Polaris Inc

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Good day, and thank you for standing by. Welcome to the Ferrari 2024 Full Year Results Conference Call. [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, Nicoletta Russo, Head of Investor Relations. Please go ahead.

Thank you, Sandra, and welcome to everyone who is joining us.

Today, we plan to cover the group's full year 2024 operating results and 2025 guidance 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 Group's 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.

Thank you, Nicoletta, and good morning and afternoon, everyone.

'24 has been another remarkable year for Ferrari, full of milestones, unforgettable memories and the continued growth of our brand across each of its 3 souls: racing, sports car and lifestyle. Over the last years, we successfully continued to execute our business plan. We did significant progress in both the development of our infrastructure and our product offering.

On infrastructure, the e-building inaugurated last June is up and running, and we also accelerated the construction of the new paint shop for additional personalization. On product offering, we are fully in line with our business plan. We launched the 3 models in 2024. Our supercar F80 and the 2 [ Cilindri ] Coupe and Spyder. Our new supercar perfectly embodies our relentless will to progress, and it showcases the significant technology transfer from our racing experience to our sports cars.

Indeed, the F80 is equipped with our most powerful engine, a V6 hybrid powertrain directly derived from the 499P that won in Le Mans for 2 consecutive years. The F80 will be produced in a limited series of 799 examples, already fully allocated to our collectors, and it represents the eighth model launches out of the 15 we promised to all of you at the 2022 Capital Market Day. But F80 is not only the pinnacle of our innovation. It also represents a major advancement in our electrification journey.

Now we can claim that our battery models, our electric axles, our inverters and electric engines are developed and crafted in Maranello, as we told you a couple of years ago. The internalization of this know-how represents a big step forward. All of this is done in our new e-building, a state-of-the-art infrastructure that grants us further production flexibility, and flexibility is more crucial than ever in today's current context and is made even more achievable, thanks to the strong relations we have with our suppliers.

2024 has seen excellent financial results with record full year figures across all metrics. Revenues. Revenues at approximately EUR 6.7 billion, with double-digit growth versus the previous year. Double-digit growth in profitability, supported by an extraordinary demand for personalization and favorable product mix with a net profit reaching EUR 1.5 billion. And then industrial free cash flow. Industrial free cash flow generation surpassing the EUR 1 billion threshold for the first time. Everything I've mentioned so far, including the record financial results has been made possible, thanks to the passion, the dedication of all my colleagues, the loyalty of our clients and the steadfast support from our partners, [ Gratzia ] to all.

The strength of our business is also confirmed by the order book on current models, which is evolving as expected and covers the entire '26 with the [ 12 ] Cilindri Coupe Spider guiding the order intake. Residual values remain sound with different dynamics throughout the region and models. Clearly, we are closely monitoring their trends. And in this respect, on one side, we continue to devise allocation strategy, and on the other side, we continue to devise even more exclusive Ferrari experiences to further engage our clients.

This experiences span from racing days to test drives from regional [ premieres ] to exclusive driving events. This year, we also brought together our 3 souls: Racing, sports car and lifestyle in a series of unforgettable event in Miami during the Grand Prix. Why all of this. Because owning a Ferrari is much more than just owning a car. It's about being part of an exclusive community, united by shared passion. The loyalty of our clients is testified once again by a few interesting data. In 2024, we sold approximately 81% of our new cars to existing Ferrari clients and 48% to clients who currently own more than 1 Ferrari. The passion is also shared by our wider community and is testified by museum's visitors, which is a new record in 2024, more than 850,000 visitors came in [ Maranello ] and in [ Modena ] in our museums.

And now let's move forward. What to expect for this year for 2025. In racing, we compete at the top in both Formula 1 and Endurance Championship. We reinforced the team in the clear [ winning ]. In sports cars, we will further enrich our product offering with 6 new model launches. Don't ask me anything about the electricas, the Ferrari model that we will announce in a unique, innovative way, and this will happen in Q4.

And throughout the years, we will continue to enhance our client experiences and accelerate the development of our passion. And in lifestyle, 2025 will be a year of progress with an array of activities designed to build scale and expand our visibility. All of this is an investment with the ultimate goal being to continue to nurture and elevate our brand.

Among our priorities, we will continue to focus on our carbon neutrality goal by 2030. Further progress were made in 2024 with the shutdown of our highly efficient regeneration plant, several months ahead of our initial projections of last Capital Market Day. Since September '24, we are no longer barring methane gas for electricity production and relying increasingly on renewable sources. Thus, in 2025, we expect to reduce by approximately a factor 3, our Scope 1, Scope 2 emissions compared to the 2021 base year.

This, again, was made possible thanks to the commitment and dedication of all our colleagues, all Ferrari people. And to reward their achievement in line with the company's strong performance indicators, I'm pleased to announce the yearly competitive award of up to approximately EUR 14,400 for our employees as well as the confirmation of the Global Equal Salary certification and the newly achieved Italian certification on gender equality. We remain constantly looking forward and beyond.

And before I leave the stage to Antonio, I would like to underline 3 things about this year: one, 2025 will be another step forward in the execution of our business plan, allowing us to look to the future with strongest confidence since we are even better positioned compared to our initial trajectory. Two, we look ahead with the united, focused and well-grounded team, ready to embrace the future with enthusiasm and exciting challenges that lie ahead of us. Three, 2025 will also be a great occasion to come together here in Maranello on October 9 for the launch of the Ferrari full electric and to share with you what we envision for our future.

And now, I leave Antonio for financial results and the guidance for this year. Thank you.

[Foreign Language] and good morning or afternoon to everyone joining us today. I start on Page 8 with a quick overview of the highlights of the full year. 2024 has been a very strong year with all metrics exceeding our expectations and reaching remarkable results. I stand with Benedetto in congratulating the team on their outstanding performance and exceptional work.

Revenues and profitability grew double digits, and this with shipments only slightly higher than last year. Product mix and personalizations continue to strengthen. This was combined with a favorable country mix and resulted in an EBITDA margin of 38.3% despite continued inflationary pressure, higher [ racing ] expenses and brand investments. Further leverage on the D&A in line with the phase-out of several models, enabled us to expand the EBIT margin to 28.3%.

Let me also highlight the net profit that reached EUR 1.5 billion and corresponded to a diluted EPS of EUR 8.46, up 22.6% versus the prior year. Such an improvement encompassed nil financial charges and a tax rate of 19.2%, supported by the temporary coexistence of 2 patent box regimes. The industrial free cash flow generation was very strong and above EUR 1 billion for the first time. This achievement is even more remarkable if we consider that in 2024, our capital expenditure peaked at around EUR 990 million.

On Page 9, we analyze our shipments for 2024, which increased by 89 units. We had significant changes in our portfolio throughout the year. The shipments of the Purosangue, Roma Spider and 296 GTS grew compared to the prior year as well as those of the Daytona SP3. We commenced deliveries of the SF90 XX family and the [ 12 ] Cilindri in line with our plans.

On the other side, 5 models phased out Portofino M, SF90 Stradale, 812 GTS, 812 Competizione and Roma. The hybrid share reached 51%, in line with product plans and was mainly driven by the 296 GTS. As customary, the geographic breakdown reflects the different product cycles as well as the company allocation strategy adopted to [ Brazil ] and exclusivity. As a result, EMEA and Americas were up versus the prior year, representing close to 75% of our total shipments. Rest of APAC was almost flat at 17% and Mainland China, Hong Kong and Taiwan reduced their share to 9% in line with our long-term ambition for this region.

On Page 10, you can see the net revenue bridge, which shows a 13.4% growth versus the prior year at constant currency. The increase in car and spare parts was driven by the richer product and country mix as well as higher personalization. Personalizations continue to strengthen and exceeded once again our expectations, reaching approximately 20% of total revenues from cars and spare parts, mainly supported by the Purosangue and the Daytona SP3.

Sponsorship, commercial and brand increased, thanks to the new sponsorship for our racing activities, among which HP as a new title sponsor of Scuderia Ferrari as well as higher contribution from lifestyle activities. Currencies, net of hedges in place had a negative net impact in the year.

Moving to Page 11. The change in adjusted EBIT is explained by the following variances. Mix and price strongly positive, thanks to the enriched product mix, sustained by the deliveries of Daytona and the 13 units of the 499P Modificata. The increased contribution from personalization and a positive country mix supported by the Americas.

Higher industrial and R&D expenses, partially driven by raising and innovation activities. And then SG&A increase, reflecting the continuous initiatives in software and digital infrastructure, organizational development as well as brand investments. Other was strongly positive, thanks to new sponsorship and lifestyle activities, partially offset by higher costs due to the better 2024 Formula 1 season ranking. Lastly, even in this case, we had a negative net impact from currency. The EBITDA margin was 38.3%, while the EBIT margin reached 28.3% and benefited from the already mentioned flat SG&A.

Turning to Page 12. Our industrial free cash flow generation for the year was EUR 1.027 billion. The tailwind from the strong increase in profitability was partially offset by a negative contribution from net working capital, provisions and others, albeit it improved versus 2023, primarily driven by an increase in inventory value, mainly due to a product mix and higher trade receivables, higher tax payments and capital expenditures of EUR 989 million, a peak within the current business plan, in line with the advancements in product development and the accelerated spending on the new paint shop.

I'd like to highlight that an amount of more than EUR 1 billion, very close to the industrial free cash flow generation was also returned to our shareholders through a combination of dividends and share repurchases throughout the year.

Finally, the net industrial debt was EUR 180 million at the end of December 2024. Let's move to Page 13, where we present our targets as well as the drivers for 2025. Please note that this target sets the floor we aim to achieve. On sports cars, product and country mix will continue to be positive improving from an already reached 2024 baseline. While the contribution of the Daytona is expected to gradually decrease over the year, -- the mix will be supported by special series and range models, along with few initial deliveries of the F80 towards its end.

Personalizations are expected to grow in absolute terms, though stable around 20% of cars and spare parts revenues. Racing revenues from sponsors and the commercial right holder are expected to grow, thanks to the new sponsorship already signed, the full contribution of Title Partner HP and the better ranking achieved in Formula 1 in 2024 compared to 2023.

Lifestyle activities will continue to increase their support to the top line, accelerating their growth rate while investing a larger share of resources to speed up the pace of development and the expansion of the retained network. Continuous brand investment, higher racing and digital transformation expenses as well as higher costs implied by the ongoing supply chain challenges allow us to develop our activities, resulting in a gradual progression of our percentage margins.

Given the above, the first half of 2025 is expected to be stronger than the second half, in line with the development of the product mix. As to the bottom line, we estimate the effective tax rate to be higher at around 22.5% as we keep on benefiting from the new patent box regime, while the previous one has come to an end. The industrial free cash flow generation will be sustained by our profitability, partially offset by a still negative change in working capital with deposits from clients, partly offset by the reversal of previous year's advances, tax payments proportional to the development of our income and CapEx of approximately EUR 900 million, substantially lower than last year.

The underlying assumption on the U.S. dollar exchange rate is that it will fluctuate around 1.05 that would be rather neutral compared to 2024, including hedges. And please note that what I've just mentioned relies on the assumption that applicable custom duties stay unchanged.

To sum up, today's very strong set of results marked another significant step in our growth trajectory, which we aim at continuing 2025. Despite the ongoing uncertainty in global scenario, our unique business model gives us strong visibility, flexibility and confidence in our future. And we look forward to sharing our long term vision and strategy at our Capital Market Day on the 9th.

[Operator Instructions] we will now take the first question from the line of Susy Tibaldi from UBS.

I have 2. The first one, regarding your model rollout, 6 new models in 2025. I was wondering, so you are anticipating your guidance by 1 year. Is that purely on the financial side or also operationally. Because if you add 6 models, you get to 14, and you were going to launch 15 by 2026. So it would imply only 1 in '26. So on clarification on that?

And linked to that, do you have any concern that maybe you're launching too many in the sense in 1 year because is it not confusing maybe for the customer if we suddenly get so many new models in terms of positioning. And -- is your focus then in 2026 on reaching new customers again or still to focus on existing customers. So that will be the first question.

And then the second question -- how -- can you explain how exactly your mix flows through to your P&L? And the reason I'm asking is that in 2023, we saw obviously a big jump in your EBITDA margin, helped by the very strong mix. But arguably, in 2024, your mix was also -- almost equally as good. but the profit improvement was significantly smaller. So can you give us some clarity on what are really the key drivers of your margin expansion that we should focus on going forward?

Okay. Susy, thank you. I'll take the first one, and then Antonio will go through the mix. So number one, we are always pushing for new clients, okay? And this is true either for, let's say, thermal cars, ICE or for hybrid cars. You may notice that in 2024 is the first year if you wanted -- where we had 51% of our car were hybrid.

So we are taking care of the collectors, of the rebidders, but also the new client. The second, the doubt that you had about too many models and confusion. Well, we are talking about different kinds of cars. There are cars that are special versions that are limited. There are cars -- you may remember that we are doing 2 kind of car, 1 more for pilots, okay, and 1 for sports car drivers.

So they are clearly positioned and according to different kind of clients we have. Consider that since the beginning, we said we want -- we are pushing a strategic -- a horizontal strategy in terms of, let me say, model we propose. We don't want to do a few model with a lot of volumes because we believe this is a little bit against the desirability and could not -- it's not compliant with our strategy to become and to be always to become more and more luxury brand.

So we said 15, you did well the math where we reach 14. There is something else left for next year. Next year, we'll update what we are planning to do for the end of decade in October. So we are talking about new clients, existing clients, so this is the picture. For the mix, I would like Antonio.

When we speak about the mix, we are referring to product mix, including the special series, and the strictly limited cars in volume, meaning the Icona for the time being and the F80, the supercar, then the country mix. And finally, the contribution of personalization and pricing overall.

So what we have been going through in the last couple of years has been an increasing contribution by all of these categories. As far as product mix is concerned, clearly, we reached a new baseline this year with a full deployment of the deliveries of the Daytona throughout the entire year, which in '25 is not as strong as in 2020 -- sorry, '25 is not as strong as in 2024 because the Daytona will come to its end by the end of the third quarter.

Then the country mix is also relevant since we have flagged a number of times now that [ all ] the countries are adding the same in terms of contribution margin. And in this respect, the fact that we're moving the majority of our deliveries to North America and Europe as compared to the previous situation where China was more relevant. The third one is pricing.

Pricing has been particularly visible in 2023. And in 2024, to a lesser extent, since it has been mostly offset by the increase in costs that we have been registering. And in 2025, will be very, very limited and mostly related to some models in some specific countries or some components of our revenues related to the cars, but not entirely affecting the model price.

Finally, personalization. Personalization has been the real big new contributor to our P&L. It has been going through a progressive increase in weight from 18% before 2022 to 19% and 19.5%, 23%, 24% and now 20%. So that's the real element of news that has been surprising and positively throughout this year. And we expect this to continue in 2025, as I mentioned before. Does it help?

Yes, it does. I guess, a lot of these factors that you mentioned on the positive side of tailwinds. Well, I mean, they were there in 2024, right, as well as '23. Just the magnitude of the profitability improvement '23 versus '24 was very different. But I suppose that you answered that by mentioning the cost inflation, the underlying inflation, which was not offset by pricing to some extent in 2024.

Correct.

We will now take the next question from the line of Stephen Reitman from Bernstein.

I had a question on pricing first. I took note of your comments that pricing will not have a significant impact in 2025. But I want to focus apart from on the specific models. And one I want to focus on is the Purosangue. I understand that is actually having some quite significant price increases from the beginning of 2025. Could you confirm. And secondly, could you talk about also about the 12 cylinder in terms of how you're seeing the customer profile on that vehicle, is it attracting new customers? Or is it actually going a lot again to your collectors and people who have more than one Ferrari already?

Thank you, Stephen for this question. One, the pricing, thanks, because you're right, January 1 this year, there is a price increase on Purosangue. This was already planned. It was already communicated to you. So there is -- when we said no pricing increase, we said no new price increase, but the price increase of Purosangue is planned and is there, okay? So I appreciate it.

When it comes to the 12 Cilindri, well, we are having good traction on Coupe and Spiders. I would say today that the order intake, the order intake is more or less 50-50 on the 2 models. And there is also a strong trend from new clients, prospective [ mono ] buyers. I would say that 45% in is, let me say -- sorry, 40, 45 years is the average age of the new client. And how many are the new client percentage-wise, we are talking around something in the range of 20%. So that's very interesting. Also, I want to share with you the age, that is pretty interesting because we see, and I have in mind several of them, young people as well as new clients that are particularly interested on the [ 12 cilindri ].

If I could also ask you just, have you got any updates on the kind of warranty program you've been offering on the battery that you told us about last year, particularly in terms of improving -- guaranteeing the sort of longevity or the usefulness of the battery in the plug-in hybrids. And obviously, you'll do something similar on the BEV.

Another interesting question, Stephen. Yes. We launched this warranty in -- basically in September. So in the last 4 months, we see around 350 people that are buying our additional insurance for a peace of mind. We have different kind of considers for everyone that this is a warranty that is touching only the hybrid car because we're talking about high-voltage battery. So we are talking about, as I said, a 350 contracts signed more or less in 4 months. And the reason why they like it is because this is providing them a peace of mind because there is no problem, let me say, in the expiration date of the chemistry of the cell of the batteries. So it is having good traction, and we will keep monitoring it.

We will now take the next question from the line of Michael Binetti from Evercore ISI.

Congrats on a great end to the year. I'll add my congrats there. Just a quick one. Would you mind telling us how many Daytona shipped in fourth quarter? And then I wanted to kind of ask you about the shape of that a little bit.

Antonio?

Just a second.

Well, in the meantime, if you may ask something else, I'm going to retrieve the information.

Okay, if I -- I mean if we assume the Daytona...

Sorry. The number of Daytona is 46. One every 2 weeks.

Yes, in I [ didn't mind ] yet. So 46, I think, if we exclude the Daytonas, probably the rest of the fleet, the ASP or the car revenues per unit were probably up low double digits, maybe 10%. Is that -- I was interested in your comment, Antonio, that the first half will be stronger than the second half.

I think that's a little bit counterintuitive to how we were thinking about it. It seems like the ASPs on the rest of the fleet besides Daytonas were up pretty strongly. Is that something we should continue -- we should expect to continue in the first half, and that's what's driving your comment that first half will be higher.

And then, I guess, separately, is there any way you could contextualize how many F80s you'll ship in the fourth quarter here? I know it's the first quarter, and it will be ramping up, but it seems like when you say the first half is stronger in the second half, it will be very few F80s in the fourth quarter. Is that the right way to think about it?

Listen, I would model it this way. You should assume that the Daytona are slightly lower every single quarter from Q1 to Q3. They're going to be down to nil in Q4. And then the swap between the XX, the SF 90 XX, Coupe and Spyder with the 812 Competizione is going to grow in the second, it's going to be positive and provide an accretion from Q3 onwards, but not offsetting the negative from losing the Daytona. And the F80 is kicking in, in the last quarter, but just a few units. That explains widely the strength of the first half compared to the second.

Okay. Okay. And then if I could just follow up, Benedetto. As you see concerns about residual values of hybrids around the world across brands dropping a little bit as you guys are on the eve of launching your first EV. Does that change your view of what the Ferrari full electric customer will value the most as you're seeing differences in how consumers more broadly think about those cars going forward?

Thank you for the question, Mike. I think that I'd like to say in this way. There are electric cars and electric cars. I think that we -- since the beginning, let's say, when we announced our strategy in June 2022, we had clear in mind that when you do something -- when you use a new technology, you make in a unique way. And that's what we are doing. And we are looking at all the dimension, as we said at that time.

I don't want to comment on the reason why other electric car may be accepted or not. What I can tell you that our electric cars, as we said, will be unique in the sense that we are looking at the different dimensions, the style, the performance and the driving trails. And we are looking at all the dimensions that are below that are sustaining the driving trails. So if you want to know more details, you have to come here to [ Tortelin ] and to see the electric car in October.

We will now take next question from the line of Monica Bosio from Intesa Sanpaolo.

I hope you can hear me. I have 3 questions. One is for Benedetto, it's on the order book in China. I remind that in occasion of the third quarter, you said that your order book in China was at around 5 quarters. I'm just wondering how is the situation now? And if you are willing to change a little bit the strategy also on the back of the tariff environment.

In this context, I'm also wondering if we can expect some acceleration in deliveries towards Americas in the very first part of the year. Then the second question is on the residual values. That's something that has to do also with the 7 years warranty on the batteries. Can you give us just an update on the residual value trend on the hybrid model? And the very third question is on the R&D for the current year, if you can share with us some indication, Antonio.

Thank you, Monica. So one, order book in China, you remember, well, we said the 5 quarters, and we state today 5 quarters. And we do not intend to do any acceleration of sales through U.S. or wherever, because of duties or what. So we go ahead with our plans without an acceleration. Two, residual values. Residual values, there is -- the trend of residual values is different, different from the different regions and different models. What we are doing is that where there are some countries like U.K., for example, where we are limiting the shipment of the cars and where we see that the warranty that Stephen was asking about is being used. So this is the first 2 questions. For R&D?

On R&D, Monica, it's going to be around 8% of revenues, pretty much in line with 2024. So not a big change there.

Okay. If I may, just a follow-up, it's just a housekeeping question. The first half will be stronger than the second half, the price mix will change between the first and the second part of the year. I can imagine that volumes will keep low double digit. Can I imagine a different trend in volumes between the first and the second part of the year or should be more or less as the previous year?

Thank you, Monica. Pretty much equally distributed in terms of volume. And in terms of the main driver for H1 being stronger than H2, I just mentioned. So I don't think there is any anything significant to flag.

We will now take the next question from the line of Anthony Dick from ODDO BHF.

A couple on my side. The first is on the D&A. It seems -- your guidance seems to suggest that D&A will be lower in 2025 versus 2024. So could you maybe confirm this or not and explain kind of the reasons behind that? I think you mentioned some model phaseouts having an impact on D&A. So just wondering if that was also expected this year?

And then my second question is on the F80. So you mentioned in the presentation that it's been fully allocated, but there's also been various reports saying that there's been some cancellations from clients on the cars. And maybe could you address that question, confirm whether or not there have been some cancellations and just whether you've just been able to replace these cancellations or -- and maybe where the order book stands for the F80.

Thank you, Anthony. I take the second one. The D&A, Antonio will guide you, and thanks also for this question. Another interesting one because it's also true that on Internet, you may read whatever you want. We rely on the contract that our clients are signing. And also, if you want, allow me to say that there are more people than the 799 cars that we are aiming to do. So unfortunately, we cannot show you the contract, but I think you've seen also, after a blog was popped up, I think, was when was it, mid-January. Because I remember I was on the phone with Nicoletta, there has been a correction and the blog itself has been correcting the news. You know what?

What I can tell you instead to disclose, let's say, something that we cannot. I would like to tell you that the order intake on the supercars has been faster than the order intake on the 2 previous Iconas. So I would not -- it's not relevant this news, what you read on Internet. The second one...

With respect to the D&A, I mentioned that in 2024, the overall level of D&A was substantially flat. We moved quite, I mean, a few millions. When we look at 2025, this is driven by the model phase-in, phase-out. We start having D&A from the start of production of the new models. So what is implicit in our guidance follows the fact that some of the models we currently have are going to be phased out and new ones will kick in. There is a little else to comment very honestly in this. In addition, we have the impact of the new e-building that has started its production in the end of 2024 and this is it.

Okay. So could you maybe just clarify what are your expectations for D&A in 2025?

The difference between the 650.

We will now take the next question from the line of Henning Cosman from Barclays.

The first one is really on pricing power ultimately. We have this very stubborn residual value debate. So I was just thinking, could you maybe reassure us a little bit, you're having these 6 launches in 2025. Could you just reassure us a bit about your expected ability to take these markups versus predecessor. [ Dutch Chile ] was obviously quite successful in terms of how you priced it and I suppose how you anticipated the demand. And I think it would be helpful if you could maybe reassure us a little bit that you think you'll still be able to execute good pricing power as you're looking at these 6 launches in 2025. Just looking for a bit of color there. And the second question would be, again, in the direction of the hybrids. You've obviously indicated...

Sorry, the second is in direction of hybrids, what you said?

That's right. On the direction of the plug-in hybrids. You've obviously given us in the industrial plan an indication of the number of models you were going to do in terms of hybrids, right? So I'm just wondering if there's anything at all that would make you revisit the plan as to how many of your models would be plug-in hybrids in the context of perhaps there's a little bit more muted reception on part of your customers more in favor of combustion engines.

Thank you. Sorry, the line was a little bit disturbed. But I'll start from the second one, and we confirm the plan that we had in mind 2 years ago. We said, let's say, we were -- 3 years ago, sorry, in '22. We said that we were having, let's say, the hybrid, the terminal and electric. So we are executing our plan according to our initial product plan. There is no change over there.

Considering the story of pricing power, I would like to say in this way, we have a lot of launches this year because this is what we were planning to do since time 0 because in light of respecting the clients, different clients, there are clients that are aiming to have pilot cars, there are client that have sport car cars. So we want to offer all of them a new selection of product so that we stay coherent with our strategy that was different Ferrari for different Ferrarista and different Ferrari for different moments.

So we confirm our product strategy and our marketing strategy as shared 2.5 years ago.

And we can expect the typical pattern of markups versus predecessor, right? We shouldn't think that there's going to be any deviation from the recent trend where you're able to take good markups versus predecessor, price increase was...

I don't want to -- I wouldn't like to comment about the features of the new cars, either technical -- from a technical point of view or a pricing point of view. Let's make them -- you will see, we will start to roll out. I mean you can make up your model. We will start pretty soon, let' say, and then you will see what we have in the pipe. So you have to be a little bit patient, Henning.

Sorry, if I can just squeeze our final one on the topic of pricing. So you said you're not accelerating your plans in forwarding or front-loading deliveries into the U.S. So can I then assume that you think if there were tariffs that you're quite confident that you fully pass them on as you typically do?

What I can tell you in this direction, one, as I said, we do not accelerate Two, in this game, there are 3 players. There is Ferrari, there are the dealers, there is a client. When the details will be disclosed in terms of timing, in terms of amount, we'll see how to manage properly. Today, there is a lot of things on Internet, on social app, whatever, but there is not yet any fact. So we like to do 2 things. One, we like to do to keep our promise and two, we like to work on fact. When the fact will get out, we'll see how to manage.

Thank you. We will now take the next question from the line of Thomas Besson from Kepler Cheuvreux.

I have 3 questions, please. Firstly, I'd like to come back to the improved average selling prices in Q4 versus Q3. I'd like to give us a bit more detail beyond the increased personalization that you said has been a driver. Could you explain why effectively we saw a clear increase. Is it linked to the higher share of hybrid in Q4.

Then I'd like to ask a second question about what you anticipate for the hybrid share in your volumes in 2025. I know it's probably a bit difficult to answer this because you don't want to tell us too much about the 6 new models, but you think it will increase further? Or do you think we're going to see a stabilization of hybrids? And then I have...

Sorry, sorry, on Sorry, the second question, you think it will increase.

I'm asking if we're going to see a plateau in hybrid share in 2025 or it will increase further. And then I have a last long-term question. You're going to be launching the most expensive product ever with the F80, 4 units at the end of the year. We can assume, therefore, you will have very, very strong '26, '27 average selling prices. Can you tell us just 1 where the post F80 plan to be able to offset the departure of that car in '28 or '29, please.

Okay. To see what will happen in '28, '29, you will come here in October. You will see we will disclose -- if we tell you everything now, we don't come anymore here, yes. So for sure, I mean, we have a plan that will discuss with you and all the colleagues in the call. And I mean there is a plan that is supporting our ambition. We shared with you what we were going to do in this time. And let's say, we did, we executed what we committed to execute. In terms of...

Yes, sorry. The second was on the hybrid share for 2025. We expect to be slightly lower compared to 2024 because the delivery exactly of the 12 Cilindri. And in terms of the mix price impact in Q4 compared to Q3, I think it's mostly related to the development of the SF90 XX.

And also some personalization and because they were using -- there was an increased percentage of carbon finished parts. I mean, the carbon finish, as we said also in other conference call is becoming more and more appealing. And as a matter of fact, you may remember, Tom, that we increased also our capability, our -- I mean, our supply chain capability to provide this kind of personalization.

In the last element, there's probably a bit of a country mix, which is also positive in Q4 more than Q3.

We will now take the next question from the last line of George Galliers from Goldman Sachs.

The first question I had was just a bit of a housekeeping question with respect to the number of specials shipped in the fourth quarter. I think if we just do the basic math based off what you showed for Q1, 2 and 3, and then what you showed for the full year, it would imply that the specials were somewhere in the region of 7% to 8% of deliveries. I was wondering if you might be able to confirm that.

The second question I had was just on the depreciation and amortization. Obviously, at around EUR 650 million for this year there is quite a large delta to where the CapEx has been in recent years. Over time, is it fair and logical to expect the D&A to get close to the EUR 900-plus million level of CapEx that we have been seeing? Or does the lifetime assumptions for the D&A mean that, that annual D&A number will always be materially lower than the CapEx has been at these elevated levels.

And then just finally, with respect to the order book, obviously, sold out for the next 2 years, which is phenomenally strong. And that would equate to something in the region of around 28,000 cars. As we think about those orders, what is the average number of orders per customer? Can you give any insights into that?

So the first one, I would reply is 6%. You said a number of special in Q4, 6%. The last one, yes, we are covered until 2026. And you said the orders per client.

Per client, exactly.

We don't have this math. I think -- let me put it this way. The distribution of order for sure is not quotient, it's pretty scattered. This I can tell you. There are -- I can tell you that our client -- what I can tell you is that there are clients that want only one kind of car, the pilot, some clients that want only the 1 for sport car drivers. And other people that are taking both, depends a little bit.

It is -- this kind of average is a little bit meaningless because it depends on the country and also consider that there are also the top VIP clients that are taking our car also in different places. So we don't see this parameter because it's not representative. The second one, the D&A.

CapEx to D&A, I think we discussed it already when we had the Capital Market Day in 2022. And I think we said by the end of 2026, we would expect it to be around 1.2. So it's not 1:1. For the next 5 years, please wait until the next Capital Market Day, and we'll be more specific. Clearly, what we are witnessing in this year is a wave of investment, which is made of a significant addition. The electric that we were talking before. and the infrastructural investment are also reshaping our Maranello plant. Going forward, subject to the development, the definition of the new product plan, there are chances for a reduction and therefore an equalization, a trend towards the equalization.

We will now take the next question from the line of Adam Jonas from Morgan Stanley.

I'm looking forward to the Tortellini as well. It's divine. Benedetto, you mentioned 81% of last year's sales were to existing customers. It was 74% in the prior year. That's a big jump, but I'm curious what drove that, what your long-term natural level is? And just to clarify, within that question, I think you said that sales -- did you say 40%, 4-0 percent of sales were to customers that owned 1 Ferrari already in the garage or was it 14? I couldn't tell if it was 40% or 14%. And then I have a follow-up.

4-0. Sorry for me. Thank you.

That makes more sense. No, it's me. It's my American ears.

No, no, it's okay. It's always good to learn. No problem. I don't. Thanks.

Yes, on 81%, just curious a little color around that. It's a big jump, and I don't know if that was -- if that could go higher, like your order book based on what you see, would that remain around 81% or rise? Or is that a high watermark?

I think, Adam, there are -- just consider the case of 12 Cilindri. The 12 Cilindri is a car that is ICE, the 12 cilindri, you have 20% of the client that are new. So -- and also consider the average age is also around 45 years. The graph, if you take 12 cilindri, Coupe Spiders, yes, the Coupe to be precise, average age is 45 years. And the Spider is 44.4 years. So it's easy to remember, 3, 4. So allow me to say -- if I go to compare this also with the average age of the hybrid cars, more or less is the same for the new client -- for the new client. And in terms of another data point can be interesting, if I go to see the new client percentage-wise, the order from new clients is in the same ballpark.

All right. That would suggest stability there. Just my follow-up on the personalization, just another angle, you had acknowledged again some of the residual weakness in recent periods was maybe a little bit of over personalization or different combinations that may not have achieved the same residual value retention in the secondhand market. And I'm wondering, even though you've guided clearly on personalization level remaining around 20% or more flat year-on-year, has your team made any changes to the character or the type of personalization. You mentioned carbon fiber.

But in addition to that, that you would make available to your clients or somehow disincentivize so that you don't have the rainbow-colored paint with the brown interior, and making sure that it's more in a Ferrari clientele pedigree. Does that make sense? I don't know if there were things you could do to encourage or discourage the type.

Yes. I think I understand what you mean. First of all, a few data points to give you more color because I think this is the last question, so I would like to share a little bit more color with you. So we have the personalization that are most common in our cars. For sure, we have the carbon finish, okay, different kinds of, let's say, accessories or things. Then there are -- there is also the painting -- and then there is when it comes to painting, there are different levers.

Now the question is, you have a client, and I have several in mind that they come here with their idea of personalization and they let them guide by our expertise. So for example, some people are telling, Benedetto. I came to Maranello. I went to New York with an idea, and then your colleague suggested me not to go so extreme or to do some strange. So therefore, some other clients said that they come here and they take what they want. We can advise, but the end of the story, we cannot force them.

So clearly, if there is, allow me to say, if there are some combination, they may not be pleased or liked or loved by the second potential buyers. We have been thinking internally about -- just to tell you, we have been thinking internally maybe to make some predefined combination, well, and just fresh. Last week, we -- the last 2 weeks, there are some places in the world, okay, where they like to have "set menu." The other places where they want a la carte. They don't like set menu, and they want to be free to select what they want. Some people are saying, "Look, I understand I may lose on residual value. But when I drive it, I want to enjoy the way I want, okay?" So it's a choice. You have maybe on your shirt, AJ, I would not say -- I would not appreciate within BV. So -- but -- so we -- I mean, we have to pay attention because we cannot limit. We have to defend the values of the brand, the identity of the brand. No doubt, we will not make a strange car for sure. But if the people like the combination then we cannot say no because we can advise.

Adam, the best way you become our client and you can leave this experience in first person.

We will now take the last question from the line of Tom Narayan from RBC.

Looking forward to October, praying for good weather. So my questions are, first is on this whole residual value thing with that blog which is I guess fake news. One thing that I think can help people understand this better is -- I don't know if you track this, but what is the percentage of your owners that might be looking at their Ferrari as potentially as an asset, maybe as an investor, just asking because the demand of these customers theoretically would be at most risk if residual values come down. That's first one.

Then I noticed on the slides on the 2025 guidance, you mentioned supply chain issues and challenges. Just curious if there's any details there, if that's anything for us to really be worried about or anything. And then lastly, on the e-building. Since we were there last year, it was a big empty room. Just curious, if we look at it today, what would we see that's different? What specific things are you utilizing it for now maybe it is different than what we saw before.

Okay. Start from the last one. If you come here, you will see that out of this building, there are Purosangue and hybrid cars getting out, okay? There are cars that are done and getting out of the doors of that building. If you come here and you go to the -- we say in Italy first floor, in U.S., you say second floor, you have equipment that are managing, let's say, batteries, engine, inverter, axles. So this is about the e-building.

Second, congratulations for spotting out to this point that Antonio was clear. What does it mean, supply chain challenge. It's really simple. There are some suppliers in the automotive industry that because of the lower demand of the big OEM are having some troubles. That's the meaning. So how do we cope with that? Number one, we are dispatching our people best to make sure that we do not stop our production. Number two, we are leveraging the second sourcing option that we have in place. So that's the meaning. It is funny because in the past, we thought that the supplier, depending less on us, if you want, at a more differentiated business, they could be more stronger.

As a matter of fact, today, you have several suppliers in the Western world that are suffering because of over demand of Western world OEM. Then you said, the first one, F80, how many clients, maybe you can comment through the...

Yes. I would make a reference to what you already mentioned a couple of times. We've been going through a statistical analysis of the receivables [ range. ] And the fact that the ranges are in 1 year, around 20% and [ decrease ]. Those are usually appreciating over time. Having said that, it's very difficult -- sorry, just to finish. Having said that, it's very difficult to tell you what is the number of people who look at the car as an asset. I would be tempted to consider that collectors also have an investor's view, but not necessarily all. Most of them are simply passionate about that. And certainly, clients who decide to buy one car only, range car, should consider that it happens simply normally that there is a reduction in value for the car. So that's part of the equation.

Thank you, Tom. Well, I would like before the conclusion of this call, I would like really to thank all of you for the time today but also for the attention you dedicate to us. Thanks for your questions. They helped us, me and Antonio to clarify better. Thanks a lot.

I would like also to thank all the stakeholders because what we said -- what we did the last year and what we are going to do next year -- this year, sorry, it's only because we have a lot of people with great determination and passion. So the 2024 result, the strong 2024 result and the continuing desirability of our brands is that, that is fueling our confidence for the year ahead and also for the future. So having said that, thanks again, and I wish all of you a good morning, good afternoon, good evening, wherever you are on the globe. And meet you in person, 9 October here, and we take care also the weather. It should be better. Worse cannot be. Thank you.

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