releasing cash.

[Operator]

Our second question is from Adrien Duverger from Goldman Sachs.

[Adrien Duverger, analyst]

I have a couple, please. Could you please comment just maybe on the consumer outlook you're seeing in different regions and maybe by the -- in terms of the different price categories, maybe the difference between Composite, Made-to-Measure and Super Yachts, both in the U.S. and in Europe?

And then my second question would be, if you can comment on the M&A pipeline and on potential acquisitions or expansions of the different shipyards?

And maybe just a last one, if I can. If you could comment on the pricing environment this year and if you see any impact from discounts or incentives for clients at the moment?

[Alberto Galassi, executive]

Can you repeat the third one, sorry.

[Adrien Duverger, analyst]

Yes. The third one is just about the pricing environment that you're seeing and if you're seeing any impact from discounting or incentives to clients in the market.

[Alberto Galassi, executive]

Okay. Let me describe you briefly in terms of pricing. So Composite goes, stops around, I would say, EUR 9 million, EUR 10 million, from EUR 8 million to EUR 10 million is really the threshold of Composite Made-to-Measure goes from EUR 10 million to EUR 25 million and Super Yacht goes from, I would say, EUR 30 million to EUR 150 million. So that is more or less the composition of our portfolio of products.

So we started with the 27 footer that people are selling for EUR 100,000. We are selling it for EUR 400,000 because it's Riva or a Wally. It can be EUR 1 million for Wally 43. And we go up to EUR 150 million. Don't forget that we kept ourselves not to do anything bigger than 90 meters. It's a decision that we took to stay in a sort of not over past the threshold of the 3,500 [ GT. ]

Now geographically. While geographically, it's interesting because, as I said, United States, big boats is not a problem. Middle East is not a problem. Europe is not a problem. Super Yachts is global. Super Yachts totally, definitely global, big surprises we had in the past 2 months are coming from Europe and Middle East.

Composite market is a lot -- Europe plays an important role because there's a historical reason. I mean there's an infrastructure in Europe for that. Composite is where the business started in Asia Pacific. So nothing bigger than 30 meters is basically sitting there 30, 35 meters maximum in Hong Kong. You can get something bigger than that. In the U.S., it's a global market that goes from very small and we don't play in that arena. Thank God we don't play in that arena. It's the most competitive arena, and that enables me to answer to the last question.

Pricing is a war without prisoners anything that goes below EUR 1 million. Anything around EUR 1 million, EUR 1.5 million, EUR 2 million is a war with no prisons. But thank God, we don't play in that arena by decision because we play in that arena only with the top brands. So basically, there's no apples with apples that the client can do in our size. Sometimes you can do with a small Pershing. You can do with a small Ferretti. And that's where the war is. The war is definitely not on the higher segment.

Again, on the pipeline. Well, pipeline makes that the market is now normal. The market is now reasonable. If you have good products, you sell. If you're well positioned, you sell. If you have -- you don't have the right products, you don't sell and you have to sell discounts.

So basically, we have a lot of opportunities coming up. The opportunities that were impossible for us to -- we could not afford to [indiscernible] our money, to buy what we've been offered. Now it's very interesting. And one of the discussions that we had on the Board today is I'm preparing a portfolio of options for the shareholders to verify in the next Board meeting that will take place in January because I do strongly believe that '25 will be a year where Ferretti Group will play an important role.

Now on the -- I don't know if I answered everything you asked. Pricing, I told you. Pricing, again, is it effective? Of course. If somebody is given 1 boat for free, and you're trying to hold the value of your one, you have to convince the client that you're selling something different than what the others are selling. And again, there's a resale value that remains because of the brand. There's a serious financial position of the company that enables you to make sure that in '27, '26 '28, '29, you're able to get the boat without surprises. And some surprises in the market may happen, definitely not in our home.

But more important, what you're -- it takes more time to secure the contract. That's another thing that drives me crazy about the quarter results. If you have to buy a villa that cost you EUR 30 million, EUR 40 million, EUR 20 million, you're not sure that you're going to go to the public notary in order to sign the bill of sale on the 29th or the 30th of September. You may end up doing everything because the notary is not ready on the beginning of October, or you may end up deciding that whether you want to change 1, 2, 3 things or my lawyer takes more time than everything.

This is what we're selling here. We're not selling bags, respectfully. We're not selling shoes. We're not even selling cars. We are selling homes. We're selling properties. We are selling estates when you go above EUR 100 million. And that -- it is the nature of our industry, especially in Ferretti Group. There's nothing we can do. We have to take a picture at the end of September. That picture 1 day later is old. Now that picture has aged, belong to prehistoric age. Age of stone age. The picture of today is a completely different picture, and I'm trying to tell you exactly what we are leaving here from the front line.

So it's a leopard skin market. You have to be good. You have to be there in the good areas with a good product in the good positioning of the segments, which are less affected, but everything which is obvious in luxury today that the world has changed.

Now fantastic. So what? And again, Ferretti Group, and that enables me -- sorry if there's any other questions, I don't want to take time for other questions. Sorry. No, I just concluded. Waiting for the other questions.

[Operator]

We will move now to the written question. The first question is from Niccolò Storer from Kepler. How much of the order taken in Q4 to date is shift from Q3? And how much you would have taken in Q4 anyways? And the second question is, any fears of tariffs on smaller yacht in particular, I guess, from the United States?

[Alberto Galassi, executive]

Okay. Can you explain the meaning of shift?

[Operator]

So if it's a normal Q4 order -- that's due to 1 week, 10 days time moved.

[Alberto Galassi, executive]

Well definitely, a combination of the 2. In some, of course, the negotiations of important orders don't start in a day. Rome wasn't built in a day. You don't sell Super Yachts and Made-to-Measure again in states in a day or in a week. So that's with a shift for sure. But also, there is some feedback coming from the market, which are honestly positive compared to the frozen scenario that we had in the states before the election. That's a fact.

And the second one is?

[Operator]

Any fear of tariffs on smaller yachts?

[Alberto Galassi, executive]

No. Definitely not for 2 reasons. First of all, there's not an industry in America manufacturing boats big enough to justify the introduction of this kind of tariffs. Again, this no domestic, I would say, industry or lobby of industrialists to be protected by [indiscernible] administration, it never happened. It's more -- I would say that in different scenarios, in different areas, in different industries, I don't see this in the yachting industry.

[Operator]

The next question is from Anna Frontani from Berenberg. Any comments on the Italian press speculation reporting and interest of [indiscernible] for Riva brand?

[Alberto Galassi, executive]

We don't comment on gossip and the management is not entitled to make any comment on anything on equity.

[Operator]

The third question is from [ Alvira Meida of BV. ] Any update on the buyback?

[Alberto Galassi, executive]

Well, yes. There's a current update. It's constantly going on and going on. The discussion is going on. It's never been laid off. It's never been out. It's something that will absolutely happen, will happen 100%. So the process is on. Let's make it happen and unfold it behind the clouds. I'm the first one that wants that to happen also because we would like to have an [ MAP ], the [ MAP ] implies a stock option plan. It's been promised, this discussion which is going on. The shareholders never gave up to that. We are now talking to adviser in order to implement the best one than the proper one. The same implemented it in the other controlled company, of which, which is [indiscernible] in Germany, a listed company in the Frankfurt Stock Exchange. And without buyback, there's not going to be an [ MAP ] for the management because there are not going to be shares available. So at the end of the day, yes. It's going on, and it takes time, but it will come.

[Operator]

Another question from [ Mr. Nicolas Panoli. ] If we see -- if the incentive coming from the Chinese government will have any impact on our business there?

[Alberto Galassi, executive]

I really wish. I had the discussion with the Chairman yesterday on this. They believe that stimulus, it could be very helpful. Again, we are #1 brand over there. It's -- we've been there since I don't know when. In Hong Kong, but also Mainland China in Shenzhen. If you go to see the marine of Shenzhen, you'll be surprised. -- sorry. First of all, how beautiful it is. And secondly, how many boats also for 20, 30 meters Ferretti Group we have there. We have Wallys, we have Ferretti, we have Rivas, we have Pershing, we have everything there.

I wish because I can't see Asia Pacific so low. And to be honest, there must be an upside coming up very soon because I think China is big enough to make it happen. And also the new relationship with this administration could be a surprise. Let's see.

[Operator]

We have another question from [ Wendy from CICC. ] Any other shareholder return plan this year or next year? I don't know exactly when the -- what you mean. Could you maybe rewrite the question?

I will read the other question in the meantime from Mr. [indiscernible]. He's asking if with this new order intake announced after the end of Q3, if we can clarify any seasonality on the order intake?

So we said it's -- if I understood correctly, this is an all-time high backlog, but he was probably asking compared to the beginning of Q4 of previous year, is this normal? Is this something we see every season? Or is this something one-off?

[Alberto Galassi, executive]

Okay. If you have a record-breaking order intake, it's not normal. It means that you succeeded in promoting products where you had to fight hardly with competitors and fiercely competitors from Northern Europe and from Italy as well because, respectfully, in Italy, we do the best boats in the world. Again, it says it's a trend. It says that there is still a market in our industry, in high end, well-positioned luxury brands.

So some years ago, we had important quarter. But again, this year, to be honest, and proudly, I have to tell you that we've been positively surprised that we were able to harvest what we've been seeing for months and months and months, and we are convinced that we are on the right path. That's why we believe '25, '26 and '27 and '28 will be good years for some segments for sure. And if just America wakes up in terms of being normal, not extraordinary, normal, we can have collectively, as an industry, but definitely as Ferretti Group, an upside.

[Operator]

Thank you, Mr. Galassi. We don't have any more questions. So this concludes Ferretti Group 9 Months 2024 Business Update. On behalf of the management team, we would like to thank you for joining.

[Alberto Galassi, executive]

[Foreign Language] Have a good day. Thank you for your attention.