Q4 2020 Ferrari NV Earnings Call
[music].
Ladies and gentlemen, thank you for standing by and welcome to the Ferrari 2020 full year results conference call and.
This time, all participants are in a listen only mode. After the speaker presentation. There will be a question and answer session. If you wish to ask a question. Please press star one on your telephone keypad for your information. This conference is being recorded.
Now I would like to hand, the conference over to your speaker today Nicoletta Russo. Please go ahead.
Okay.
Thank you Andrea and welcome to everyone, who is joining us and there are.
Two topics that we plan to call back debate for the group's full year 'twenty 'twenty operating results and then I'll look for the F. 'twenty 'twenty one guidance in light of day, it's the duration of nickel and nickel and is expected to be around 60 minutes today's call will be offset by the groups chairman and acting CEO and he started doing and understand and all our groups CF.
For me and tell you pick up pick on all of our 11th and Lucky Adas and are available in the investors section of the debt already contracted website and.
The presentation and we will be available to answer your questions. Before we begin let me remind you that any forward looking statements, we might make during todays call and subject to the risks and uncertainties and mentioned in the Safe Harbor statement included on page two of today's presentation and the call.
And we'd be governed by this language with that said I'd like to turn the call over to and instead of going out and stuff.
And get out cynical and done.
Good morning, and afternoon tool.
I would like to start thanking all of my colleagues and severity.
For the remarkable results in 'twenty and 'twenty, a testament to the strength of our business model and the resilience of our core business.
In fact.
We exceeded full year guidance on all metrics in 'twenty and 'twenty.
These results had been achieved factoring the impact of COVID-19 on all of our activities.
Environment gave us the opportunity to learn more about our strengths.
And the weaknesses, which allowed us to further fortify our company for the future.
Yeah.
'twenty and 'twenty has also been characterized by the successful digital and ceiling of the Ferrari Portofino and assets 90, Spider and 488 G T Mobi C cap.
Today, we have the most beautiful most innovative and why this product range and our history.
I would like to highlight some of our achievements that we are particularly proud of.
Back on track.
Yeah.
Which is for that is programmed to safeguard the health of our employees and our COVID-19, and secure the environment, which has become a reference and Italy and around the world.
Equal salary certificate in July we were the first Italian company awarded and recognition of the same compensation amongst women and men for equivalent roles and jobs.
Defying our commitment to create and inclusive and diverse working environment.
And social responsibility and helping with different activities. During this pandemic crisis.
I'll just mention a few which we are particularly proud of.
We launched with our clients a fund raising and matching all of their donations to support the medical staff and the health system, those all community and Madden and low and surroundings.
We joined forces with the opinion Institute of Technology to present. Your open source project asked for by five a resolution or a low cost and lightweight pulmonary ventilate zone.
And lastly, during the seven weeks closure of the factory, we did not use and its state aid program and continue to pay full salaries of all of our employees.
'twenty and 'twenty was also a year of.
Celebration.
1000, <unk> growth pre the highest number and formula one ever reached.
Victories and the GT rates sales season.
And we reached over $2 5 million visitors and our esports series.
But.
Our 2020 Formula one results reminded us that a great task doesn't equate to a great president for future.
This painful reality, both for ourselves and our fans is debt from which we must restart with humility.
Focusing on what will make us competitive and ultimately lead to winning.
As we enter into 'twenty and 'twenty, one, which Antonio will give you more details about we continue to work on our product plan for this exciting decade ahead.
Adapting it to a fast evolving environment.
Our journey to carbon neutrality will provide a wide the framework for our future.
We are working on a clear plan, including Formula one to become carbon neutral through actions taken directly and indirectly within this decade.
We are optimistic about the opportunities ahead of us.
And look forward sharing and discussing the future of Ferrari.
For this decade at our capital markets day, and the first half of 'twenty 'twenty two.
Now, let me address the CEO succession.
We have established as a board a search committee.
Which is responsible for a process to identify the right successor to Louis Camilleri.
And we want.
To take the necessary time.
And to find the best possible.
So for our company.
Yeah.
On this note I would like.
To express my most sincere thank you to Louise who is listening on our call today.
For his personal commitment as our CEO since 2018 and as a member of our board.
2015.
His passion for society is and has been limitless under his leadership. The company has further affirmed its position as one of the worlds.
And just companies.
Louis and built a leadership team that is continuing to propel our company forward as a result demonstrate.
And for which I am personally grateful to him and.
And tools.
Colleagues at fifth Avenue.
I now hand over the call to Antonio who will review, our full year, 'twenty and 'twenty results and 'twenty 'twenty one guidance.
Since our strategy remains unchanged and our execution of it is on track. He will also directly manage the Q&A session.
I would like to thank you all.
And pass it over to Antonio.
Thank you and Mr Chairman.
And good morning, or afternoon to everyone who's joining us today.
I start from page six.
You can see D I and I for 'twenty, and 'twenty resource, which.
Which exceeded our latest guide and things as difficult times.
Driven by very strong fourth quarter results.
This was achieved and on the back of the strength of our core business.
Improved formula one revenues.
The cost containment actions deployed during the year and a tailwind from foreign exchange compared to our projections.
Our shipments in 'twenty and 'twenty were 9119 unit.
Approximately 10% for less and priority are in line with our production planning.
Group net revenues were 3 billion and 460 million and Europe down $8, one per cent compared to prior year, driven by lower deliveries as well as low at Formula One and Brian and the revenue.
EBITDA came in at 1 billion and 143 million Euro.
Down 10%.
With a margin of 33 per cent.
It is worth noting that the EBITDA margin and our core business was better and in 2019.
EBIT for.
716 million Euro down 21, nine per fan and embedding IR DNA.
Adjusted net profit was 534 million Euro down 23, five per cent breakfast ranking and team and.
And the resulting in an adjusted diluted EPS of <unk> 88, Europe versus $3 71 of prior year.
The adjusted figure reflected a tax benefit with no cash impact from 'twenty, two and team as a result of the one off box I'll Skip hop off the day Mark book.
Book value in accordance with the Tiger and tax regulation.
Yeah.
And lastly, our free cash flow for the year was 172 million Euro.
What you can see and this chart.
Fundamental dynamics underlying health of our business.
We have recorded strong order intakes since the summer 'twenty 'twenty fueled by the assumed commercial activities and the new product and ratings.
As a result on a yearly basis, we ended up with a net order intake very much in line with 2019, despite their very different and environment.
And the trend continued in January.
The other book is at a record level.
22% versus last year, and covering the entire 'twenty 'twenty, one and beyond.
Should we discount the effect of the production loss due to COVID-19, it would be up nearly 10%.
Cancellations remained well within our average experience and were actually lower demand for and getting team.
And if you'd walk are ordering up well on the back of the growth of pre owned and transaction volume.
Didn't happen and notwithstanding the challenges and thanks for the effectiveness in reshaping the way, we engage with customers through a mix of in person and digital events and digital reveal and more exclusive gathering and disk drives.
Obviously, our low grade lost to our dealers for days, who have been standing and buyouts unabated eating and during the most difficult outburst of the pandemic in their respective countries.
Page seven shows the impact of the COVID-19 pandemic debt, mostly hit the second quarter of 'twenty and 'twenty due to the seven week production suspension and the temporary and Ddos Roger.
The flexibility and adaptability of the Gila and throughout our organization and Brazilian from the order book underpinned a V shaped recovery.
And did our Q4 was a record quarter in terms of volume and net revenue and EBITDA growing double digit versus an already robust for Q4 2000 and team.
Yeah.
Turning to page eight.
You can see the details of the full year, 'twenty and 'twenty shipments down 1012 units.
Following the seven week production suspension and the first half of 'twenty and 'twenty and dealer for temporary closure due to the COVID-19 pandemic.
Partially offset by a gradual production recovery of property 500 units in the second half of the year.
Sales of bulk VA sitting there and it well and we're down 10, 3% and 9% respectively.
During the year, despite the COVID-19 disruption and we manage the delivered the Ferrari Monza Tijuana and XP two as originally scheduled.
<unk> continued the ramp up phase.
Offsetting the special theory or something for 88 pistol family, which was approaching the end of its lifecycle.
The eighth well GTS will deliveries per month, and the second quarter and average global distribution and widen the Ferrari Portofino phase out and the introduction of the Ferrari Portofino and in 2021.
The deliveries of the sub 90, estradiol and factored in Q4, following and industrialization and delays experienced and then sold.
And the same quarter and also the Ferrari Roma deliveries.
And your shipments were affected by our deliberate and geographic allocation based on the different and stages of the lifecycle of our model by region.
As a result, EMEA and rest of APAC, where almost in line with prior year and.
Americas was down $19, 8%, but showed that 14% upturn and Q4, thanks for the ramp up of a 2019 models.
Mainland, China, Hong Kong, and Taiwan, Boston for degrees of 45, 5% and the year, while grew triple digit and Q4.
Thanks for the ramp up upfront and 19 model and easy comparison versus prior year.
As a reminder, with provision at the lead agrees and this region in the first nine months of 2019.
Notwithstanding the challenges of the COVID-19 pandemic, we unveiled three new models in 'twenty and 'twenty, the Ferrari Portofino am except for 90 Spider and the limited edition truck car and for like the eight GT and with if you got that which we lead the market and 2021 and I'm happy to announce that our portfolio will be five day.
And that is to buy three new model its unveiling this year.
Okay.
Turning to page nine and you can see here displayed the walk of our group from net revenues for the full year debt was down eight 9% at constant currency.
Revenue from cars and spare parts were down four one percentage constant currency.
Such for four months reflects the volume decline and there for conservation, partially offset by the positive mix price, mainly thanks to the Ferrari Monza SD Wan and Institute.
First the monetization rate on cars and spare parts.
Revenue was around 18% Y down in absolute terms, given the volume contraction.
Engines revenues were down, 24%, mainly reflecting lower shipments to Maserati and revenues from the rental of engine through other formula One racing games.
Revenue from sponsorship commercial and brand were down 150 million euro significantly impacted by the COVID-19 pandemic, resulting in a short and number of formula one races, and as well as lower in store traffic and museum visitors.
Other revenue was down 19, 3% at cost and currency were mainly impacted by a reduced sports related activities and the cancellation of the Moto GP at the low rate track only partially upset by the first ever Formula One Grand Prix and.
Our peer group.
Currency, including translation and transaction and the impact as well as foreign currency hedges, which played a significant role and the positive contribution of 32 million Euro mainly the U S dollar.
Moving to page 10.
Let me review the change in our EBIT, which was 716 million Euro down 21, 9% or 25, 3% at cost and currency with EBIT margin of 27 per cent.
The negative variance at cost and currency remains mostly the COVID-19 impact on Formula one brand related activities and engine sales.
Actually offset by the resilience of our core business.
More precisely volume drove a negative variance of 126 million euro due to previously mentioned and the reduced deliveries.
Mix price volume was positive for 130 million euro thanks for the Ferrari, Monza, Tijuana, and <unk> and and a richer product mix.
And continued from Q4, despite fewer <unk>.
This was partially offset by the lower contribution from personalization programs.
Kris of shipments and Nicaragua and phase out over the for 88 is the family.
Industrial cost reserves and development cost increased 38 million euro mainly due to higher DNA net of the benefit of technology related incentive recognizing the yard.
This also included the full cost of employees paid days of absence during the COVID-19 production suspension.
SG&A decreased 6 million euro, reflecting significant cost containment actions.
And the offset by Formula one racing activities.
Other decreased 211 million euro due to the pandemic impact from the Formula One racing and lower traffic from vendors and I think the activities as well as engine sales to Maserati.
The total net positive impact of currency was 38 million euro year on year.
Turning to page 11, industrial free cash flow generation for the year was 172 million Euro.
And the positive acceleration was driven by EBITDA, partially offset by investments of 790 million euro to fuel our long term product development, including over 60 million euro from the purchases of tractor for tracks of land contiguous to our facilities and Montenegro.
Net of the impact of higher for a 16 or our capital expenditure for 'twenty and 'twenty, we're realizing over and how our guidance due to a slower spending and cabinets in the last quarter.
We will make up in 2021.
The capitalization ratio was approximately 38% for the year basically in line with 2019.
The adverse working capital impact due primarily to the reversal of those with other demands SB, one and SB through advances received in 2000, and Dean and other product and raw material and paying for it to protect the supply chain in this complex months.
Tax payments and higher than last year, mainly as a result of the patent box mechanics.
Net industrial debt as of the end of the year was 543 million compared to 337 and last year.
During the year and total work of 130 million of share repurchases and before the decision to temporarily suspend the program and.
And 200, and pleasant and Euro disaggregated and dividend.
With respect to the share repurchase program. It's important for you to know that we remain focused on rewarding our shareholders and the board of directors decided the best course of action as the year unfolds.
At the end of 'twenty and 'twenty total available liquidity, including Undrawn credit line for 700 million Euro committed was 2.062 billion Euro which compares with approximately 1 billion and 880 million euros as of September 30th.
As a reminder, and amount of 500 million Europe. We're just for you to reimburse our bonds maturing in January.
Yes.
Moving to page 12, you can see that 2021 guidance, which targets a strong rebound versus plenty plenty.
And with net revenue was around $4 3 billion Euro.
And such target is predicated upon having trading conditions and affected by further restrictions or impact from the pandemic and our cup business.
Revenue from Formula one still discounting they know and uncertainties on the calendar and reflecting on all of our 2020 ranking.
And brand activities and still dealing with the COVID-19 challenges throughout 2021.
Adjusted EBITDA between 1 billion and 450 million Euro and 1 billion 500, and in Europe with approximate percentage marketing margin between $33 seven and 30 for bringing them for now.
<unk> per cent.
Adjusted EBIT between 970 million Euro and 1.020 billion Euro.
Targeting and EBIT margin between $22, six and 23, 7%.
This reflects the higher DNA following the Capex increase of most recent tier besides dimension challenges due to COVID-19.
In addition, we expect operational and marketing expenses to gradually resume.
Adjusted diluted EPS of between four and for 2000 euro per share assuming approximately 20% tax rate.
Industrial free cash flow and there is going to a 350 and 50 million euro our free cash flow would affect higher capex, which you expect to amount to around 800 million euro we'd have liked catch up compared to 2020 as already commented.
Finally, it is worth nothing that the guidance for 2021 and that's on the assumption that the exchange rate will remain in line with the last part of 'twenty 'twenty for our most relevant currencies.
The extraordinary conditions of 'twenty and 'twenty affected all of us and many way what has not changed is our commitment and passion that we live and price every day and Ferrari.
2021 guidance growth is and magazines of our unchanged and ambitions.
We clearly know that there is a lot of focus on 2022.
And the one and the pandemic has clearly affected our plan and.
As disclosed we have for installing some initiatives.
In addition, the pace of introduction of new emissions regulations for all of the work has been accelerating.
To have better clarity on our future. We also need to handle the uncertainties caused by COVID-19 impacting the development of our core business and our Formula one racing and brand related activities, possibly and lasting longer and all these unexpected.
And the other and the inherent strength of our business model and the resilience of our core business.
Through their work and this recent period, which gives us confidence and our ability to tackle challenges and possibly bigger and firm them into growth opportunities.
As our chairman and just said, we are and exciting Takeda AD, which we look forward to sharing and discussing when we meet for our capital market day in 2022.
With that said I started the call other clinical data.
Thank you and Tanya we are now ready to start the Q&A session. As a reminder, it would be managed by Antonio. Thank you and then after you.
Thank you, ladies and gentlemen, if you wish to ask a question. Please press star one on your telephone keypad. If you wish to continue request. Please press the husky.
Our first question comes from the line of Michael Binetti from Credit Suisse. Please go ahead.
Hey, good morning, guys. Thanks for all the detail.
I wanted to ask about the guidance first I suppose.
Okay for 2022 EBITDA.
And that we talked about at the capital markets day.
Had it had implied incremental margins of about of well over 50% relative for 2019 net.
Numbers and then your 2021 guidance implies less and 40% incremental margins versus 2019 I'm wondering.
What do you consider are the components that will leave incremental margin.
'twenty one below that the trajectory that that we knew about.
Thank you Michael.
This would not look that much of 2021 for the trajectory for 2022.
And this pretty much depends on the mix, we assume that the catheter product mix, if we assume that the capital market day and.
<unk> will review there was that expected.
And our significant growth between the two years 2021 as of now he's back on the trajectory we had at the time, we protect the plan of September 18.
Well, let me let me ask you about that I guess for Hugh if I just look at the bridges you just gave us if I just back out the business losses that you've shown us hard numbers for in 2020 $126 million.
Volume and $211 million of loss revenue from farm and aligned calendar activities and brand activity that would put you at one point for 8 billion and EBITDA in 2020.
Which is the midpoint for that you guided us to for 2021, obviously, you'll get some.
You'll get some car business back and I know the general theme of the capital markets Day long term plan was to keep growing the business and evolving the profitability. So I'm just I'm wondering how much I guess the next and so the question is how much conservatism you feel like you need to bake into the 2021 margin guidance today.
I think there is some.
Because 2021.
<unk> is still affected by significant uncertainty.
I mentioned some elements in the slides the PUC.
I cannot be more specific in terms of our minds, but clearly all of our business, including F. One and.
And to some extent to deal with the uncertainty related to the development of it and then.
And then.
And then just one last one I know John mentioned regarding.
Our path to carbon neutrality and <unk>.
And a wide framework I thought that was a very interesting comment, which would you mind elaborating because its a subject of much discussion amongst shareholders could you could you elaborate on what you think are the key high level underpinnings to get there that we should think about as far as how Ferrari thinks about it.
Yeah, I think I can I can speak on a qualitative basis.
Despite the fact that we are focused on the car business. We also have other activities in our coffee business is basically made of the carbon footprint per powder product.
One is very specific per se and.
And brand related activities also have their own feature and so first of all we need to put up with all of that together and be able to compute the carbon footprint for the company.
Companywide basically and.
And then given the size of the footprint, we can put together and mix initially at least.
Actions to tackle the shoe box with various actions and we'd compensation.
As I said the plan is first to achieve and.
And carbon neutrality, sorry, our carbon footprint and certification and then at that point, we'll be probably.
Ready to be more specific as to the actions that we've put in place to achieve what our chairman just mentioned the goal to become company and put us within the decade.
Okay. Thank you very much guys.
Our next question comes from the line of John Murphy from Bank of America. Please go ahead.
Good afternoon, and and because you mentioned that he was listening, Louisiana, you're doing well and and and Miss you on many levels.
Just a first question and I think Michaels.
Question on 'twenty, and 'twenty, one guidance and it is very.
Very important and selling it because.
And I think we're all trying to figure out what that the basis is to work off of for 2022 and beyond numbers because it still seems like there is some noise and.
And pressure on 2021.
Is that kind of a.
Fair statement to say, Hey, 'twenty 'twenty, one is still a year that's got Tobey.
Toby noise and some incremental costs.
And some other things that might not be the best way to think about building off of as a basis for the trajectory in 2022 and beyond is that a fair statement.
And that's where I got all the details of your question because the line is not very good day I understand you're asking about.
2021 may be informative for the development of the results for 2022.
And only partly I would say, it's like a 10th one is it is mostly execution, assuming that COVID-19, and allow us to do so but I think it was in alignment with our plans.
And 2022 already encompasses the expectation of introductions and new models and that is where we need to be more specific later on.
Okay and then just a second question you mentioned.
Personalization was lower in <unk>.
In 2020, and I'm just curious as you think about 'twenty 'twenty, one and a recovery and then beyond do you think that personalization will Sydney will be significantly additive to results going forward and and it was a little bit depressed in 2020 because of Covid.
Okay. Thank.
Thank you for this question and I think we've just got a number of times and previous calls too.
Is there a little due to project starts and organizations because they usually why the average does not move much throughout time. It is actually dependent on the mix of our products, We mentioned and I think already and a couple of calls and the fact that personalization rate has been influenced by specialty areas.
Nearly the price of the cars and it's important because of the fact that denominator and with.
Total net revenues and so.
Not be particularly.
Mindful about the the fluctuation of disbursing monetization rate, what actually matter zone.
In absolute terms on the margin does that attached to that so you might imagine the deep and it's a mutation rate for a long time in terms of the <unk> and the share of revenue is lower compared to that of the portofino or maybe all of a destocking event is a balance of debt the.
Contribution and maybe very different.
Okay and just.
Lastly.
On the Concorde agreement I was just wondering if you could give us any basis.
And the positive or negative side for for economics going forward and just how we should think about that and then.
And its way on the positive megaphone factors.
No.
And I prefer to comment, saying that the net impact of the introduction of the new Concorde agreement and the budget cap is kind of neutral for us that is the expectation the way we monitor it throughout time.
Okay, great. Thank you very much.
Thank you John.
Our next question comes from the line of Giulio Pescatore from mix and please go ahead.
Hi, everyone first of all I also wanted to take these opportunities and wish Lewisville divest.
Now coming to the questions.
I wanted to come back to the let's say for any one guidance and in particular, because if the cash flow one I really struggled to understand how to reconcile this 250 million guidance also because you have given US 1 billion capex.
Capex number so what's out what are the other assumptions behind behind this and this number in terms of working capital.
And then how do we think about bridging this result, with a 23 and two targets given that it would imply a growth of three times and current cash flow generation.
Thank you Julia.
As you know.
Free cash flow is.
Basically the result of our March we take out from the EBITDA due to capital expenditures.
Working capital in a rider and a sense, meaning we take into account also a day.
And the impact of the advances and debt.
And it's even the Monza and we have a drag and significant drag on and it's still in 2021 and bakery and basically we cash come from.
And we become part of the price of demand growth already in 2019, and we want to have them in 'twenty 'twenty one.
And besides the usual dynamics of the rest of working capital debt and that does not count as much usually and.
We have the tax and financial charges pain, and as far as tax and concerned and you should take into account and the fact and the new patent box scheme.
And basically provides for the cash benefit to displace and three years. So there would be a slight reduction in 2021 come back to work with and it being 2019 and in 2020.
Okay and.
Yes, yes, thank you very much and.
If we look at the 'twenty two number again does it include any impact from new deposits for a potential new limited edition car or is or should we say it is a clean number yes.
Yeah, that's a fair assumption.
Okay. Okay. Thank you very much.
And then I also wanted to come back from the decision to postpone the CMV is that only driven by the fact that there isn't a permanent CEO at the moment or if there was anything else.
Behind the other thing.
Yeah, and I communicated that date for the CMV and Julia.
I'm sorry.
And just think about that.
Okay, Okay and then.
And then.
So looking at your shipments for Q4.
And you are indicating shipments down 9% for the for the full year and frame 'twenty, you're close to your downturn.
Is there any maybe conservative and assume deliveries and the last few weeks of the year have you taken maybe.
The other day.
And it does surrounding Julia just rounding.
Okay. Okay. Thank you very much.
Our next question comes from the line of 60 barrel a day from UBS. Please go ahead.
Hi, Thanks for taking my question.
Christopher and I would like to talk and he can think about that mix and really shouldn't be expecting and can you give me since becoming stronger and stronger at the same time, we do have <unk> alone.
And also the piece that's being taken out so net net what should we expect and time.
Contributions from the Nick and thank you think long.
We expect mix to be positive and.
And this view for the fact that we keep on delivering the Monza.
That's our plan.
And we should have and.
Significant growth in terms of the deliveries from <unk>.
So that's the main driver of what we expect.
Okay, and then and when it comes to and interest.
Thank you Jill volume.
Mike to be high.
And because you you.
You had a thought I had the same day to have.
And my next year, which and I. Thank him and can you you have to model.
How should we think about the step up and do you have and.
Can you give us any indication of what.
Percentage of 2021 volume.
And the hydro as you know.
And we prefer not to go into that with the fact and Nobody's asked that revenue those are much more relevant than volume per se.
Okay.
And and I'm the CEO search.
And I can't imagine that's you cannot make detailed from time, so names that you might be considering and.
And Matt can you, perhaps discuss a little bit and what are the key criteria and then and quality and say you are looking for and the next deal.
Oh, I'm, sorry, and the question is about what I get and catching.
Yes.
Seal and you think that's the.
And the key criteria and okay.
And Youre looking at.
Yes, I'm sure other body is considering all of the criteria that are necessary to run a company like ours right yeah.
Okay, and and maybe just wanted to try and as a clarification can you just remind us and what plans have been affected and what initiatives have been postponed and.
As a result of Covid.
And no none.
Once again I think we've mentioned a couple of times this year.
They didn't need basics and the main drivers of our growth plan remains unchanged and just a question of timing for most of that.
But.
We are not specific in advance and the models will relaunch, we cannot be on even more and let's say on the initiatives that will come in a couple of years or longer.
Okay. Thank you.
Thanks.
Yes.
Our next question comes from the line of Monika both here from Intesa Sanpaolo. Please go ahead and good.
And on everyone and thanks for taking my questions. The first one is on China.
Oh, and you give us a flavor of all know what the other day tick and.
And time of sheep mindset and from.
Our mainline chat and mainland China, Hong Kong, and Taiwan named 2021, and we should see some.
Major I'll throw up sheep and SAP.
And the coming from between them.
And secondly, and he's on the timing for <unk>.
The new model can you give out that and timing.
Timing for the announcement of their premium or the other site in capacity and in 'twenty one.
And the very last is that and they and quarterly trend I know it.
It's difficult, but the outlook is still uncertain and that's so do you see some are different and Isa and.
And what that might quote that and you can get to you about the flavor and Bob the first for Canada and back down for a lot and thank you very much.
Thank you Monica and I just started from the launches that's a nice try but as you know we do not go into that sort of detail.
And with respect to the quarterly development of the year, we have some seasonality something is changing in 'twenty and 'twenty due to the impacts of the 10 day anytime and telecom.
And paddy's answer and not be and easy one.
And it's not just the development of volumes, but it's also the mixed changes and also in terms of revenue recognition for fly and activity. So it's a bit day, because without entering into the detail of modeling as a preferred enough to do the last one is on China. What we are currently witnessing and nice comeback of orders from there.
Sure.
And you should not ever look at dollar deliveries in 2019 and 2020, because you know these were affected by our decision from <unk> introduction.
Oh and your emission regulation that was unexpected and 2019 as a result 2020 has suffered during the comparison 'twenty 'twenty, one and what they currently see as a significant growth for Florida, particularly and nicely and that and maybe any interest being one from the moment that.
And sorry on the raw mat and with a significant share of orders for from women day, So that mean something in terms of different sizes and economy.
And you have even if with.
And with a third and Mackenzie.
Okay. Thank you for them at some time thank you.
Thank you Monica.
Thank you. Our next question comes from the line of George <unk> from Goldman Sachs. Please go ahead.
Good afternoon, and thank you for taking my questions. The first question I had.
And I apologize if you did allude to this and the comments, but just for this year what are your assumptions around raw materials and FX and have you already taken actions.
<unk> tried true the appreciation and the euro against the US dollar, which we saw last year.
Yeah.
Thank you George.
In terms of our policy on FX as you know we are we have a policy that provides for and and edging on a rolling basis with some target percentage is so a significant chunk of 'twenty to 'twenty. One is already has already been added to our 2020.
Still and we do not have to go 100% then there is a room for Fuller and.
Changes and impacts from changes in FX.
And I've already thoughts and wishes minimized, but may go ones, one from side or another.
And as far as raw material.
For those who really matters, we are assuming a policy.
Understood. Thank you and then the second question I had was just with respect to the order book you, obviously extremely clear, but the order book is very strong and extends well into next year.
Can I just ask you is there much variation by model line or more importantly by markets and tons of what you see with respect to the order book or is it pretty robust across the board at this point and time.
I would describe it as a pretty robust across the board across geographies across the board, meaning across products and geography, Nike and us.
Great and then the final question just to clarify and I think.
Michael and John have already touched on this but I just wanted to clarify.
At this point and time, you still aiming to deliver the 2022 target.
<unk>.
Statement.
And that will come with the debt.
That will come would be and.
Got it on like a day at that point, we may describe the strategy, we're pursuing and if and by our match any regard suspected and targets and they are expecting for 'twenty thinking has to be changed.
Thank you sorry go and do you think you do.
Thank you.
Thank you Georgia.
Thank you. Our next question comes from the line of Thomas Besson from Kepler Chevron. Please go ahead.
Thank you very much.
A couple of questions so let's pause for students.
You you had the because of.
Can you maybe speak a bit louder and closer to the microphone and we have come in here and you think you sure sorry for that particular day, that's better known.
Way back there. Thank you very much okay, great sorry for that so a couple of questions left please.
First on the EBIT bridge in 'twenty, and 'twenty because of Covid that you had to and <unk>.
Most of those loans.
But it will be negative.
Should we expect part of that to reverse positively.
In 2021 or is it just some things up for them.
Not sure I got which is the bulk of the other brands that you that you were talking about the one called other.
Oh, sorry.
Other includes the impact of F. One.
And which in principle.
And may come back to the extent the claim that you have one calendar year.
Not affected the same way it was and in 'twenty and 'twenty.
Debt. Obviously include the revenue from the commercial rights holder and revenue from the sponsorship.
And that also includes the impact.
Impact on EBIT from the and delays on our delays and and closure of our brand related activities and once again, there we are very much dependent on the evolution of the pandemic.
And finally, we are also a box and dependent on Maserati and me and in terms of volumes and margin attached to that.
Okay. Thank you.
Could you give me a connection.
Connection to the next question can you just clarify the puts.
Potential and financial consequences of stripping the delivery of Missouri Tien Tsin.
We are not really aware of just two of the contract you had with them.
Right so from a total.
The agreement with Maserati is expected to and in 2023.
You know debt businesses diluting for us in terms of margin and Furthermore, I think we outlined for the time of the capital market day that we expect to have some capacity to be freed up from the from these top up their activities that may be.
Used for the development of our model and our and powertrain going forward.
Okay. Thank you and have a last question, but maybe.
Beyond the scope of a.
Trades could you give us and you seem to go.
And 'twenty 'twenty, two GAAP explorer and the timeline for the pools, when we launch whether it's still within the <unk>.
The framework of the initial plan or whether it's low pushed into 'twenty three.
Perfect and not to go into that and once again, we said there are some developments and growing is better to talk when everything is clear.
Understood. Thank you very much.
And.
Thank you. Our next question comes from the line of Massimo Vecchio from Banca.
Yes, good afternoon to everybody.
I have a follow up question on the Capex the indication.
800, and yours is it's really the numbers, probably the highest and these three.
Wondering if you can give us some details on that.
And.
Number one and two projects that you are investing.
Lifting and or at least by by categories and fits.
R&D for new propulsion for its and <unk>.
Any color would be up for.
Sure and Massimo.
And by the way. This was the same target, we Gail is better and.
Spectation debt, we gave beginning of last year.
When we started in 'twenty and 'twenty and before being flown by about the impact of Covid.
And there is some catch up and that number from the slower pace of our investment and the last part of 'twenty and 'twenty.
Mostly it is mostly product for product.
Development.
Which I'll walk is a task for that in terms of the consideration that we are not and more on the on time and Canyon.
Also and as you will know hybrid and we are working on other.
And infrastructure as a small part of that but we cannot visit or guide the development and in our factory here.
As we did by the way buying purchasing contracts on land contiguous to for the.
Two two hour at quarter and year.
So other fabs as monthly product and this and by the way fully in line with what we said that the company from like a day back in 2018, so rigs out here and even accretion moved debt.
Okay. Okay. Thank you very much.
Our next question comes from the line of Adam Jonas from Morgan Stanley. Please go ahead.
And thanks, everybody.
And I have a question for for John L Com, but I just wanted to say at the outset that range.
All the talk around 'twenty and 'twenty two guidance I totally understand it but just think about how much. The world has changed in terms of C. O two and climate change and EV economic sense for 2018, Sam day, it's but almost renders toward the 2022 guide.
Relevant and my opinion, but just my opinion, but John.
Question for you.
Ferrari vehicles, I know management and the past.
On tailpipe emissions.
And have the comment that because Ferrari vehicles are such a miniscule part of the park that it's really tiny and.
And that you could kind of talk to regulators and somehow convince them, we're not a big deal and you could kind of purchase credits and very easily at current carbon prices.
Even more than that kind of make it neutralize it.
But what's happening of course, as you know John and the team and now.
And now cities are getting involved in London and Los Angeles.
Hong Kong Biggs Big Ferrari cities or are kind of saying no. We're not going to allow the operation of IC E vehicles in the coming years and so I. It just means you run the risk of having the regulatory environment move outside of your control, so with that and mind I'd love to hear.
And maybe a direct question John.
Can you see a day within the next <unk>.
Okay, and where the majority of Ferrari products are 100% electric not just hybrid because that's still considered tailpipe climate change and cars and the eyes of these mayors and the cities that we're talking to and you're talking to Kent could you see and I'm not asking you to say, it's going to happen, but is that is that a rep is that too.
Too radical for Ferrari, while protecting the sanctity of the brand thanks, Sean.
Hi, Adam good to hear your voice.
I think that the best way to answer is really and open invitation for next year in Maranello.
You and all your colleagues who are going to join us on the exciting.
And I need that we have over this decade.
And <unk> will still be a year.
We will have.
I bled Cogs so within this decade.
We will be seeing a ferrari fully electric what we will see within this decade is and electric Ferrari and I.
Hope you will buy one of them.
Hi, Ravi John let's talk about it.
Thank you. Our next question comes from the line of Stephen Reitman from Societe Generale. Please go ahead.
Yes, good evening and thank you question.
One you mentioned and very impressively that your cancellation level in 2020 was lower than in 2019.
Could you comment a little bit about somewhere where the cancellations.
By geography, and by product credit cannot to hear about that and.
And secondly, you alluded on the new customers that you had some very strong interest from women and children for the Roma for you talk more generally about the level of interest globally for the on the robot and also the level of interest for this sort of 90 stirred all day or the other extreme and <unk>.
And the amount of the proportion of people who are specifying necessity there Aldo.
Additional uptake thank you.
Thank you for them.
In terms from the cancellation and since we went public.
And the second quarter and so the fact that we had some cancellations and in North America and you know for that yeah. They were pretty much concentrated there from that on and we haven't seen anything specific so the ones that we at where usually evenly distributed through other various geographies and nothing special to report.
With respect to the color on the order intake from for the various small, though and I think it is confirmed that the Roma attack.
And more than any other Ferrari before new varieties customers, which is interesting and nice.
Hum.
And so also debt DSS and 90 anthrax.
Young very custom.
Customers.
And more probably than we would have expected and the order book for debt is very very long senior debt.
And the order has been for already some months ago.
And that and probably the two most interesting element that you should take into account.
And then on the and in some sort of a modal cancellations were they concentrated at the lower and all the higher and ultimately what the lineup.
I don't think there is any specific concentration.
On either the low or the high end of our range.
And well thank you very much for the board.
Thank you for them.
Thank you.
Yes.
Thank you there are no further questions from the line.
Please go ahead.
Yeah.
Thank you all bye bye.
That concludes the call for today. Thank you for participating you may or disconnect.
Okay.
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And then.
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